K Srinivasa Reddy, Visakhapatnam V. The Assistant Commissioner of Income Tax, Circle-1(1), Visakhapatnam

ITA 464/VIZ/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7711 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2003-2004
• Appeal Filed On: 11-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SONOWAL
• Keywords: Gift; Reassessment proceedings; Set aside
• Section: 143(3); 153A; 201; 131; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER& SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ I.T. A.NO. 464 /VIZ/201 8 ( / A SSESSMENT Y EAR : 20 0 3 - 0 4 ) K.SRINIVASA REDDY 1 0 - 27 - 5, WALTAIR UPLANDS VISAKHAPATNAM [ PAN : A DBPK2903Q ] VS. ASST.COMMISSIONER OF INCOME TAX CIRCLE - 1(1) VISAKHAPATNAM ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI C.SUBRAHMANYAM, AR / RESPONDENT BY : S HRI D.K.SONOWAL, CIT, DR / DATE OF HEARING : 2 9 . 10 . 201 9 / DATE OF PRONOUNCEMENT : 31 . 10 . 201 9 / O R D E R P ER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : TH IS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A ) ] - 1, VISAKHAPATNAM IN I.T.A. NO. 215/2010 - 11/ACIT,CIRCLE - 1(1)/2016 - 17 DATED 09 .0 8 .201 8 FOR THE ASSESSMENT YEAR (A.Y.) 20 03 - 04. 2 I.T.A. NO . 464 /VIZ/201 8 , A.Y.20 0 3 - 0 4 K.SRINIVASA REDDY, VISAKHAPATNAM 2. ALL THE GROUNDS OF APPEAL ARE RELATED TO THE ADDITION OF THE GIFT RECEIVED BY THE ASSESSEE. A SEARCH U/S 132 WAS CONDUCTED IN THE GROUP CASES OF V.DHANA REDDY & CO. AND THE EVIDENCE WAS FOUND FROM THE RESIDENCE OF SHRI K.SRINIVASA REDDY WITH REGARD TO GIFT OF 660 SQ.YDS OF HOUSE SITE AT WALTAIR UPLANDS GIVEN BY SMT. G.VIJAYA VIDE GIFT DEED DATED 06.05.2002. DURING THE COURSE OF SEARCH, A STATEMENT WAS RECORDED U/S 132 FROM SMT.G.VIJAYA, WHO HAS STATED THAT SHE HAS NOT GIVEN ANY GIFT TO THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER (AO) MADE THE ADDITION OF R S.25,00,000/ - AS INGENUINE TRANSACTION AND COMPLETED THE ASSESSMENT ORIGINALLY BY AN ORDER U/S 143(3) R.W.S. 153A DATED 27.03.2006. 3. AGAINST THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE MATTER TRAVELLED TO THE ITAT. ITAT IN ITS ORDER IN I.T.A. NO.428/VIZ/2006 DATED 02.09.2009 REMITTED THE MATTER BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION. ACCORDINGLY, THE AO HAS TAKEN UP THE CASE FOR GIVING EFFECT TO THE ORDER OF THE ITAT. IN THE REASSESSMENT CONSEQUENT TO THE O RDER OF THE ITAT, THE AO EXAMINED THE DONOR U/S 131 ON 30.07.2010, WHEREIN, SMT.G.VIJAYA, THE DONOR HAS CONFIRMED THE GIFT TRANSACTION AND ALSO SUBMITTED THE COPY OF THE GIFT DEED TO THE AO. HOWEVER, SHE COULD NOT EXPLAIN THE SOURCE OF PURCHASE OF THE LAN D, HENCE, THE AO DISBELIEVED THE 3 I.T.A. NO . 464 /VIZ/201 8 , A.Y.20 0 3 - 0 4 K.SRINIVASA REDDY, VISAKHAPATNAM GENUINENESS OF THE GIFT AND ACCORDINGLY MADE THE ADDITION OF RS.25,00,000/ - AS UNDISCLOSED INCOME AND PASSED THE ORDER U/S 143(3) R.W.S.254 OF THE ACT ON 20/12/2010. 4. AGAINST THE ORDER OF THE AO DATED 20/12/2010, THE ASS ESSEE PREFERRED APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) CONFIRMED THE ORDER OF THE AO OBSERVING THAT THE DONOR HAS NO SOURCE FOR GIVING PROPERTY WORTH RS.25,00,000/ - AS GIFT TO THE ASSESSEE. HENCE, THE ASSESSEE PREFERRED APPEAL BEFORE THIS TRIBUNAL. 5. DURING THE APPEAL HEARING, THE LD.AR SUBMITTED THAT THE ASSESSEE IS A CLOSE RELATIVE OF THE DONOR. DONOR HAS AGRICULTURAL INCOME AND HER HUSBAND IS AN EMPLOYEE, RECEIVING SALARY. SHE HAS ACQUIRED THE SAID LAND BY SALE DEED DATED 26.04.1984 FOR A SUM OF R S.72,000/ - AND THE LD.AR HAS FURNISHED THE COPY OF THE SALE DEED IN THE PAPER BOOK FROM PAGE 8 TO 12. THE SAID PROPERTY WAS UNDER THE POSSESSION AND ENJOYMENT OF THE DONOR FROM 1984 TO 2002 AND ON 06.05.2002, THE DONOR HAD GIFTED THE PROPERTY TO THE ASSE SSEE. BOTH THE SALE DEED AS WELL AS THE GIFT DEEDS WERE DULY REGISTERED. SHE HAS ALSO CONFIRMED HAVING GIVEN GIFT TO SHRI SRINIVASA REDDY IN HER STATEMENT DATED 30.07.2010. THEREFORE, ARGUED THAT THERE IS NO CASE 4 I.T.A. NO . 464 /VIZ/201 8 , A.Y.20 0 3 - 0 4 K.SRINIVASA REDDY, VISAKHAPATNAM FOR MAKING THE ADDITION, HENCE REQUESTED TO SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND ALLOW THE APPEAL OF THE ASSESSEE. 6. PER CONTRA, THE LD.DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THIS CASE, TH OUGH THE DONOR HAS GIVEN A STATEMENT DURING THE COURSE OF SEARCH ACTION STATING THAT SHE HAS NOT GIVEN ANY GIFT TO THE ASSESSEE, IN THE REASSESSMENT PROCEEDINGS WHILE GIVING EFFECT TO THE ORDER OF THIS TRIBUNAL, THE DONOR HA D CONFIRMED THE GIFT TRANSACTIO N IN THE STATEMENT RECORDED ON 30.07.2010. THE DONOR HAD ACQUIRED THE PROPERTY IN 1984 AND WAS ENJOYING THE PROPERTY FOR OVER 18 YEARS. IN 2002, SHE HAS GIVEN THE PROPERTY BY REGISTERED GIFT DEED TO THE ASSESSEE. THERE IS NO DISPUTE WITH REGARD TO OWNERS HIP OF THE LAND WHICH WAS ACQUIRED BY THE DONOR. THERE WAS NO INDICATION OR EVIDENCE TO SHOW THAT THE ASSESSEE HAS GIVEN ANY CASH CONSIDERATION TO THE DONOR. THEREFORE, THERE IS NO REASON TO DISBELIEVE THE GENUINENESS OF THE GIFT TRANSACTION I.E. THE LAN DED PROPERTY ACQUIRED BY THE DONOR IN 1984. SINCE THE DONOR HAS CONFIRMED HAVING GIVEN THE GIFT OF LAND AND SHE WAS THE TRUE OWNER AS PER THE SALE DEED, WE DO NOT SEE ANY REASON TO SUSPECT THE GENUINENESS OF THE GIFT. THE DEPARTMENT ALSO COULD NOT PLACE ANY MATERIAL TO SUSPECT THE OWNERSHIP OF THE DONOR OR DID 5 I.T.A. NO . 464 /VIZ/201 8 , A.Y.20 0 3 - 0 4 K.SRINIVASA REDDY, VISAKHAPATNAM NOT PLACE ANY MATERIAL TO HOLD THAT THE ASSESSEE PAID THE CONSIDERATION OUTSIDE THE BOOKS OF ACCOUNTS . HENCE, WE SET ASIDE THE ORDER OF THE LD.CIT(A) AND DELETE THE ADDITION MADE BY THE AO AND ALLO W THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER, 2019. SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 31 . 10 .2019 L.RAMA, SPS 6 I.T.A. NO . 464 /VIZ/201 8 , A.Y.20 0 3 - 0 4 K.SRINIVASA REDDY, VISAKHAPATNAM / COPY OF THE ORDER FORWARDED TO: - 1. / THE ASSESSEE - K.SRINIVASA REDDY , 1 0 - 27 - 5, WALTAIR UPLANDS , VISAKHAPATNAM 2 . / THE REVENUE - ASST.COMMISSIONER OF INCOME TAX , CIRCLE - 1(1), VISAKHAPATNAM 3. THE PR. COMMISSIONER OF INCOME TAX - 1 , VISAKHAPATNAM 4. THE COMMISSIONER OF INCOME TAX (APPEALS ) - 1 , VISAKHAPATNAM 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM