A.Rajya Lakshmi, Visakhapatnam V. THE ITO , WARD - 3(2), Visakhapatnam

ITA 652/VIZ/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0249 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 04-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 148; 132

Judgement Text

ITA NO.652/VIZAG/2013 A. RAJYA LAKSHMI, VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , ,, , . . . . , , , , % % % % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER . .. ./ // / I.T.A.NO.652/VIZAG/2013 ( / ASSESSMENT YEAR : 2007-08 ) A. RAJYA LAKSHMI VISAKHAPATNAM VS. ITO WARD-3(2) VISAKHAPATNAM [ PAN: AADPL 9520H ] (, , , , / APPELLANT) (-., -., -., -., / RESPONDENT ) , / / APPELLANT BY : SHRI G.V.N. HARI, AR -., / / RESPONDENT BY : SHRI M.N. MURTHY NAIK, DR / 3 / DATE OF HEARING : 29.9.2015 / 3 / DATE OF PRONOUNCEMENT : 30.9.2015 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF CIT(A), VISAKHAPATNAM DATED 17.10.2013 FOR THE ASSESSMENT Y EAR 2007-08. 2. THE ASSESSEE IS AN INDIVIDUAL FILED RETURN OF IN COME FOR THE YEAR UNDER CONSIDERATION BY ADMITTING TOTAL INCOME OF RS .31,110/- WHICH ITA NO.652/VIZAG/2013 A. RAJYA LAKSHMI, VISAKHAPATNAM 2 INCLUDES INCOME FROM LONG TERM CAPITAL GAIN OF SALE OF 31000 SHARES OUT OF 35000 SHARES HELD BY THE ASSESSEE IN VARUN MOTOR S PVT. LTD. THAT WERE SOLD TO SRI V. PRABHA KISHORE AT TOTAL CONSIDE RATION OF RS.7,75,000/- ON 9.6.2006. SUBSEQUENTLY, THERE WAS A SEARCH AND SEIZURE OPERATION CONDUCTED U/S 132 OF THE ACT IN THE PREMISES OF ASS ESSEES HUSBAND AND DURING THE SEARCH THEY FOUND A LETTER WRITTEN BY SH RI V. PRABHA KISHORE PROMISING TO PAY A SUM OF RS.2 CRORES. THE ABOVE P ROMISED AMOUNT OF RS.2 CRORES WHICH WAS ALREADY TAXED ON A SUBSTANTIA L BASIS IN THE HANDS OF SHRI A. JANAKI RAMAN, HUSBAND OF THE ASSESSEE SU BSEQUENTLY ISSUED A NOTICE U/S 148 OF THE ACT TO THE ASSESSEE TO TAX RS .1 CRORE BEING 50% OF THE ABOVE SAID AMOUNT IN THE ASSESSEES HANDS. IT WAS EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE HAS NOT REC EIVED ANY AMOUNT FROM MR. V. PRABHA KISHORE, THEREFORE, NO ADDITION CAN BE MADE. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE C ONTENTION OF THE ASSESSEE AND ADDITION OF RS.1 CRORE WAS MADE IN THE HANDS OF THE ASSESSEE. ON APPEAL CIT(A) REDUCED ADDITION FROM R S.1 CRORE TO RS.82,77,000/-. SUBSEQUENTLY, BY ISSUING A NOTICE, PENALTY WAS LEVIED OF RS.18,34,046/- U/S 271C OF THE INCOME-TAX ACT (HERE INAFTER CALLED ACT). ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A). THE LD. CIT(A) CONFIRMED THE ORDER PASSED BY THE A.O. ITA NO.652/VIZAG/2013 A. RAJYA LAKSHMI, VISAKHAPATNAM 3 3. THE ASSESSEE CARRIED THE MATTER BEFORE THE TRIBU NAL. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS SU BMITTED BEFORE US THAT THE VERY BASIS ON WHICH PENALTY WAS LEVIED BY THE ASSESSING OFFICER, THE ADDITION ITSELF WAS DELETED BY THE TRIBUNAL BY ORDER DATED 28.7.2015 IN ITA NOS.51&52/VIZAG/2012 AND SUBMITTED THAT THE PENALTY ORDER CANNOT SURVIVE. 4. ON THE OTHER HAND, THE LD. D.R. RELIED ON THE OR DER OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORDS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN TH IS CASE THE PENALTY WAS LEVIED BY THE ASSESSING OFFICER BASED ON THE SE IZED MATERIAL DURING THE COURSE OF THE SEARCH IN THE HANDS OF THE ASSESS EES HUSBAND. THE TRIBUNAL IN THE ASSESSEES AND ASSESSEES HUSBAND C ASE IN ITA 51 & 52/VIZAG/2012 DATED 28.7.2015 HAS CONSIDERED THE VE RY SAME ADDITION IN THE PARAGRAPH 28 AT PAGE 15 OF THE ORDER AND GAV E A CATEGORICAL FINDING THAT THE INFERENCE DRAWN BY THE TAX AUTHORI TIES THAT THE LETTER WAS ACTED UPON BY THE PARTIES AND THE AMOUNT OF RS. 2 CRORES REPRESENT THE VALUE OF 7.5% OF THE SHAREHOLDING IS NOT SUPPOR TED BY ANY MATERIAL, SINCE THE SURROUNDING CIRCUMSTANCES SHOW THAT THE M OU GIVEN EFFECT THE AMOUNT OF RS.2 CRORES DOES NOT REPRESENT THE SALE V ALUE OF SHARES ALONE. ITA NO.652/VIZAG/2013 A. RAJYA LAKSHMI, VISAKHAPATNAM 4 6. WE FIND THAT THE VERY BASIS OF WHICH THE PENALTY WAS LEVIED IS DELETED BY THE TRIBUNAL AND THEREFORE THE PENALTY O RDER CANNOT SURVIVE. THUS, THE PENALTY LEVIED BY THE ASSESSING OFFICER I S CANCELLED. APPEAL FILED BY THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 30 TH SEPT15. SD/- SD/- ( (( ( . . . . ) ( ) ( ) ( ) ( . .. . ) )) ) ( (( ( G. MANJUNATHA) ( (( ( V. DURGA RAO ) )) ) / // / ACCOUNTANT MEMBER / // / JUDICIAL MEMBER /VISAKHAPATNAM: 6 / DATED : 30.9.2015 VG/SPS / - 7 / COPY OF THE ORDER FORWARDED TO :8 1. , / THE APPELLANT A. RAJYA LAKSHMI, D.NO.8-1-1/1, BALAJI NAGAR, VISAKHAPATNAM 2. -., / THE RESPONDENT ITO WARD-3(2), VISAKHAPATNAM 3. ; / THE CIT, VISAKHAPATNAM 4. ; () / THE CIT(A), VISAKHAPATNAM 5. -, , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE / BY ORDER // TRUE COPY // AB ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM