Smt Maha Lakshmi Kasireddy, Visakhapatnam V. THE ITO, WARD - 3(2), Visakhapatnam

ITA 66/VIZ/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2024 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 28-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D KOMALI KRISHNA
• Assessee Lawyers: R L N SOMAYAJULU
• Section: 54F; 54

Judgement Text

ITA NO.66/VIZAG/2014 SMT. MAHALAKSHMI KASIREDDY, 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.66/VIZAG/2014 ( / ASSESSMENT YEAR: 2009-10) SMT. MAHALAKSHMI KASI REDDY VISAKHAPATNAM VS. ITO WARD - 3(2) VISAKHAPATNAM [PAN: AHXPK 4196F ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI R.L.N. SOMAYAJULU, AR / RESPONDENT BY : SMT. D. KOMALI KRISHNA, DR / DATE OF HEARING : 0 2. 0 2.2016 / DATE OF PRONOUNCEMENT : 18.03.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A), VISAKHAPATNAM DATED 11.11.2013 FOR THE ASSE SSMENT YEAR 2009-10. ITA NO.66/VIZAG/2014 SMT. MAHALAKSHMI KASIREDDY, VISAKHAPATNAM 2 2. THE FACTS ARE IN BRIEF THAT THE ASSESSEE, IS AN INDIVIDUAL, CARRYING THE BUSINESS AS HPCL GAS DEALER IN THE NAME AND STY LE OF M/S. SREE SATYA MAHALAKSHMI GAS AGENCY. THE ASSESSEE HAS FI LED A RETURN OF INCOME DECLARING TOTAL INCOME OF ` 6,97,092/- ON 10.9.2009. IN THE ASSESSMENT ORDER, THE A.O. HAS NOTED THAT DURING TH E RELEVANT PREVIOUS YEAR, THE ASSESSEE ALONG WITH HER BROTHER AND SISTE R SOLD A RESIDENTIAL HOUSE SITUATED AT FLAT NO.265B, ROAD NO.10, JUBILEE HILLS, HYDERABAD FOR A CONSIDERATION OF ` 4,66,08,000/- AND THE SHARE ADMITTED BY THE ASSESSEE WAS ` 57 LAKHS AND CLAIMED CAPITAL GAINS IN RESPECT OF T HE SHARE RECEIVED BY HER U/S 54 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') OF ` 53,39,160/-. THE ASSESSING OFFICER FURTHER NOTED THAT ON ENQUIRY, IT WAS FOUND THAT THE ASSESSEE HAD CONSTRUCTED ONLY TWO GODOWNS AND DID NOT CONSTRUCT ANY RESIDENTIAL B UILDING AND THE CLAIM FOR DEDUCTION U/S 54 OF THE ACT WAS DISALLOWE D BY THE A.O. THEREAFTER, PENALTY PROCEEDINGS U/S 271(1)(C) OF TH E ACT WAS INITIATED. IN RESPONSE TO THE PENALTY NOTICE ISSUED BY THE A.O ., IT WAS SUBMITTED BEFORE THE A.O. THAT MERE MAKING A CLAIM IS NEITHER AMOUNTING TO FILING INACCURATE PARTICULARS NOR CONCEALMENT OF INCOME. THEREFORE, REQUESTED PENALTY PROCEEDINGS INITIATED U/S 271(1)(C) OF THE ACT MAY BE DROPPED. THE A.O. AFTER CONSIDERING THE EXPLANATIONS OF THE ASSESSEE, HE HAS OBSERVED THAT THE ASSESSEE OBTAINED MUNICIPAL APPRO VAL FOR CONSTRUCTION ITA NO.66/VIZAG/2014 SMT. MAHALAKSHMI KASIREDDY, VISAKHAPATNAM 3 OF GODOWNS ONLY AND KNOWING VERY WELL SHE IS ONLY C ONSTRUCTING THE GODOWNS, CLAIMED EXEMPTION U/S 54F OF THE ACT IS A CLEAR CASE OF CONCEALMENT AND PENALTY WAS LEVIED U/S 271(1)(C) OF THE ACT. ON APPEAL, THE LD. CIT(A) HAS OBSERVED THAT THE ASSESS EE HAS NOT DISCLOSED THE MATERIAL FACTS RELATING TO THE NATURE OF THE IN VESTMENT MADE IN RESPECT OF WHICH DEDUCTION U/S 54 OF THE ACT WAS CL AIMED AND WRONGFUL CLAIM HAS BEEN DELIBERATELY MADE, AMOUNTING TO CONC EALING THE PARTICULARS OF INCOME AND CONFIRMED THE ORDER OF TH E A.O. 3. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE TRIBUNAL. 4. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE ASSESSEE HAS ACTUALLY PLANNED TO CONSTRUCT THE GODOWNS AND R ESIDENTIAL HOUSE ON THE LAND PURCHASED. AS PER THE DIRECTIONS OF THE H PCL, ASSESSEE HAS TO CONSTRUCT TWO GODOWNS, THEREFORE, THE ASSESSEE HAS CHANGED HER PLANS, CONSTRUCTED TWO GODOWNS AND THEREFORE, THE ASSESSE E NEITHER CONCEALED THE INCOME NOR FILED INACCURATE PARTICULA RS AND NO PENALTY CAN BE LEVIED U/S 271(1)(C) OF THE ACT. 5. HE FURTHER SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS, WHEN THE A.O. HAS ASKED THE DETAILS, IT WAS SUBMITT ED ALL THE DETAILS AND PAID THE TAXES ACCORDINGLY. THE ASSESSING OFFICER, AFTER DISALLOWING THE ITA NO.66/VIZAG/2014 SMT. MAHALAKSHMI KASIREDDY, VISAKHAPATNAM 4 CLAIM U/S 54 OF THE ACT, HE IS NOT JUSTIFIED IN INV OKING THE PENALTY U/S 271(1)(C) OF THE ACT. 6. ON THE OTHER HAND, THE LD. D.R. HAS SUBMITTED TH AT THE ASSESSEE BY CONCEALING THE MATERIAL FACTS CLAIMED THE DEDUCT ION U/S 54F OF THE ACT. THEREFORE, IT IS A FIT CASE TO IMPOSE PENALTY U/S 271(1)(C) OF THE ACT AND STRONGLY SUPPORTED THE ORDER PASSED BY THE AUTH ORITIES BELOW. 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ASSESSEE SOLD FLAT ALONG WITH HIS BROTHER AND SISTE R AND RECEIVED A LONG TERM CAPITAL GAIN OF ` 53,39,160/-. SHE HAS FILED A RETURN OF INCOME, WHEREIN SHE HAS CLAIMED DEDUCTION U/S 54 OF THE ACT . WHEN THE A.O. MADE AN ENQUIRY WITH REGARD TO THE CLAIM OF THE ASS ESSEE, IT WAS SUBMITTED BEFORE THE A.O. THAT NO RESIDENTIAL HOUSE WAS CONSTRUCTED, ONLY TWO GODOWNS WERE CONSTRUCTED FOR THE PURPOSE O F KEEPING THE GAS CYLINDERS AND ACCORDINGLY, A.O. HAS DISALLOWED THE CLAIM OF THE ASSESSEE AND THE ASSESSEE PAID THE TAXES. THEREAFTER, THE A .O. HAS INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT ON THE GROUND THAT ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME. THE CASE OF THE ASSESSEE IS THAT THE ASSESSEE ACTUALLY PLANNED TO C ONSTRUCT A GODOWN AND A RESIDENTIAL HOUSE. HOWEVER, THE HPCL HAS INS ISTED TO CONSTRUCT ITA NO.66/VIZAG/2014 SMT. MAHALAKSHMI KASIREDDY, VISAKHAPATNAM 5 TWO GODOWNS. THEREFORE, DUE TO PAUCITY OF FUNDS, S HE COULD NOT CONSTRUCT THE RESIDENTIAL BUILDING. THEREFORE, SHE HAS CONSTRUCTED TWO GODOWNS AND THE A.O. HAS ALREADY DISALLOWED THE CLA IM U/S 54 OF THE ACT AND TAX IS ALREADY PAID. NO PENALTY CAN BE LEVIED UNDER THESE CIRCUMSTANCES. WE FIND THAT THE EXPLANATION GIVEN B Y THE ASSESSEE IS BONAFIDE EXPLANATION AND IN OUR OPINION, THE ASSESS EE NEITHER CONCEALED THE INCOME NOR FILED INACCURATE PARTICULARS. DUE T O CHANGE OF CIRCUMSTANCES, SHE WAS NOT ABLE TO CONSTRUCT THE RE SIDENTIAL HOUSE. THEREFORE, IT IS NOT A FIT CASE TO IMPOSE PENALTY U /S 271(1)(C) OF THE ACT. THUS, THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT I S CANCELLED AND ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE IS AL LOWED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 18 TH MAR16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 18.03.2016 VG/SPS ITA NO.66/VIZAG/2014 SMT. MAHALAKSHMI KASIREDDY, VISAKHAPATNAM 6 '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SMT. MAHALAKSHMI KASI REDDY, D.N O.50-24-12, TPT COLONY, SEETHAMMADHARA, VISAKHAPATNAM 2. / THE RESPONDENT THE ITO WARD-3(2), VISAKHAPATNA M 3. ) / THE CIT-1, VISAKHAPATNAM 4. ) ( ) / THE CIT(A),VISAKHAPATNAM 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM