Smt. K. Shalini, Hyderabad V. Addl. CIT, Range-6, Hyderabad

ITA 700/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66580 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 04-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R LAXMAN
• Assessee Lawyers: A V RAGHURAM
• Keywords: Capital asset

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 700/HYD/2012 ASSESSMENT YEAR 2008-09 SM. K. SHALINI HYDERABAD PAN: AERPK6888H VS. THE ADDL. CIT RANGE-6 HYDERABAD APPELLANT RESPONDENT ASSESSEE BY: SRI A.V. RAGHURAM REVENUE BY: S RI. R. LAXMAN DATE OF HEARING: 15 .11.2012 DATE OF PRONOUNCEMENT: 28.12.2012 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-IV, HYDERABAD DATED 31.1.2012 F OR ASSESSMENT YEAR 2008-09. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : (A) THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. (B) THE LEARNED CIT(A) ERRED IN CONFIRMING THE DETERMINATION OF SALE CONSIDERATION OF SHARES AT RS. 275 PER SHARE AS AGAINST ACTUAL SALE CONSIDERATION RECEIVED BY ASSESSEE OF RS. 119.65. (C) THE LEARNED CIT(A) ERRED IN HOLDING THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE PROVISIONS OF INDIAN EVIDENCE ACT 1872 APPLIES ON THE GROUND THAT THERE IS SUPPRESSION OF EVIDENCE WHICH IS CONTRARY ITA NO. 700/HYD/2012 SMT. K. SHALINI ================== 2 TO THE RATIO OF SUPREME COURT WHICH IS TO THE EFFECT THAT THE ONUS IS ON THE DEPARTMENT TO PROVE THAT THE SALE CONSIDERATION RECEIVED IS MORE THAN WHAT IS DECLARED. (D) THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACT THAT A ROUND SUM IS DETERMINED FOR SALE OF SHARES AND WHEN DIVIDED BY THE NUMBER OF SHARES IT RESULTED IN AN ODD FIGURE AND THAT THERE IS NO BASIS FOR ARRIVING AT SUCH ODD FIGURE AND FURTHER FAILED TO APPRECIATE THE FACT THAT A PRIVATE LIMITED COMPANY SHARE CANNOT BE SOLD AS FREELY AS A LISTED COMPANY AND THE PRICE WHICH IS GIVEN BY BLACK STONE IS HIGH BECAUSE IT IS FOR GETTING CONTROLLING POWER AND NOT COMPARABLE WITH OTHER SALE AND THEREBY ERRED IN HOLDING THAT THERE IS SUPPRESSION OF EVIDENCE. (E) THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACT THAT IF THE STAND TAKEN IN THIS CASE IS TO BE CORRECT THEN THERE IS NO NECESSITY TO INTRODUCE THE PROVISIONS OF SEC. 50 C OF IT ACT TO ADOPT HIGHER VALUE OF SALE CONSIDERATION AND ALSO THAT OF SEC. 57(2)(VII)(C)(II) TO TAX THE DIFFERENCE BETWEEN MARKET VALUE AND ACTUAL CONSIDERATION AS INCOME IN RESPECT OF ASSETS OTHER THAN IMMOVABLE PROPERTIES, AND THEREBY ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE SOLD SHARES IN M/S. MTAR TECHNOLOGIES PVT. LTD., HYDERABAD TO M /S. BLACKSTONE GPV CAPITAL PARTNERS (MAURITIUS) V-E LTD . (FOR SHORT BLACKSTONE), AND ALSO TO SRI SIMHADRI REDDY. THE ASSESSING OFFICER GATHERED INFORMATION THAT THERE W AS A SALE OF SOME SHARES AT RS. 275.62 PER SHARE TO M/S. BLAC KSTONE AND AT THE SAME TIME THERE WAS A SALE OF RS. 119.65 PER SHARE TO SRI SIMHADRI REDDY. THE SALE OF SHARES TO BLACK STONE WAS ITA NO. 700/HYD/2012 SMT. K. SHALINI ================== 3 ON 29.11.2007 AND TO SRI SIMHADRI REDDY WAS IN FEBR UARY, 2008. ACCORDING TO THE ASSESSING OFFICER THERE WAS SUBSTANTIAL DIFFERENCE BETWEEN THESE TWO SALE VALUE S OF SHARES. HE WAS OF THE OPINION THAT THERE WAS UNDER STATEMENT OF SALE PRICE. ACCORDINGLY, HE BROUGHT IN THE DIFF ERENCE (275.62 119.65 = 155.97 X 30,325) WORKED OUT AT R S. 47,29,790 AS SHORT TERM CAPITAL GAIN. AGAINST THIS THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) WHO CONFI RMED THE ORDER OF THE ASSESSING OFFICER ON THIS ISSUE. AGAI NST THIS, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4. THE LEARNED AR SUBMITTED THAT THE ASSESSEE HAD SOLD HER SHARES IN MTAR TO BLACKSTONE @ 275.62 ON 29.11. 2007. THE OTHER SHAREHOLDERS ALSO SOLD THE SHARES AT THE SAME PRICE. BESIDES, THE COMPANY MTAR ALSO ALLOTTED FRE SH SHARES TO THE BLACKSTONE AT THE SAME PRICE. HE CONTENDED THAT THIS WAS A PACKAGE DEAL OF BLACKSTONE WITH THE INDIVIDUA L SHAREHOLDERS AND THE COMPANY, WHERE BLACKSTONE HAD INVESTED AS A FDI. THE AR SUBMITTED THAT THE PRICE FOR THE SHARES HAD BEEN ARRIVED AT AFTER PROPER EVALUATION OF THE COMPANY WITH REGARD TO INTELLECTUAL STRENGTH BEHIND THE COMPANY, THE ACTIVITIES, ITS PROGRESS IN NATURE, CA PACITY TO EXPAND THE BUSINESS, PROFIT MARGIN, ETC. THE AR SU BMITTED THAT THERE ARE DIFFERENT FACTORS TO CONSIDER THE PR ICE OF A SHARE IN A COMPANY TO ATTRACT FOREIGN INVESTORS. ITA NO. 700/HYD/2012 SMT. K. SHALINI ================== 4 5. THE AR FURTHER SUBMITTED THAT AFTER THE ABOVE DEAL, THE ASSESSEE SOLD FURTHER 30,925 SHARES OF MTAR TO ANOT HER DIRECTOR OF THE COMPANY SRI SIMHADRI REDDY @ 119.65 PER SHARE IN FEBRUARY, 2008. THE ASSESSEE HAD OFFERED THE FOLLOWING EXPLANATION FOR THE DIFFERENCE IN TWO PRI CES: (A) THE PRICE CHARGED TO BLACKSTONE IS PART OF A LARGE PURCHASE DEAL ALONG WITH OTHER SHAREHOLDERS AND THE COMPANY, WHICH IS NOT IN THE HANDS OF THE INDIVIDUAL SHAREHOLDERS. (B) THE SHARES SOLD WERE THAT OF THE PRIVATE LIMITED COMPANY ON WHICH THERE WERE RESTRICTIONS ON THE TRANSFER OF SHARES. NATURALLY THE LIQUIDITY PROBLEM ARISES, HENCE THE DEMAND FOR THE SHARES IN A PVT. LIMITED COMPANY IS LESSER. (C) THE ASSESSEE IS IN NEED OF MONEY; WANTED TO SELL THE SHARES TO ANOTHER DIRECTOR ONLY AND THE COMPANY HAD ALSO AGREED TO TRANSFER TO ANOTHER DIRECTOR, IF THE SALE IS TO AN OUTSIDER, THE COMPAN Y WOULD NOT HAVE ACCEPTED THE TRANSFER. 6. THE AR SUBMITTED THAT BOTH THE ASSESSEE AND THE BUY ER, IN THE ABOVE CIRCUMSTANCES, HAD ARRIVED AT THE PRIC E OF RS. 119.65 (NET PER SHARE). THE AR SUBMITTED THAT THE CEO OF BLACKSTONE AND SRI SIMHADRI REDDY COULD NOT BE PROD UCED BY HER BEFORE THE ASSESSING OFFICER DUE TO SHORT TIME AVAILABLE FOR DURING THE SAME. THE AR STATED THAT THE ASSESS EE IS AN AGED PERSON, SUFFERING FROM OLD AGE PROBLEMS, AND T HEREFORE, ITA NO. 700/HYD/2012 SMT. K. SHALINI ================== 5 SHE COULD NOT PERSONALLY ATTEND THE HEARING. BESID ES, SINCE BLACKSTONE IS A COMPANY BASED IN MAURITIUS THE CEO OF THE SAID COMPANY, WHICH IS PLACED ABROAD, COULD NOT BE PRODUCED. WITH REGARD TO SRI SIMHADRI REDDY, THE A R SUBMITTED THAT HE HIMSELF IS A BUSINESSMAN AND A DI RECTOR IN A DIFFERENT COMPANY, AND THEREFORE, BEING BUSY IN O THER MATTERS, HE COULD NOT BE PRODUCED BY THE ASSESSEE, THOUGH A CONFIRMATION/STATEMENT WAS OBTAINED FROM HIM. IT W AS CONTENDED THAT THE TRANSACTION WAS A GENUINE ONE AN D THE CONSIDERATION WAS RECEIVED BY WAY OF CHEQUE AND DEP OSITED IN THE BANK ACCOUNT. THE TRANSACTION STATEMENT FRO M NSDL FOR PROVING THE TRANSFER OF SHARES WAS ALSO SUBMITT ED. 7. ACCORDING TO THE AR THE DIFFERENCE WORKED OUT BY TH E ASSESSING OFFICER IS ONLY ON MERE PRESUMPTION BASIS . EARLIER SHARES WERE SOLD TO BLACKSTONE FOR THE PURPOSE OF A CQUIRING CONTROLLING RIGHT OVER THE COMPANY. THE SECOND SAL E TO SRI SIMHADRI REDDY, AN INDIVIDUAL AND HAVING NO INTENTI ON TO ACQUIRE CONTROLLING INTEREST AND DUE TO COMPELLING CIRCUMSTANCES THE ASSESSEE HAS SOLD THE SHARES. AC CORDING TO THE AR IT IS AN ARMS' LENGTH TRANSACTION AND IT BEI NG AS PRIVATE LIMITED COMPANY THERE IS RESTRICTION OF TRA NSFER AND THERE IS NO EASY MARKETABILITY. 8. THE LEARNED DR SUBMITTED THAT ADMITTEDLY, THE SHARE S OF MTAR HAD BEEN SOLD BY THE ASSESSEE AND OTHER ITA NO. 700/HYD/2012 SMT. K. SHALINI ================== 6 SHAREHOLDERS OF THAT COMPANY TO BLACKSTONE @ RS. 27 5.62 PER SHARE AFTER A PROPER EVALUATION OF THE COMPANY WITH REGARD TO THE INTELLECTUAL STRENGTH BEHIND IT, ITS ACTIVITIES , PROSPECTS OF PROGRESS IN FUTURE, CAPACITY TO EXPAND THE BUSINESS , PROFIT MARGIN ETC. UNDER THE CIRCUMSTANCES, IT CANNOT BE D ISPUTED THAT THE INTRINSIC AND ACTUAL VALUATION OF THE SHAR ES OF MTAR WAS RS. 275.62 PER SHARE. IN FACT, THE DETERMINATI ON OF PRICE TO THE EXTENT OF 'PAISE' SHOWS THAT SUCH DETERMINAT ION WAS MADE AFTER ACCURATELY ANALYSING TAKING INTO CONSIDE RATION ALL THE ASPECTS OF THE VALUE IN A METHODICAL AND METICU LOUS MANNER. AS AGAINST THE VALUE SO ARRIVED, THE ASSES SEE, ONLY AFTER A GAP OF 2 MONTHS, SOLD SHARES OF THE SAID CO MPANY ITSELF TO SRI SIMHADRI REDDY @ RS. 119.65 PER SHARE. SINCE THERE WAS A SUBSTANTIAL DIFFERENCE BETWEEN THE TWO VALUES , THE ASSESSING OFFICER HAD REQUIRED THE ASSESSEE TO SUBS TANTIATE THE SAME. IN ORDER TO DO SO, HE REQUIRED THE ASSESS EE TO APPEAR HERSELF, BESIDES REQUIRING THE PRODUCTION OF THE BUYER, SRI SIMHADRI REDDY AND THE CEO OF BLACKSTONE. THOUG H IT IS CONTENDED THAT SHE COULD NOT APPEAR ON ACCOUNT OF H ER ILLNESS AND OLD AGE, IT WAS AVERRED THAT THE BUYERS COULD N OT PRODUCE AS SRI SIMHADRI REDDY, BEING A DIRECTOR IN ANOTHER COMPANY AND A BUSINESS MAN HIMSELF, WAS BUSY IN HIS OWN AFF AIRS, WHILE BLACKSTONE IS BASED IN MAURITIUS. HOWEVER, IT IS CLEAR THAT EVEN DURING THE COURSE OF APPELLATE PROCEEDING S, THE ASSESSEE HAS NOT BEEN ABLE TO MEET THE SAID OBJECTI ON OF THE ITA NO. 700/HYD/2012 SMT. K. SHALINI ================== 7 ASSESSING OFFICER. THE MERE CONFIRMATION FILED FROM SRI P.S. REDDY FOR THE SAID PURCHASE CANNOT BE CONSIDERED AS ANY JUSTIFICATION FOR ACCEPTING THE CONSIDERATION @ RS. 119.65 PER SHARE ONLY. 9. THE DR FURTHER SUBMITTED THAT THE ARGUMENT OF THE ASSESSEE THAT THE SHARES HAD TO BE SOLD AT A LESSER PRICE AS THOSE PERTAINED TO A PRIVATE LIMITED COMPANY, WHERE IN, THERE ARE RESTRICTIONS ON TRANSFER OF SHARES, OR THAT THE COMPANY WOULD NOT ACCEPT SUCH TRANSFER TO ANY OUTSIDER, OBV IOUSLY, SUCH AN ARGUMENT IS BASED ONLY ON CONJECTURES, SURM ISES AND PROBABILITY. IT HAS NOT BEEN DEMONSTRATED THAT THE COMPANY HAD REJECTED ANY PROPOSAL OF THE ASSESSEE TO SELL T HE SHARES TO ANY OUTSIDER. BESIDES, IT IS SEEN THAT EVEN IN RESP ECT OF THE SHARES SOLD TO SRI SIMHADRI REDDY, THE PRICE WAS ME TICULOUSLY ARRIVED TO THE EXTENT OF 'PAISE'. THIS DEMONSTRATE S THAT THE ASSESSEE AND THE BUYER WORKED OUT THE PRICE IN RESP ECT OF SALE OF 30,925 SHARES ALSO IN A VERY DETAILED AND A NALYTICAL MANNER, AND THEREFORE, THERE IS NO MERIT IN THE CON TENTION OF THE ASSESSEE THAT THE FURTHER SALES WERE MADE ONLY ON ACCOUNT OF NEED OF FUNDS. IT SHOWS THAT THERE WAS N O URGENCY IN THE SAID SALE, EVEN THOUGH ON THIS OCCASION SHAR ES WERE SOLD AT A RATE SUBSTANTIALLY LESSER THAN THAT AT WH ICH SHARES WERE SOLD JUST 2 MONTHS BEFORE. ITA NO. 700/HYD/2012 SMT. K. SHALINI ================== 8 10. THE DR FURTHER SUBMITTED THAT IT IS CLEAR THAT EVEN THOUGH THE ASSESSEE HAD THE KNOWLEDGE REGARDING THE METHOD OF ARRIVING AT THE VALUATION OF SHARES FOR S ALE, SHE DID NOT EXPLAIN IT BEFORE THE ASSESSING OFFICER. NOTHIN G COULD BE SUBMITTED EVEN DURING THE COURSE OF APPELLATE PROCE EDINGS AS TO HOW THE VALUE WAS SO ADOPTED AT RS. 119.65 PER S HARE ONLY AND NOT MORE OR LESS. BESIDES, NOTHING WAS SUBMITTE D TO EXPLAIN AS TO HOW THE VALUE HAD BEEN ARRIVED AT RS. 275/ - EARLIER AND WHAT WERE THE FACTORS CONSIDERED FOR AC CEPTING THE LESSER VALUE OF RS. 119.65 PER SHARE JUST AFTER 2 MONTHS. THEREFORE, THERE IS CONSIDERABLE MERIT IN THE STAND TAKEN BY THE ASSESSING OFFICER THAT THE ASSESSEE FAILED TO DISCHARGE THE ONUS CAST UPON IT IN TERMS OF THE PROVISIONS OF THE INDIAN EVIDENCE ACT, 1872 BY SUPPRESSING THE NECESSARY EVI DENCE WHICH WAS WITHIN HER SPECIFIC KNOWLEDGE. FINDING NO INFIRMITY IN THE ACTION OF THE ASSESSING OFFICER, T HE ADDITION OF RS. 47,29,790 ON ACCOUNT OF DIFFERENCE IN SALE PRIC E OF SHARES SOLD TO M/S. BLACKSTONE AS COMPARED TO THE SUBSEQUE NT SALE TO SRI SIMHADRI REDDY IS TO BE CONFIRMED. 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE THE DR CONTENTION IS THAT THE VALUE OF THE SHARES SOLD BY THE ASSESSEE IS UNDERST ATED BY RS. 155.97 PS. PER SHARE WORKED OUT ON TOTAL SHARES OF 30,325 AT RS. 47,29,790 AND THE VALUE SHOWN BY THE ASSESSEE I S NOT AS ITA NO. 700/HYD/2012 SMT. K. SHALINI ================== 9 PER MARKET VALUE AS THE ASSESSEE ON EARLIER OCCASIO N SOLD THE SAME TO M/S. BLACKSTONE AT AN HIGHER PRICE. THE FI RST SALE TRANSACTION TOOK PLACE ON 29.11.2007. SUBSEQUENT S ALE WAS IN THE MONTH OF FEBRUARY, 2008. THERE IS ONLY A GA P OF TWO TO THREE MONTHS. BEING SO, THE ASSESSING OFFICER WAS OF THE OPINION THAT THE VALUE OF THE SHARES SOLD IN FEBRUA RY 2008 WAS UNDERSTATED AND NOT GENUINE. IN OUR OPINION, T O COME TO THIS CONCLUSION THE ASSESSING OFFICER IS REQUIRED T O BRING ON RECORD THE CORRECT MARKET VALUE PREVAILING IN THE M ONTH OF FEBRUARY, 2008. THE SHARES SOLD BY THE ASSESSEE AR E SHARES OF PRIVATE LIMITED COMPANY I.E., M/S. MTAR TECHNOLO GIES PVT. LTD., HYDERABAD. AS PER COMPANIES ACT, TRANSFER OF SHARES OF A PRIVATE LIMITED COMPANY IS RESTRICTED. THEY CANNO T BE FREELY BOUGHT AND SOLD IN THE OPEN MARKET. FIRST SALE TRA NSACTION OF SHARES TO M/S. BLACKSTONE IS WITH REFERENCE TO ACQU IRE THE CONTROLLING RIGHT OVER M/S. MTAR TECHNOLOGIES PVT. LTD. THE SECOND SALE TRANSACTION OF SHARES BY THE ASSESSEE T O A PERSON IS NOT FOR THE PURPOSE OF HAVING SUCH CONTROLLING I NTEREST OVER M/S. MTAR TECHNOLOGIES PVT. LTD. BEING SO, IN OUR OPINION, THE VALUE ADOPTED ON FIRST OCCASION CANNOT BE A BAS IS TO DETERMINE THE SALE PRICE WITH REFERENCE TO SALES TO SRI SIMHADRI REDDY. THE CALCULATION OF CAPITAL GAIN CA N ONLY BE WITH REFERENCE TO ACTUAL AMOUNT RECEIVED AND NOT ON ANY NOTIONAL VALUE WHICH IS TAKEN TO BE THE MARKET VALU E. THE SALE CONSIDERATION ACTUALLY RECEIVED BY THE ASSESSE E CANNOT ITA NO. 700/HYD/2012 SMT. K. SHALINI ================== 10 BE REJECTED UNLESS THERE IS EVIDENCE TO SHOW THAT T HE ASSESSEE HAS RECEIVED MORE MONEY THAN WHAT IS SHOWN TO THE DEPARTMENT. EVEN IF IT IS ASSUMED THAT THE SHARES ARE TRANSFERRED ON A VALUE LESS THAN THE MARKET VALUE, AND AS LONG AS SALE CONSIDERATION RECEIVED IS AS PER THE DOCUME NT, THE CAPITAL GAIN CAN ONLY BE CALCULATED ON THE ACTUAL A MOUNT RECEIVED AND NOT ON ANY OTHER VALUE TAKEN TO BE THE MARKET VALUE. IN THE PRESENT CASE, THERE IS NO EVIDENCE T O SHOW THAT THE ASSESSEE HAVING RECEIVED SALE CONSIDERATION IN EXCESS OF THE CONSIDERATION SHOWN TO THE DEPARTMENT. WE ARE NOT IN A POSITION TO HOLD THAT THE ASSESSEE HAS SUPPRESSED T HE SALES CONSIDERATION. EVEN OTHERWISE, THE EXPRESSION 'FUL L VALUE OF CONSIDERATION' CANNOT BE CONSTRUED AS HAVING REFERE NCE TO THE MARKET VALUE OF THE ASSETS, BUT ONLY MEANS THAT THE FULL VALUE OF CONSIDERATION RECEIVED BY THE ASSESSEE ON SALE. ACCORDINGLY, PLACING RELIANCE ON THE JUDGEMENT OF T HE SUPREME COURT IN THE CASE OF K.P. VERGHESE VS. ITO (131 ITR 597) (SC), WHEREIN THE APEX COURT HELD THAT SECTION 52(2) OF THE INCOME-TAX ACT, 1961, CAN BE INVOKED ONLY WHERE THE CONSIDERATION FOR THE TRANSFER OF A CAPITAL ASSET H AS BEEN UNDERSTATED BY THE ASSESSEE, OR, IN OTHER WORDS, TH E FULL VALUE OF THE CONSIDERATION IN RESPECT OF THE TRANSFER IS SHOWN AT A LESSER FIGURE THAN THAT ACTUALLY RECEIVED BY THE AS SESSEE, AND THE BURDEN OF PROVING UNDERSTATEMENT OR CONCEALMENT IS ON THE REVENUE; AND THE SUB-SECTION HAS NO APPLICATION IN THE ITA NO. 700/HYD/2012 SMT. K. SHALINI ================== 11 CASE OF A BONA FIDE TRANSACTION WHERE THE CONSIDERA TION RECEIVED BY THE ASSESSEE HAS BEEN CORRECTLY DECLARE D. IN VIEW OF THE FINDING OF FACT RECORDED BY THE TRIBUNAL, TH ERE WAS NO QUESTION OF INVOKING SECTION 52(2) OF THE ACT. THE HIGH COURT WAS, THEREFORE, RIGHT IN REFUSING TO CALL FOR THE R EFERENCE FROM THE TRIBUNAL AND REJECTING THE APPLICATION UNDER SE CTION 256(2) OF THE ACT, WE ARE INCLINED TO ALLOW THE GRO UNDS TAKEN BY THE ASSESSEE. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH DECEMBER, 2012. SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 28 TH DECEMBER, 2012 TPRAO COPY FORWARDED TO: 1. SMT. K. SHALINI, C/O. M/S. A.V. RAGHURAM & K. VASAN TKUMAR, ADVOCATES, 610, 6 TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD-4. 2. THE ADDL. COMMISSIONER OF INCOME - TAX , RANGE - 6, HYDERABAD. 3. THE COMMISSIONER OF INCOME - TAX (APPEALS) - IV, HYDERABAD. 4. THE COMMISSIONER OF INCOME - TAX - III, HYDERABAD. 5. THE DR B - BENCH, ITAT, HYDERABAD.