Smt. R. Prabhavathi, Hyderabad V. ACIT, Tirupathi

ITSSA 20/HYD/2010

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8536 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 11-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 10-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMLAN TRIPATHY
• Assessee Lawyers: K A SAI PRASAD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER IT(SS)A NO.20/HYD/10 (BLOCK PERIOD FROM 1.4.1996 TO 7.2.2003) SMT. R. PRABHAVATHI, TIRUPATI. ( PAN - ADTPR 0133 M ) V/S. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, TIRUPATI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.A.SAI PRASAD RESPONDENT BY : SHRI AMLAN TRIPATHY O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE BLOCK PERIOD FROM 1.4.1996 TO 7.2.2003 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS). 3. THE ONLY ISSUE IN THIS APPEAL IS REGARDING VAL IDITY OF PENALTY IMPOSED UNDER S.158BFA(2) OF THE ACT. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS A GENERAL POWER OF ATTORNEY HOLDER GIV EN BY ONE SHRI P.V.SUBBAIAH, TO SELL OR ENTER INTO AGREEMENT OF SA LE OF LAND ETC. THE SAID GPA WAS CANCELLED ON 20 TH JUNE, 2002. THERE WAS SEARCH UNDER S.132 OF THE ACT ON 7.2.2003 IN THE CASE OF HUSBAND OF THE ASSESSEE AND ONE OTHER PERSON, SHRI A. SANATH KUMAR, WHEREIN THE SALE DEEDS IT(SS)A NO.30/HYD/10 SMT. R.PRABHAVATHI, TIRUPATI. 2 OF THE CONSTRUCTED FLATS SIGNED BY THE ASSESSEE AS GPA HOLDER ON BEHALF OF P.V.SUBBAIAH WERE FOUND. DURING THE COUR SE OF POST SEARCH ENQUIRIES BY THE DDIT)(INV), THE LAND OWNER SHRI P. V.SUBBAIAH TOLD THAT HE HAS RECEIVED ONLY RS.6 LAKHS FROM THE ASSES SEE AND NOTHING MORE, WHEREAS THE ASSESSEE STATED THAT SHE HAS HAND ED OVER THE ENTIRE SALE CONSIDERATION, AFTER DEDUCTING HER COMM ISSION TO THE LAND OWNER, SHRI P.V.SUBBAIAH. THE LEARNED COUNSEL FOR T HE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HIMSELF WAS NO T SURE AS TO IN WHOSE HANDS THE BALANCE AMOUNT SHOULD BE ASSESSED A ND ON THE BASIS OF THE PROBABILITY, ASSESSED THE BALANCE AMOUNT IN THE HANDS OF THE ASSESSEE. PROTECTIVE ASSESSMENT WAS MADE IN THE HA NDS OF THE LAND OWNER SHRI P.V.SUBBAIAH. HE SUBMITTED THAT THERE I S NO RELATIONSHIP BETWEEN THE ASSESSEE AND THE LAND OWNER, SHRIP.V.SU BBAIAH AND THAT NO LEGAL ACTION WAS TAKEN BY THE LAND OWNER, SHRI P .V.SUBBAIAH, AGAINST THE ASSESSEE FOR THE AMOUNT NOT PAID TO HIM BY THE ASSESSEE. HE SUBMITTED THAT THE ASSESSMENT PROCEEDINGS AND PE NALTY PROCEEDINGS ARE DIFFERENT AND THERE IS NO MATERIAL BROUGHT ON RECORD TO SUGGEST THAT THE ASSESSEE IN FACT HAS NOT PAID THE ENTIRE AMOUNT TO THE LAND OWNER SHRI P.V.SUBBAIAH. HE RELIED ON THE DEC ISION OF THE HONBLE APEX COURT IN CIT V/S. DAULAT RAM RAWATMULL (87 IT R 349) IN SUPPORT OF HIS ARGUMENTS. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE REFERR ED TO THE RELEVANT PORTIONS OF THE ASSESSMENT ORDER IN SUPPOR T OF HIS SUBMISSION THAT THE AMOUNT NOT PAID TO THE LAND OWNER BY THE A SSESSEE WAS RIGHTLY ASSESSED IN THE HANDS OF THE ASSESSEE. HE SUBMITTED THAT THE LAND OWNER, SHRI P.V.SUBBAIAH WAS EXAMINED BY THE A SSESSING OFFICER AND ALLOWED TO BE CROSS-EXAMINED BY THE ASSESSEE AN D THE ADDITION MADE IN THE QUANTUM CASE OF THE ASSESSEE HAS BEEN C ONFIRMED IN IT(SS)A NO.30/HYD/10 SMT. R.PRABHAVATHI, TIRUPATI. 3 APPEAL BY THE CIT(A) AS WELL AS THE TRIBUNAL. HE SU BMITTED THAT THE ASSESSEE HAS NOT MAINTAINED ANY REGULAR BOOKS OF AC COUNT NOR FILED ANY CASH FLOW STATEMENT. THE LAND OWNER SHRI P.V.S UBAIAH, HAS CATEGORICALLY STATED IN HIS STATEMENT THAT THE ASS ESSEE HAS NOT PAID ANYTHING MORE THAN RS.6 LAKHS TO HIM. HE SUBMITTED THAT THE CIT(A) AND THE TRIBUNAL HAVE CONSIDERED THE ENTIRE EVIDENC E AVAILABLE ON RECORD AND HAVE CONCLUDED THAT THE AMOUNT WAS RIGHT LY ASSESSED IN THE HANDS OF THE ASSESSEE. HE RELIED ON A SERIES O F DECISIONS IN SUPPORT OF HIS ARGUMENTS, AND THEY ARE- (A) P.C. JOSEPH AND BROTHERS V/S. CIT (243 ITR 818)-KER . (B) POLO SINGH AND CO. V/S. CIT (98ITR 564)-DEL. (C) CIT V/S. DR. R.C.GUPTA AND CO.(122 ITR 567)-RAJ. (D) YENKEY ROLLER FLOUR MILLS V/S. ACIT (313 ITR (AT) 1 )(COCH) (E) UNION OF INDIA V/S. DHARMENDRA TEXTILE PROCESSORS ( 306 ITR 277)-SC 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THE ASSESSEE IS A GENERAL POWER OF ATTORNEY HOLDER OF L AND OWNER OF THE PROPERTY, SHRI P.V.SUBBAIAH FOR THE SALE OF PLOTS/F LATS. THE LAND OWNER, SHRI P.V.SUBBAIAH, HAS STATED THAT HE HAS RECEIVED ONLY RS.6 LAKHS FROM THE ASSESSEE AGAINST THE SALE OF PROPERTY AND NOTHING MORE. IT IS CLEAR FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HIMSELF WAS NOT VERY CLEAR AS TO IN WHOSE HANDS, THE AMOUNT SHO ULD BE ASSESSED, I.E. WHETHER THE AMOUNT OF SALE PROCEEDS IS ASSESSA BLE IN THE HANDS OF THE LAND OWNER SHRI P.V.SUBBAIAH OR IN THE HANDS OF THE ASSESSEE. THE ASSESSING OFFICER HAS RECORDED IN THE ASSESSMENT OR DER THAT SHRI P.V.SUBBAIAH, THE LAND OWNER HAS CATEGORICALLY STAT ED MORE THAN ONCE THAT HE DID NOT RECEIVE ANY BENEFIT OR INCOME FROM THE TRANSACTION, WHERE AS THE AGENT, NAMELY, THE ASSESSEE, SAYS THAT SHE HAD HANDED IT(SS)A NO.30/HYD/10 SMT. R.PRABHAVATHI, TIRUPATI. 4 OVER ALL THE RECEIPTS FROM M/S. HARINI CONSTRUCTION S AND ALSO THE SALE PROCEEDS RECEIVED FORM THE BUYERS OF SEVEN FLATS TO THE PRINCIPAL. THE ASSESSING OFFICER AT PAGE 5 OF THE ASSESSMENT ORDER HAS RECORDED THAT THE PROBABILITIES ARE THAT THE PRINCIPAL HAD TAKEN IN ALL RS.6 LAKHS FROM THE LADY AND IN TURN HANDED OVER THE LAND OF 17 CEN TS WHICH OUGHT TO HAVE BEEN GOT REGISTERED IN HER NAME BY THE LADY. THE ASSESSING OFFICER MADE A SIMILAR ADDITION ON THE SAME ISSUE I N THE CASE OF THE LAND OWNER SHRI P.V.SUBBAIAH ON PROTECTIVE BASIS. THESE FACTS OF THE CASE CLEARLY SHOW THAT THE ADDITION IN THE HANDS OF THE ASSESSEE WAS MADE ON THE BASIS OF PROBABILITIES ONLY. THERE IS N O MATERIAL AVAILABLE ON RECORD TO CONCLUDE EITHER IN FAVOUR OR AGAINST THE VERSION GIVEN BY THE LAND OWNER SHRI P.V.SUBBAIAH OR THE STATEMENT M ADE BY THE ASSESSEE AS GPA HOLDER. IN THESE FACTS, THE ADDIT ION MADE ON THE BASIS OF PROBABILITIES AND CONFIRMED IN APPEAL BY THE APPELLATE AUTHORITIES MAY BE JUSTIFIED, BUT THEY ARE NOT SUFF ICIENT TO VISIT THE ASSESSEE WITH PENALTY FOR CONCEALMENT OR FOR FILING INACCURATE PARTICULARS UNDER S.158BFA(2) OF THE ACT. WE FIND THAT THE LAND OWNER SHRI P.V.SUBBAIAH HAS NOT TAKEN ANY LEGAL ACTION AG AINST THE ASSESSEE FOR NOT MAKING THE PAYMENT DUE TO HIM IN FULL, NOR SUCH FACT OF NON- PAYMENT OF SALE CONSIDERATION WAS MENTIONED AS THE REASON, BY THE LAND OWNER IN THE DOCUMENT CANCELLING THE GENERAL P OWER OF ATTORNEY GIVEN BY HIM IN FAVOUR OF THE ASSESSEE. THE PART C ONSIDERATION PAID BY THE ASSESSEE HAS BEEN ACCEPTED BY THE LAND OWNER SH RI P.V.SUBBAIAH AS HAVING BEEN RECEIVED BY HIM. THE ADDITION HAS BE EN MADE ON PREPONDERANCE OF PROBABILITIES, BUT IN THE ABSENCE OF ANY EVIDENCE TO SHOW THAT THE ASSESSEE HAS IN FACT NOT PAID ANY AMO UNT IN EXCESS OF RS. 6 LAKHS TO THE LAND OWNER, SHRI P.V.SUBBAIAH, W E HOLD THAT THE PENALTY IMPOSED UNDER S.158BFA(2) IS NOT SUSTAINABL E IN LAW. IN THIS IT(SS)A NO.30/HYD/10 SMT. R.PRABHAVATHI, TIRUPATI. 5 VIEW OF THE MATTER, WE CANCEL THE PENALTY IMPOSED U NDER S.158BFA OF THE ACT AND THE GROUNDS OF APPEAL OF THE ASSESSEE A RE ALLOWED . 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 11.3.2011 SD/- SD/- (AKBER BASHA) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 11.3.2011 COPY FORWARDED TO: 1. SMT. R.PRABHAVATHI, ( TIRUPATI ) C/O. CH . PARTHASARATHY & CO., 1-1-298/2/B/3, 1 ST FLOOR, SOWBHAGYA AVENUE, STREET NO.1, ASHOKNAGAR, HYDERABAD 20 2. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, TIRUPATI . 3. COMMISSIONER OF INCOME - T AX(APPEALS), VI I , HYDERABAD. 4. COMMISSIONER OF INCOME - TAX CENTRAL HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.