DCIT, Hyderabad v. Dr. K.Anji Reddy, Hyderabad

ITA 489/HYD/2010 | 1991-1992
Pronouncement Date: 13-01-2011 | Result: Dismissed

Appeal Details

RSA Number 48922514 RSA 2010
Bench Hyderabad
Appeal Number ITA 489/HYD/2010
Duration Of Justice 9 month(s) 13 day(s)
Appellant DCIT, Hyderabad
Respondent Dr. K.Anji Reddy, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 13-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 13-01-2011
Date Of Final Hearing 14-12-2010
Next Hearing Date 14-12-2010
Assessment Year 1991-1992
Appeal Filed On 31-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI AKBER BASHA ACCOUNTANT MEMBER GTA NO.489/HYD/2010 ASSESSMENT YEAR 1991-92 DY. COMMISSIONER OF INCOME- TAX CIRCLE 1(2) HYDERABAD VS DR.K.ANJI REDDY HYDERABAD (PAN NOT AVAILABLE ) (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. V.MADHUVANI RESPONDENT BY : SHRI CH.KRISHNA REDDY O R D E R PER G.C.GUPTA VICE PRESIDENT: THIS APPEAL BY THE REVENUE UNDER THE GIFT TAX ACT FOR THE ASSESSMENT YEAR 1991-92 IS DIRECTED AGAINST THE ORDE R PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS). 2. GROUNDS OF THE REVENUE IN THIS APPEAL READ AS FO LLOWS- 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS O N THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASSES SEE HAS FURNISHED THE INFORMATION IN INCOME TAX AND WEALTH TAX RETURN HENCE THERE IS NO CONCEALMENT O F GIFT OR FURNISHING OF INACCURATE PARTICULARS IN RES PECT OF IMPUGNED GIFT. 3. THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACT TH AT THE PENALTY OF RS.24 33 120-/- LEVIED U/S. 17(1)(C) OF THE GIFT TAX ACT IS WITH IN THE LIMITS. 4. THE LEARNED CIT(A) OUGHT TO HAVE CONFIRMED THE PENALTY LEVIED. GIFT TAX APPEAL NO.489/H/2010 DR.K.ANJI REDDY HYDERABAD 2 2 3. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED T HAT THE ONLY ISSUE IN THIS APPEAL IS REGARDING THE VALIDITY OF THE PENALTY LEVIED UNDER S.17(1)(C) OF THE GIFT TAX ACT. SHE SUBMITTED THAT THERE WAS CLEAR UNDER-STATEMENT IN THE VALUE OF SHARES AND CORRECT VALUE WAS NOT DISCLOSED IN THE INCOME-TAX AND WEALTH TAX RETURN S OF THE ASSESSEE AND THEREFORE THERE WAS A CONCEALMENT OF GIFT OR FURNISHING OF INACCURATE PARTICULARS OF GIFTS ON THE PART OF THE ASSESSEE AND THE PENALTY UNDER S.17(1)(C) OF THE GIFT TAX ACT WAS RIGHT LY LEVIED BY THE ASSESSING OFFICER. SHE SUBMITTED THAT THE ASSESSEE HAS SOLD 5 5 0 000 SHARES OF THE COMPANY AT A FACE VALUE OF RS.10 EACH WHER EAS ON VERIFICATION OF THE WEALTH-TAX RECORDS THE VALUE OF E ACH SHARE OF THE SAID COMPANY WAS ARRIVED AT RS.20. SHE RELIED ON THE ORDER OF THE ASSESSING OFFICER AND REFERRED TO THE RELEVANT PARAS OF T HE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IN SUPPORT OF HER CASE. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ALL THE MATERIAL FACTS RELATING TO THE SALE OF SHARES OF TH E FACE VALUE OF RS.10 PER SHARE WERE DISCLOSED IN THE INCOME TAX AND WEAL TH TAX RETURNS FILED BY THE ASSESSEE. HE SUBMITTED THAT THERE W AS NO INTENTION ON THE PART OF THE ASSESSEE TO HIDE ANY MATE RIAL FACTS FROM THE DEPARTMENT. HE SUBMITTED THAT PROVISIONS OF S.17(1 )(C ) OF THE GIFT TAX ACT DO NOT HAVE EXPLANATION CORRESPONDING TO THE EXPLANATION BELOW PROVISION OF S.271(1)(C) OF THE IN COME-TAX ACT AND THE WORDS DELIBERATE CONCEALMENT' IS ALSO MENTIONED IN THE PROVISIONS OF S.17(1)(C) OF THE GIFT TAX ACT. HE SUBMITTED THAT THE ASSESSEE WAS UNDER A BONAFIDE BELIEF AND SINCE ON THE ISSU E OF GIFT TAX APPEAL NO.489/H/2010 DR.K.ANJI REDDY HYDERABAD 3 3 VALUATION OF THE SHARE S IN QUESTION TWO VIEWS ARE POSSI BLE ASSESSEE COULD NOT BE HELD GUILTY OF CONCEALMENT OF GIFT OR FIL ING OF INACCURATE PARTICULARS OF GIFT MERELY BECAUSE IT HAD FOLLOWED ON E OF THE POSSIBLE VIEWS. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY. WE FIND THAT THE ASSESSEE HAS DISCLOSED ALL THE MATERIAL FACTS RELATING TO SALE OF 5 50 000 SHARES DURING THE RELEVANT PERIOD AND VALUE THEREOF IN THE INCOME-TAX AND WEALTH-TAX RETURNS FILED WITH T HE DEPARTMENT. WE FIND THAT THE CIT(A) HAS PASSED A WELL REASONED SPEA KING ORDER ON THIS ISSUE WHILE CANCELLING THE PENALTY IMPOSED ON TH E ASSESSEE. HE MENTIONED THAT CORRECT METHOD OF VALUATION OF THE SHARES IN QUESTION IS AS PER S.6 OF THE GIFT TAX ACT READ WITH SCH EDULE-II THREOF AND AS PER VALUATION ARRIVED AT AS PER THIS METHOD V ALUE OF EACH SHARE COMES TO RS.11.09. THIS VALUE OF RS.11.09 IS VERY CLOSE TO THE FACE VALUE OF EACH SHARE OF RS.10 AND THEREFORE THE A SSESSING OFFICER WAS NOT JUSTIFIED IN HOLDING THE ASSESSEE GUILTY OF CONCEA LMENT OR FURNISHING INACCURATE PARTICULARS THEREOF. WE FIND TH AT THIS IS A CASE OF 'DEEMED GIFT' ASSESSED IN THE HANDS OF THE ASSESSEE AND NOT A CASE OF CLEAR TRANSACTION OF GIFT ON THE PART OF THE ASSESSE E. WE FIND THAT THERE IS NO MATERIAL BROUGHT ON RECORD TO SHOW TH AT THE ASSESSEE HAS MADE ANY DELIBERATE ATTEMPT TO WITHHOLD ANY MAT ERIAL INFORMATION IN HIS INCOME-TAX AND WEALTH-TAX RETURNS FROM THE KNOWLEDGE OF THE ASSESSING OFFICER. THE CIT(A) HAS OBSE RVED IN HIS APPELLATE ORDER THAT THE ASSESSING OFFICER IN RESPECT OF INCOME TAX WEALTH TAX AND GIFT TAX ASSESSMENT PROCEEDINGS IS ONE AND THE SAME AND THEREFORE IT COULD NOT BE SAID THAT THE ASSESSEE HAS MADE ANY DELIBERATE ATTEMPT TO WITHHOLD INFORMATION OR HAS F URNISHED ANY INACCURATE INFORMATION IN THE INCOME TAX AND WEALTH TA X RETURNS SO GIFT TAX APPEAL NO.489/H/2010 DR.K.ANJI REDDY HYDERABAD 4 4 AS TO HIDE ANY INFORMATION FROM THE KNOWLEDGE OF THE ASSESSING OFFICER FOR THE PURPOSE OF GIFT TAX ASSESSMENT. WE FIND T HAT THERE IS FORCE IN THE ARGUMENT OF THE ASSESSEE THAT IT WAS UNDER A BONAFIDE BELIEF THAT NO GIFT HAS ARISEN OUT OF TRANSFER OF SHARE S BY HIM TO THE CONCERN IN WHICH HE HAS SUBSTANTIAL INTEREST. WE FIND THA T IT IS A CASE WHERE TWO VIEWS REGARDING VALUATION OF SHARES TRANSFERR ED BY THE ASSESSEE WERE POSSIBLE AND THE ASSESSEE HAS ADOPTED ONE OF TH E POSSIBLE VIEWS AND THE MERE FACT THAT THE VIEW ADOPTED BY THE ASSESSEE WAS NOT ACCEPTED BY THE REVENUE AUTHORITIES IS NO GROUND TO CONCLUDE THAT THE ASSESSEE WAS GUILTY OF CONCEALMENT OF G IFT OR FILING OF INACCURATE PARTICULARS OF GIFT FOR THE RELEVA NT PERIOD. IN THIS VIEW OF THE MATTER WE HOLD THAT THERE IS NO MISTAKE IN THE ORDER OF THE CIT(A) IN CANCELING THE PENALTY IMPOSED UNDER S. 17(1)(C) OF THE ACT ON THE ASSESSEE AND ACCORDINGLY THE ORDER OF THE CI T(A) IS UPHELD AND THE GROUNDS OF APPEAL OF THE REVENUE ARE REJECTED. 6. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 13.1.2011 SD/- S D/- (AKBER BASHA) (G.C. GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DATED THE 13 TH JANUARY 2011 COPY FORWARDED TO: 1. DR.K.ANJI REDDY 8-2-586/1 ROAD NO.7 BANJARA HI LLS HYDERABAD. 2. THE DY. COMMISSIONER OF INCOME-TAX CIRCLE 1(2) HYDE RABAD 3. CIT(A)-II HYDERABAD. 4. CIT-I HYDERABAD 5. THE D.R. ITAT HYDERABAD. B.V.S.