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Smt. N. Dhana Laxmi, L/R of Late N. Prabha Rao, Hyderabad Versus Asst. Commissioner of Income Tax, Circle-6 (1) , Hyderabad

2015 (7) TMI 866 - ITAT HYDERABAD

Addition under the head “Income from Other Sources” - amount does not represent the sale consideration of the property sold and consequently, the exemption u/s. 54F of the Act was also denied by AO - Held that:- There is nothing on record to suggest that the appellant was having any other source of income or the appellant is capable of earning that much of money. Having regard to her state of health, age and qualification etc., it is highly improbable that appellant could have earned so much of .....

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ing Officer is not obliged under law to make addition in every case where the explanation offered by the assessee is found to be not satisfactory. This ratio was laid down by the Hon’ble Supreme Court in the case of [CIT vs. P.K.Noorjahan - 1997 (1) TMI 6 - SUPREME Court] which is squarely applicable to the facts of the present case. Therefore, we hold that the Assessing Officer is not justified in holding that the sum of ₹ 3,00,00,000/- is not attributable to sale of property and making a .....

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Dey and Shri Inturi Rama Rao, JJ. For the Petitioner : Shri Mohd. Afzal, AR For the Respondent : Shri Rama Kishna, Bandi, DR ORDER PER INTURI RAMA RAO, A.M. : This is an appeal by assessee against the order of Commissioner of Income Tax (Appeals)-IV, Hyderabad, dated 29-06-2012 for the Assessment Year (AY) 2009-10, raising the following Grounds of Appeal: 1. The order of the learned Commissioner of Income Tax (Appeals)-IV, Hyderabad is against law and probabilities of case. 2. The learned Commi .....

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ioner erred in not considering the Affidavit given by the assessee before the Income Tax Authority and also erred in not considering the statement of the assessee before the ADIT (Inv.), and further erred in not appreciating the theory of preponderance of evidence. 5. The learned Commissioner of Income Tax (Appeals) ought to have held the total sale consideration at ₹ 10 Crores and should have allowed the claim of deduction u/s. 54 at ₹ 8,11,50,100/- as claimed on the strength of Aff .....

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377; 4,54,195/- and claimed refund of ₹ 28,04,218/-.The return of income was accepted u/s. 143(1) of the Act. Subsequently, after gathering information relating to sale of property situated at Plot No.471, Dr.No.8-2-293/82/A/471, Road No.36, Jubilee Hills, Hyderabad admeasuring 1378 Sq. yards in exercise of powers u/s. 133(6) of the Act, the reassessment notice u/s 148 dated 28.04.2011 was issued. From the details, the Assessing Officer formed an opinion that the appellant had not received .....

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bsequently, after issue of notice u/s. 143(2) of the Act, the Asst. Commissioner of Income Tax, Circle 6(1), Hyderabad, had completed the assessment u/s. 143(3) of the Act vide order dated 13.12.2011 at a total income of ₹ 3,04,99,640/-. While doing so, the Assessing Officer made addition of ₹ 3,00,00,000/- under the head Income from Other Sources by holding that this amount does not represent the sale consideration of the property sold and consequently, the exemption u/s. 54F of the .....

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was acquired by State Government for road widening purposes thereby leaving balance of 845 Sq. yards. It was stated that 50% of the land was gifted orally to her daughter, Smt. N. Dhanalaxmi. This land was sold along with her daughter to M/s. Balee Plastics Private Limited, Mumbai vide Sale Deed No.2216 of 2008, dated 10.06.2008. The consideration stated in the sale deed was only ₹ 7,00,00,000/- and whereas according to the appellant the total sale consideration received was ₹ 10,00 .....

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oposed to assess the entire sale consideration only in the hands of appellant alone. In response to this proposal, the appellant along with her daughter, Smt. N.Dhanalaxmi filed an affidavit averring inter alia that they sold the property for ₹ 10,00,00,000/- out of which ₹ 3,00,00,000/- was received in cash and in order to avoid litigation and buy peace with the department, agreed for assessment of entire sale consideration in the hands of appellant alone. It was further averred tha .....

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y sold also denied the exemption u/s. 54 of the Act on this amount. 5. Aggrieved by this order, an appeal was filed before the Commissioner of Income Tax (Appeals)-IV, Hyderabad. The appellant contended before the Commissioner of Income Tax (Appeals) that the Assessing Officer was not justified in making addition of ₹ 3,00,00,000/- on the following grounds:- (i) The Appellant had admitted before ADIT (Investigation) Unit-II, Hyderabad on 27.07.2008 i.e., immediately after transaction of th .....

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r in making the addition and dismissed the appeal vide his order dated 29.06.2012. 6. Being aggrieved, the appellant had come up with the present appeal before us with a delay of 110-days in filing the appeal. The appellant filed petition for condonation of the delay stating that the delay was on account of death of the appellant, leaving behind her lone daughter and her daughter alone in the capacity of Legal Representative (LR) had to take steps for filing appeal and her daughter, following th .....

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d, therefore, we condone the delay and admit the appeal. Now, we proceed with the adjudication of the grounds of appeal. The appellant had raised as many as six grounds of appeal out of which ground No.1 and 6 are general in nature and do not require any adjudication. Grounds Nos.2, 3 and 4 are pertaining to addition of ₹ 3,00,00,000/- under the head Income from Other Sources and Ground No.5 is pertaining to relief under Section 54 of the Act. 8. Now, we shall deal with the ground relating .....

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was uneducated and unskilled and there was no probability of earning a sum of ₹ 3,00,00,000/- from undisclosed sources and, therefore, no addition should be made under the head Income from Other Sources u/s. 69 of the Act. In support of this proposition, he relied on the judgment of the Hon ble Supreme Court in the case of CIT vs. Smt. P.K.Noorjahan 237 ITR 570. He further made submission that the conduct of appellant by paying advance tax on the said sum and as well as admission made befo .....

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f proposition that when the preponderance of probability is more in favour of the explanation of the assessee, no addition should be made rejecting the explanation of the assessee. 9. On the other hand, the learned Senior Departmental Representative vehemently supported the orders of the lower authorities. He further argued that when the appellant had failed to furnish name and address of the buyer of the property, the explanation tendered by the appellant cannot be believed. 10. We heard the ri .....

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ere paid in cash. Her further conduct by paying advance tax as well as filing returns of income voluntarily disclosing total consideration of ₹ 10,00,00,000/- goes to prove that the amount of ₹ 3,00,00,000/- was received in connection with the sale of property only. Further, the statement before ADIT (Investigation) was brought on record by Assessing Officer himself and he has not chosen to examine the buyer of property in this regard. The fact that the appellant had failed even to r .....

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. Perhaps, the Assessing Officer as well as ADIT (Investigation) had chosen not to make further enquiries on being satisfied with the disclosure of higher consideration than was stated in the conveyance deed or in the sale deed. The statement made before ADIT (Investigation) remains uncontroverted. Simply because it was found subsequently that this statement goes against the interests of Revenue, it is not open to Revenue to reject the evidence. It is settled principles of law that in assessment .....

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