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10-04-2019, Bhumala Uma Rani, Section 50C, 132, 153C, Tribunal Visakhapatnam

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1 week 1 day ago #9124 by amit
Section - 50C, 132, 153C, 153A, 54EC, 54F, 292C
Order Date - 10-04-2019
Favouring - Revenue
Court - Tribunal Visakhapatnam
Appellant - DCIT
Respondent - Bhumala Uma Rani
Justice - V. DURGA RAO JM & D.S. SUNDER SINGH AM
Citation - 419Taxpundit159
Appeal No. - I.T(SS)A.No.05/Viz/2018
Asstt. Year - 2014-15

Order

PER : D.S. SUNDER SINGH

These appeals are filed by the revenue against the orders of the Commissioner of Income Tax (Appeals) [CIT(A)]-3, Visakhapatnam vide I.T.A.Nos.286, 288 & 292/2016-17/CIT(A)-3/VSP/2017-18 dated 26.02.2018 and cross objections are filed by the assessee for the Assessment Year (A.Y.) 2010-11 and 2014-15. Since the issues involved in these appeals are common, the appeals are clubbed, heard together and a common order is being passed for the sake of convenience as under.

I.T(SS)A.No.05 & 07/Viz/2018 & CO No.64 & 66/Viz/2018,A.Y.2014-15

2. In these appeals, facts are identical in both the appeals for the A.Y. 2014-15. Hence the facts are extracted from the appeal of Smt. Bhumala Uma Rani. The assessee Bhumala Uma Rani is wife of Shri B.Mallikarjuna Reddy. Shri Bhumala Venkata Narasimha Reddy and Shri Bhumala Mallikarjuna Reddy are brothers. Shri Bhumala Mallikarjuna Reddy and Shri Bhumala Venkata Narsimha Reddy were the owners of land admeasuring Ac.1.42 cents situated at Nunna village, Vijayawada which is adjoining land of Siddartha Academy of General & Technical Education (in short ‘Siddartha Academy’). Shri Mallikarjuna Reddy has gifted his share of 0.71 cents to Smt. B.Uma Rani his wife.

2.1. The assessee is an individual, engaged in the business of trading in electrical appliances and the proprietrix of M/s Sri Sai Harsha Agencies. For the A.Y.2014-15 she did not file the return of income. A search u/s 132 was carried out in the case of Siddhartha Academy on 07.05.2014 and during the course of search, certain incriminating material was found in the form of loose sheets pertaining to purchase of vacant land of Ac.1.42 cents situated at Nunna by Siddartha Academy in January 2014 for a consideration of Rs.7,49,05,500/-including the stamp duty and registration charges from the assessee Smt.Bhumala Uma Rani and her brother-in-law, Shri Bhumala Venkata Narasimha Reddy @Ac.0.71 cents each. The said material was seized as Annexure A/SAGTE/3(Annexure-10) of page Nos. 37 and 38 wherein the entire sale transactions were recorded. In the incriminating material marked as Annexure A/SAGTE/3, in page No.42, noting was found regarding the sale of 0.71 acres of land by the assessee for a consideration of Rs.3,72,75,000/- @ 5,25,75,000/ per acre and out of which an amount of Rs.24,85,000/- was paid to the assessee and a sum of Rs.6,17,500/- each to her two daughters namely B.Janaki Reddy and
B. Bala Saraswathi by way of DDs and the balance amount was paid in cash. Search proceedings were also conducted covering the assessee. As per the material found during the course of search in the premises of Siddhartha Academy, the AO had issued notice u/s 153C r.w.s. 153A on 25.08.2015 calling for the return of income for the A.Y. 2014-15. In response to the notice u/s 153C, the assessee filed her return of income on 21.03.2016 and admitted the income from business of Rs.3,09,196/- and capital gains on sale of land of Rs.24,85,000/. During the proceedings, the assessee had denied having received any payment over and above the sale consideration of Rs.24,85,000/- as per the registered document and claimed the deduction of Rs.24,80,000/- u/s 54EC for purchase of Rural Electrification Bonds(REC). The AO confronted the assessee with the material found during the course of search in the premises of Siddhartha Academy for the sale consideration of Rs.7,45,50,000/- for acres 1.42 @ Rs.5,25,00,000/- per acre and aggregate cash payment of Rs.6,95,80,000/- to both the coowners. The land owners i.e. the assessee and her brother-in-law denied having received any payment in cash and stated that they have received only a sum of Rs.49,70,000/- @Rs.24,85,000/- each and did not receive any consideration over and above the amount recorded in the registered deeds.

The AO not being convinced with the explanation of the assessee, having found the material evidencing the payment of Rs.7,45,50,000/-, assessed the entire sum of Rs.7,45,50,000/- in the hands of the land owners i.e. the assessee and her brother-in-law. Accordingly, the AO brought a sum of Rs.3,72,75,000/-, 50% of the sale consideration as per the loose sheets as capital gains and allowed indexed cost of acquisition of Rs.1,87,800/- and exemption u/s 54EC of Rs.24,67,505/- and taxed the balance amount of Rs.3,49,28,891/- in the hands of the assessee. 2.2. Similarly in the case of Shri B.V.Narasimha Reddy, the AO assessed 50% share of Rs.7,49,05,500/- for an amount of Rs.3,72,75,000/- in his

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