Smt. B. Renuka Vs Joint Commissioner of Income Tax (Telangana High Court)
The appeal was filed by Smt. B. Renuka before the Telangana High Court under Section 260A of the Income Tax Act, 1961, challenging the ITAT Hyderabad Bench ‘A’ order in I.T. (S.S.) A.No.148/Hyd/2002, which pertained to the block period 1989-90 to 1998-99 and 01.04.1999 to 27.07.1999. The ITAT had partly allowed the appellant’s appeal only regarding the levy of surcharge under the proviso to Section 113, which could not be applied retroactively before 01.06.2002. However, the Tribunal upheld the Assessing Officer’s (AO) and CIT(Appeals)’s valuation of property at Rs.1,99,26,696/- instead of Rs.1,09,84,081/-, effectively confirming additions to the appellant’s income.
The case arose from search and seizure proceedings initiated under Section 132 of the Act at the premises of the appellant’s husband, Sri B.S. Neelakanta. During the search, cash books, ledgers, and other documents were recovered, prompting issuance of a notice under Section 158BD to the appellant. In response, the appellant declared nil undisclosed income for the block period in Form No.2B. Subsequently, notices under Sections 142(1) and 143(2) were issued, requesting explanations and supporting evidence regarding financial transactions, property investments, and rental income from Meridian school property.
The AO added a total of Rs.30,73,523/- to the appellant’s income, comprising Rs.7,75,000/- from financial transactions with Sri B. Naganna, an unaccounted investment of Rs.17,78,523/- in Meridian school property, and rental income of Rs.5,10,000/- from the same property. The appellant argued before the CIT(A) that the Rs.7,75,000/- represented payments made through a private chit fund, with monthly installments duly paid. Regarding the property investment, the appellant contended that the total payment made to the landlord was Rs.1,09,84,081/-, while the landlord’s books reflected Rs.1,99,26,696/-, allegedly including additional proposed acquisitions which did not materialize. The appellant also asserted that no cash payments were made for the school property investment, as alleged by the AO based on diary entries.
