VENKATARAMESH BABU KAZA,HYDERABAD vs. DCIT., CIRCLE-12(1), HYDERABAD
आयकर अपीलीय अधिकरण, हैदराबाद पीठ
IN THE INCOME TAX APPELLATE TRIBUNAL
Hyderabad ‘A’ Bench, Hyderabad
श्री विजय पाल राि , उपाध् यक्ष एंव
श्री मंजूनाथा जी , लेखा सदस् य के समक्ष ।
BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER
आ.अपी.सं /ITA Nos.1250 & 1251/Hyd/2025
(निर्धारण वर्ा/Assessment Year:2018-19)
Shri VenkataRamesh Babu Kaza,
Hyderabad.
PAN: BILPK2802G
Vs.
Dy. Commissioner of Income
Tax, Circle 12(1),
Hyderabad.
(Appellant)
(Respondent)
निर्धाररती द्वधरध/Assessee by: Shri K. Abhiroop Bhargav, C.A.
रधजस् व द्वधरध/Revenue by: Shri TV Vamshidhar, DR
सुिवधई की तधरीख/Date of hearing: 25/09/2025
घोर्णध की तधरीख/Pronouncement: 26/09/2025
आदेश/ORDER
PER VIJAY PAL RAO, VICE PRESIDENT :
These two appeals by the assessee arising two separate orders of Learned Commissioner of Income Tax both dated 12.06.2025 passed u/s.
143(3) and penalty order passed u/s. 270A of the Income Tax Act, 1961
(“the Act”) respectively for the Assessment Year 2018-19. Since these appeals are related to the same assessee and for the same A.Y. 2016-17, they are heard together and one consolidated order is being passed for the sake of convenience and brevity.
ITA Nos.1250 & 1251/Hyd/2025 2
In the quantum appeal, the assessee has raised the following grounds of appeal :
The Learned Authorised Representative (“Ld. AR”) of the assessee submitted that the assessee in the Return of Income (“ROI”) filed for the year under consideration has declared / disclosed foreign asset in the shape of holding of shares of Bank of America Corporation. The Assessing Officer made the addition on the basis of difference in valuation of the same number of shares declared by the assessee for the Asst. Year 2017-18 and for the assessment year under consideration to the tune of Rs.96,70,802/-. The Ld. AR has submitted that the assessee challenged the assessment order by filing the appeal before the Ld. CIT(A) which was dismissed by the Ld. CIT(A) while passing the impugned order. He has pointed out that the assessment order was passed on 10.03.2021 and the appeal was filed by ITA Nos.1250 & 1251/Hyd/2025 3
the assessee before the Ld. CIT(A) on 30.09.2021 after a delay of about five months due to the reason of medical emergency in the family of the assessee during the Covid period and even the limitation time was extended by Hon'ble Supreme Court in the case of In Re Cognizance for Extension of Limitation reported in441 ITR 722. He has pointed out that the Ld. CIT(A) has declined to condone the delay despite the same was filing during in the Covid 19 pandemic period and extended by the judgement of Hon'ble Supreme Country in Suo Motu Cognizance for extension of limitation In Re : Cognizance for Extension of Limitation
(supra). Apart from dismissing the appeal on limitation, the Ld. CIT(A) has confirmed the addition made by the Assessing Officer despite the fact that the assessee has produced all the record to show that there was no new investment made by the assessee during the year and the valuation as declared by the assessee was based on the market value though there was some typographical mistakes for declaring the valuation for the Asst. Year
2017-18 which has resulted a big difference in the valuation as declared for the year under consideration. The Ld. AR has submitted that the assessee was duly explained that the typographical mistake in the value as declared in the Asst. Year 2017-18. However, ignoring all these facts supported by the evidences the Ld. CIT(A) has confirmed the addition made by the Assessing Officer. He has referred to the details of the holding of ITA Nos.1250 & 1251/Hyd/2025 4
shares as well as the submissions filed by the assessee before the authorities below. He has also referred to the Affidavit filed by the assessee explaining all the facts and submitted that the valuation for the Asst. Year
2017-18 of the shares held by the assessee in USA is in fact Rs.79,69,100/- which was mistakenly shown in the ITR as Rs.7,96,910/- because of the last one digit i.e. ‘0’ is omitted from the correct valuation, resulting a huge difference considered by the Assessing Officer in the valuation of the shares for the year under consideration in comparison to the valuation shown in the ROI for the preceding year. Thus he has submitted that once the foreign asset i.e. equity shares of Bank of America Corporation duly recorded in the Merrill Lynch account statement remains the same for the year under consideration as well as in the preceding year then even if there is a mistake in the valuation as shown in the ROI for the preceding year would not justify the addition made by the Assessing Officer and confirmed by the Ld. CIT(A). The Ld. AR further pointed that since the assessee was employed in Bank of America in USA and the shares in question were issued under the scheme of stock option to the employees and also part of his annual bonus by the Bank of America which is reported by the assessee correctly in the ROI for the year under consideration as well as in the ROI for the Asst. Year 2017-18. Though there is a difference in the valuation for the year under consideration and in the preceding year
ITA Nos.1250 & 1251/Hyd/2025 5
which is due to some typographical mistake in the Asst. Year 2017-18 and due to the market value change of the shares as on 31.12.2017. He has referred to the investors account maintained by Merrill Lynch placed at page no.90 as well as page no.96 of the paper book showing the shares as on 31.12.2016 and 29.12.2017 which remains the same without any change and therefore there is no change in the holding of the shares for the year under consideration in comparison to the earlier year, then the addition made by the Assessing Officer is contrary to the record and facts which is not sustainable. Thus he has submitted that the addition made by the Assessing Officer and sustained by the Ld. CIT(A) may be deleted.
4. On the other hand, the Learned Departmental Representative (“Ld.
DR”) has submitted that the Assessing Officer has made the addition on the basis of difference of valuation of foreign assets in the ROI, he has relied upon the orders of authorities below.
5. We have considered the rival submissions as well as the material on record. As regards the delay of five months in filing of the appeal before the Ld. CIT(A), at the outset, we note that the assessment order was passed on 10.03.2021 and the limitation for filing the appeal before the Ld. CIT(A) was to expire on 10.04.2021 which falls in the Covid 19 Pandemic and therefore in view of the Hon'ble Supreme Court judgement in Re
Cognizance for Extension of Limitation (supra), the limitation for filing the ITA Nos.1250 & 1251/Hyd/2025 6
appeal was extended upto 20.02.2022 and thereafter a further period of 90
days was allowed by the Hon'ble Supreme Court for complying the steps for filing the appeal, petition, suit, etc. Accordingly, we allow the delay of five months in filing the appeal before the Ld. CIT(A) by holding that the appeal filed by the assessee on 30.09.2021 was within the period of limitation as extended by the Hon'ble Supreme Court.
6. On the merits of addition, we find that the Assessing Officer has made addition only on the basis of difference of valuation of shares held by the assessee and reported in the ROI for the year under consideration as well as in the ROI for the Asst. Year 2017-18. The Assessing Officer has taken differential value of Rs.96,70,802/- as stated in para 4 of assessment order, which is as under :
“ 4. Inspite of several notices as above issued, assessee has not filed submission. Assessee has shown investment in foreign asset
Rs.1,04,67,712/- in A.Y. 2018-19 and has shown investment in foreign asset Rs.7,96,910/- for A.Y. 2017-18. There is a difference of amount of Rs.96,70,802/- (Rs.1,04,67,712/- less Rs.7,96,910/-) as investment in A.Y. 2018-19 in comparison to A.Y. 2017-18. Assessee has not explained the source of the investment of Rs.96,70,802/-.”
The Ld. CIT(A) has confirmed the said addition while passing the impugned order. We find from the details filed by the assessee as well as the reply vide acknowledgement dated 20.04.2024 that the assessee
ITA Nos.1250 & 1251/Hyd/2025 7
brought all the relevant facts before the Ld. CIT(A) and also explained typographical mistake in showing the valuation of the shares in the ROI for the ay 2017-18 at Rs.7,96,910/- instead of Rs.79,69,100/-. Therefore due to the omission of one last digit being ‘0’, the valuation was shown at Rs.7,96,910/- instead of Rs.79,69,100/- which is considered by the Assessing Officer for making addition in question. We further note that in the D-mat / Investor account maintained with Merrill Lynch, the details of the shares held by the assessee as on 30.12.2016 and as on 29.12.2017
under page Nos.90 & 96 as under :
ITA Nos.1250 & 1251/Hyd/2025 8
From these details, it is clear that there is no change in the number of shares as on 30.12.2016 relevant to the Asst. Year 2017-18 and as on 29.12.2017 relevant to the assessment year under consideration. Even the date of acquisition and number of shares as given in the assessee’s investment account remains same without any change which shows that there is no fresh acquisition of shares or allotment of shares to the assessee during the year under consideration and therefore even if there is a change in the valuation of shares in the year under consideration without any investment or acquisition due to the market price of the shares, the same cannot be a reason for making addition on account of foreign asset. Accordingly, in the facts and circumstances of the case, we find that there is no investment made by the assessee during the year and whatever number
ITA Nos.1250 & 1251/Hyd/2025 9
of shares held by the assessee for the preceding year remain in the account of the assessee for the year under consideration. Hence, the addition made by the Assessing Officer is not sustainable and liable to be deleted. We order accordingly.
8. In ITA No.1251/Hyd/2025, the Assessing Officer has levied u/s. 270A of the Act, the assessee has raised the following grounds :
We have heard the Ld. AR as well as Ld. DR and considered the relevant material record. The penalty order was passed by the Assessing Officer u/s. 270A of the Act on 15.02.2022 and the appeal was filed before the Ld. CIT(A) on 30.10.2022. Therefore, there was a delay in filing the appeal before the Ld. CIT(A) which was not condoned by the Ld. CIT(A) while passing the impugned order. 10. We have heard the Ld. AR as well as the Ld. DR on the condonation of delay and also perused the contents of the Affidavit filed by the assessee
ITA Nos.1250 & 1251/Hyd/2025 10
before the Ld. CIT(A) giving the reason of health issues in the family of the assessee due to Covid 19 Pandemic. Accordingly, considering the reasons explained by the assessee as well as facts and circumstances of the case, the delay of 7 months in filing the appeal before the Ld. CIT(A) is condoned.
11. On merits of the penalty levied u/s. 270A of the Act, once the addition itself is deleted by us in the quantum appeal, the penalty would not survive. Accordingly, in view of our order in the quatum appeal, the penalty levied u/s. 270A of the Act is liable to be deleted. We order accordingly.
12. In the result, both the appeals of assessee are allowed.
Order pronounced in the open Court on 26th Sept., 2025. (MANJUNATHA G) (VIJAY PAL RAO)
ACCOUNTANT MEMBER VICE PRESIDENT
Hyderabad.
Dated: 26.10.2025. * Reddy gp
Copy of the Order forwarded to :
Shri VenkataRamesh Babu Kaza, Villa 83, Aparna Hills Park, Boulevard, Chandanagar, Hyderabad-500046 2. The DCIT, Circle 12(1), Hyderabad. 3. Pr.CIT, Hyderabad. 4. DR, ITAT, Hyderabad. 5. Guard file.
BY ORDER,