Lift attachment of Gautami’s bank accounts if she pays 25% of capital gains tax demand, HC directs I-T dept

Also stays the assessment order on condition that the part payment must be made within four weeks

The Madras High Court has directed Income Tax (I-T) department to lift its order attaching six bank accounts of actor Tadimalla Gautami after she pays 25% of the capital gains tax demand. The court also stayed the operation of an assessment order on condition that the part payment must be made within four weeks.

Justice M. Dhandapani passed the interim order following a writ petition filed by the actor contending that she had sold an agricultural property at Kottaiyur village in Sriperumbudur Taluk for ₹4.10 crore in 2016 and that such lands would not fall within the ambit of the term ‘capital asset’ as defined under the I-T Act of 1961.

She contended that the sale made by her would neither attract capital gains tax nor warrant disclosure in the return of income for the assessment year 2016-17. She also said that the property got sold for only ₹4.10 crore, and not ₹11.17 crore as claimed by the department, because it was embroiled in many disputes.

Ms. Gautami said, she had admitted an income of ₹34.88 lakh for the assessment year 2016-17 and paid 9.14 lakh towards tax along with interest. While filing the returns, her tax consultant gave his e-mail address for official communication. However, after his death due to COVID-19, she began giving her e-mail ID from 2020-21.

In the meantime, she also shifted her residence from Eldams Road at Alwarpet to Neelankarai in Chennai. After about five years of lull, suddenly on September 26, 2021 she was informed of a letter having been received in her name at Alwarpet from the National Faceless Assessment Centre in Delhi.

She collected the letter to find that an assessment order had ben passed by assuming the sale consideration to be ₹11.17 crore. “This is baseless,” the actor stated in her affidavit and questioned the authorities for having computed tax for a capital gain of ₹6.77 crore by doing reverse working with sale consideration and cost inflation index.

Though the assessment order had reference to certain previous communications sent through e-mail, the actor said those appeared to have been sent to her tax consultant who was no more. If those communications had been sent to her, she was confident of convincing the authorities that her property was not a capital asset.