Shri T. Ramachandra Reddy, Nellore, Nellore V. The ACIT Circle - 1, Nellore

CO 16/HYD/2011

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9848 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-08-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-07-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 21-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Difference of opinion
• Section: 143(3); 37(1); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.45/HYD/2011 ASSESSMENT YEAR 2007-2008 ACIT, CIRCLE - 1 NELLORE. VS. MR. T. RAMACHANDRA REDDY, NELLORE. PAN AAOPR-4322-C (APPELLANT) (RESPONDENT) C.O. NO. 16/HYD/2011 (IN ITA.NO.45/HYD/2011 ASSESSMENT YEAR 2007-2008) MR. T. RAMACHANDRA REDDY, NELLORE. PAN AAOPR - 4322 - C VS. ACIT, CIRCLE - 1 NELLORE. (APPELLANT) (RESPONDENT) FOR REVENUE MR. SOLGY JOSE T. KOTTARAM FOR ASSESSEE - NONE - DATE OF HEARING : 09.07.2014 DATE OF PRONOUNCEMENT : 13 .08.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), GUNTUR DATED 29.09.2010 CANCELLING THE PENALTY UNDER SECTION 271(1)(C) OF TH E I.T. ACT, 1961. THE CROSS-OBJECTION BY THE ASSESSEE IS IN SUPP ORT OF THE ORDER OF THE LD. CIT(A). WHEN THE CASE WAS POSTED FOR 2 ITA.NO.45/HYD/2011 & CO.NO.16/HYD/2011 MR. T. RAMACHANDRA REDDY, NELLORE. HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE BUT WRITTEN SUBMISSIONS WERE PLACED ON RECORD WHICH WERE CONSIDERED WHILE DECIDING THE ISSUE IN APPEAL. 2. THE FACTS IN BRIEF ARE THAT ASSESSEE IS IN THE BUSINESS OF PROPERTY DEVELOPMENT AND HAS FILED RETURN FOR A.Y. 2007-08 ADMITTING INCOME OF RS.6,05,080/-. IN THE SCRUTINY PROCEEDINGS CONDUCTED UNDER SECTION 143(3) A .O. DISALLOWED AN AMOUNT OF RS.18,00,000/- WHICH WERE C LAIMED TO HAVE BEEN PAID FOR SETTLEMENT OF DISPUTED LAND UN DER SECTION 37(1). A.O. WAS OF THE OPINION THAT THIS AM OUNT CANNOT BE ALLOWED AND ACCORDINGLY, DISALLOWED STATIN G THAT ASSESSEE NEVER FILED ANY CIVIL SUIT FOR THE LAND DIS PUTE ARISING BEFORE THE LAND GRABBING COURT NOR HAS TAKEN ANY MEASURES TO LEGALLY ENFORCE HIS CLAIM FOR THE LAND. HE WAS ALSO OF THE OPINION THAT THE EXPENDITURE CLAIMED DOE S NOT FALL IN THE PURVIEW OF CONDITIONS LAID DOWN UNDER SECTION 37(1) AND ALSO CAPITAL IN NATURE. HE ACCORDINGLY, DISALLOW ED AND ADDED THE AMOUNT TO THE INCOME RETURNED. PROCEEDINGS UNDER SECTION 271(1)(C) WERE INITIATED AND A SHOW CA USE NOTICE WAS SERVED ON THE ASSESSEE. ASSESSEE REPLIED T HAT THERE IS NO CONCEALMENT OF INCOME NOR THERE ANY ATTE MPT TO CONCEAL THE INCOME AND IT WAS ONLY A LEGALLY MADE C LAIM WHICH WAS DISALLOWED. THE CLAIM IS NOT FALSE OR BOGU S AND THE SAME WAS DULY ACCOUNTED FOR IN THE BOOKS. A.O. HOWEVER, DID NOT AGREE AND ON THE REASON OF FURNISHING INACCURATE PARTICULARS OF INCOME, LEVIED PENALTY O F RS.6,05,880/- LD. CIT(A) AFTER CONSIDERING THE SUBMIS SIONS OF THE ASSESSEE DELETED THE PENALTY BY STATING AS U NDER : 3 ITA.NO.45/HYD/2011 & CO.NO.16/HYD/2011 MR. T. RAMACHANDRA REDDY, NELLORE. 2.3. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANTS AR AND ALSO GONE THROUGH THE PENALTY OR DER AND ALSO THE ASSESSMENT ORDER. IT IS A FACT THAT TH ERE WAS A DIFFERENCE OF OPINION BETWEEN THE A.O. AND APPELL ANT AS TO THE NATURE OF THE EXPENDITURE CLAIMED BY THE APP ELLANT. FINALLY, AS SEEN FROM THE RECORDS, THE APPELLANT HA S AGREED TO THE PROPOSITION OF THE A.O. FOR DISALLOWA NCE OF THE CLAIM AND AS TRANSPIRES THE APPELLANT HAS AGREE D FOR THE AGREED ASSESSMENT ON THE GROUND NO PENALTY BE L EVIED UNDER SECTION 271(1)(C). THIS BEING THE BACK GROUND OF THE CASE THE A.O. WAS NOT JUSTIFIED IN LEVYING THE SAID PENALTY. IN ADDITION, DISALLOWANCE OF A CLAIM WOULD NOT AUTOMATICALLY LEAD TO THE CONCLUSION THAT THERE WAS A CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF APPELLANTS INCOME AS SUCH PARTICULA RS WERE PART OF THE ACCOUNTS IN THE RETURN FILED BY THE APP ELLANT. SINCE, NO COGENT MATERIAL HAS BEEN BROUGHT ON RECOR D BY THE A.O. WHILE LEVYING THE PENALTY UNDER SECTION 27 1(1)(C), THE SAME CANNOT BE SUSTAINED, MORE SO IN LIGHT OF T HE VARIOUS DECISIONS SUPPORTING THE CONTENTIONS OF THE APPELLANT. 3. AFTER CONSIDERING THE ARGUMENTS OF THE LEARNED D.R. AND PERUSING THE WRITTEN SUBMISSIONS PLACED ON RECORD BY THE ASSESSEE, WE ARE OF THE OPINION THAT THERE IS NO NEED TO DIFFER FROM THE FINDINGS OF THE LD. CIT(A). JUST BECAUSE THE AMOUNT WAS DISALLOWED IN THE ASSESSMENT, THE SAME C ANNOT BECOME CONCEALED INCOME. SINCE THE ASSESSEE HAS FUR NISHED ALL THE DETAILS, IT CANNOT BE STATED THAT ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME. HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS LTD., VS. CIT 322 ITR 158 (SC), HAD AN OCCASION TO EXAMINE THE ISSUE OF INACC URATE PARTICULARS AND HELD AS UNDER : A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF TH E PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY , THE ASSESSEE MUST HAVE FURNISHED INACCURATE 4 ITA.NO.45/HYD/2011 & CO.NO.16/HYD/2011 MR. T. RAMACHANDRA REDDY, NELLORE. PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HEL D GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORD ER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE , NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTIO N OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 4. IN VIEW OF THE PRINCIPLES LAID DOWN BY THE HONBLE SUPREME COURT, WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) WHICH IS IN TUNE WITH TH E ABOVE PRINCIPLES. THE REVENUE GROUND HAS NO MERIT AND ACCORDINGLY, DISMISSED. 5. THE CROSS OBJECTION FILED BY ASSESSEE WAS ACADEMIC IN NATURE AND WAS IN SUPPORT OF ORDER OF CIT(A ), THEREFORE, CROSS OBJECTION WAS DISMISSED. 5 ITA.NO.45/HYD/2011 & CO.NO.16/HYD/2011 MR. T. RAMACHANDRA REDDY, NELLORE. 6. IN THE RESULT, BOTH APPEAL OF THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.08.2014. SD/- SD/- (SAKTIJIT DEY) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 13 TH AUGUST, 2014 VBP/- COPY TO 1. ACIT, CIRCLE - 1, 24 - 2 - 438, GNT ROAD, DARGAMITTA, NELLORE. 2. MR. T. RAMACHANDRA REDDY, 16 - 10 - 828, SRI KRISHNA AVENUE, MUTHUKUR ROAD, NELLORE. 3. CIT(A), GUNTUR 4. CIT, GUNTUR 5. D.R. B BENCH, ITAT, HYDERABAD.