Dy.CIT, Central Circle-6, Hyderabad V. Sri A.V.Guruva Reddy, Hyderabad

ITA 1119/HYD/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6169 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 03-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KURMI NAIDU
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Loose papers; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SMT. P.MADHAVI DEVI, JUDI C IAL MEMB E R AND SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.1119/HYD/14 : ASSESSMENT YEAR 2007 - 08 ITA NO.1120/HYD/14 : ASSESSM ENT YEAR 2008 - 09 DY. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 6, HYDERABAD V/S. SHRI A.V.GURUVA REDDY, HYDERABAD ( PAN - ADDPA 6981 E ) (APPELLANT) (RESPONDENT) APPELLANT BY : S HRI KURMI NAIDU DR RESPONDENT BY : SHRI S.RAMA R AO DATE OF HEARING 10 . 12 .201 5 DATE OF PRONOUNCEMENT 06.01.2016 O R D E R PER B.RAMAKOTAIAH, ACCOUNTANT MEMBER: THESE TWO APPEALS ARE FILED BY THE REVENUE AND THEY ARE DIRECTED AGAINST SEPARATE ORDERS OF THE COMMISSIONER OF INCOME - TAX(APPEAL S) I, HYDERABAD, BOTH DATED 26.3.2014 FOR THE ASSESSMENT YEARS 2007 - 08 AND 2008 - 09. 2. THE COMMON ISSUE INVOLVED IN THESE APPEALS RELATES TO PENALTIES LEVIED BY THE ASSESSING OFFICER UNDER S.271(1)(C) OF THE ACT FOR THE ASSESSMENT YEARS 2007 - 08 AND 20 08 - 09, WHICH HAVE BEEN DELETED BY THE CIT(A). IT IS TH E CON TE NTION OF THE RE VENUE THAT THE PENALTIES IMPOSED BY THE ASSESSING OFFICER ARE BASED ON THE L O OSE PAPERS S E IZED AND THE CIT(A) WAS NO T JU S TIFIED IN DELETING THE PENALTY, PARTICULARLY WHEN THE ASSE SSEE HIMSELF OF F ERED INCOME IN THE COU R SE OF SURVEY /SEARCH . 3. BRI E FLY STATED, ASSESSEE IS A RENOWNED ORTHOPEDIC SURGEON AND IS ALSO THE M A NAGING D IRECTOR OF M/S. SARVEJANA HEALTH CARE PVT. LTD. HE FIL E D THE RE T U R NS OF INCOME FOR TH E ASSESSMENT YEAR 2007 - 08 ADMITTING I TA NO . 1119 - 1120 /HYD/201 4 DR. A.V.GUR U VA REDDY HYDERABAD 2 INCOME OF R S .1,56,15,550 AND FOR TH E ASSESSMENT YEAR 2008 - 09 AND OF RS.3,08,55,184 FOR THE ASSESSMENT YEAR 2009 - 10. CONSEQUENT TO SEARCH AND S E I Z URE OP ER ATIONS CON D U C TED ON 20.08.2009 AND SUR V EY OPERATION S CONDUCTED ON THE PREMISES ABOVE COM PANY, PROCEEDINGS UN D ER S.153A W E RE INITIATED. ASSESSEE FIL E D RE V ISED RETURNS DECL A RING INCOME OF RS .2,31,62,130, THEREBY ADMITTING ADDITIONAL IN C OM E OF RS .75 LAKH S FOR THE ASSESSMENT YEAR 2007 - 08 AND OF R S .3,33,45,263 FOR THE ASSESSMENT YEAR 2008 - 0 9, THE REBY ADMITTING ADDITIONAL INCOME OF RS .25, 00,000 FOR TH AT YEAR . ASSESSMENTS WERE COMPLETED ON TOTAL I N COM E OF R S .2,12,57,442 FOR THE ASSESSMENT YEAR 2007 - 08 AND OF RS .3,38,84,018 FOR ASSESSMENT YEAR 2008 - 09, VIZ. ON INCOMES WHICH ARE LESS THAN THE INCO MES RETURNED BY THE ASSESSEE. EVEN THOUGH THE ASSESSEE ADMITTED I N COME AS DECL A RED UN DE R S .132(4), THE ASSESSING OFFICER HOW E VER IN TH E ASSESSMENT ORDER S BROUGHT THESE AMOUNTS TO TAX SEPARATELY AND INITIATED P R OCEEDIN GS UN D ER S.271(1)(C). FOR TH E ASSES SMENT YEAR 2007 - 8, AN AMOUNT OF R S .45 LAKH S WAS QUANTIFIED BY THE ASSESSING OFFICER ON THE BASIS OF CERTAIN SALE DEEDS IMPOUNDED TOWAR D S UN E XPLAIN E D INVESTMENTS IN PR O P ERTY PU R CHA S ED AT HY DE RABAD FOR ASSESSMENT YEAR 2008 - 09 AND FOR ASSESSMENT YEAR 2008 - 0 9, BAS E D ON SOME SCRIBBLING WHICH A RE NO T DATED OR CLEAR, ASSESSING OFFICER QUANTIFIED THE AMOUN TS AD V A N CED BY TH E ASSESSEE AT RS.25 LAKHS, AND ON THOSE ADDITIONS P E N ALTY UN DE R S.271(1) ( C) WAS LEVIED. 4. BEFORE THE LEARNED CIT(A), ASSESSEE EXPLAIN ED T HAT WHEN THE ASSESSEE HAS ADMITTED AN AMOUNT OF RS.75 LAKHS FOR ASSESSMENT YEAR 2007 - 08 , ONLY AN AMOUNT OF RS .45 LAKHS WAS CON S I DE RED FOR PENALTY. IT WAS ALSO EXPLAINED THAT ASSESSEE HAS INV E STED VARIOUS AMOUNTS IN THE E A R L IER YEARS FROM ASSESSMENT YEAR 20 02 - 03 TO 2005 - 06, BUT THE ASSESSING OFFICER C HOSE TO BRIN G TO TAX THE ENTIRE AMOUNT IN ASSESSMENT YEAR 2007 - 08 BASED ON CERTAIN REGISTERED DOCUM E N T S AND THERE W AS NO INV E STMENT MADE IN THIS Y E AR. IT WAS CONTENDED THAT IN ORDER TO SETTLE THE MATTER, THE AS SESSEE OFFERED THE AMOUNT TO TAX UN DE R S.132(4) A N D THE P R O V IS I ON S OF EXPLANATION 5A TO S.271(1 )( C) ARE NO T APP L I C ABLE TO TH E ASSESSEE . ASSESSEE I TA NO . 1119 - 1120 /HYD/201 4 DR. A.V.GUR U VA REDDY HYDERABAD 3 ALSO SUBMITTED THAT IN C OM E ADMITTED IN TH E COU R SE OF PROCEEDINGS UN D ER S.153A CANNOT BE THE ONLY BASIS FOR CON S I DE RING THE CONCEALMENT PENALTY, AS THESE PROCEEDINGS ARE ENTIRELY INDEPENDENT OF GENERAL ASSESSMENT PROCEEDINGS AND RELIED ON VARIOUS CASE - LAW AS DISCUSSED BY THE CIT(A) IN PARAS 5.6 AND 5.7 OF THE IMPUGNED ORDER FOR ASSESSMENT YEAR 2007 - 08. FOR ASSESS MENT YEAR 2008 - 09, IT WAS ALSO SUBMITTED THAT LOOSE PAPERS DO NOT CONTAIN ANY DATE OR ANY DETAILS AND THE T RANSACTIONS THEREIN DO NOT REFLECT ANY MONEY GIVEN OR REC E IVED BACK. IT W A S FURTHER SU B MI T TED THAT TH E RE IS NO L IN K WITH ANY O F TH E INVESTMENTS IN P R OP ER TIES OR EARNING OF INCOME BY THE ASSESSEE. HOW E VER, IN ORDER TO SETTLE THE MATTER, ASSESSEE OF F ERED THE AMOUNT TO TAX. JUST BE C AUSE AN AMOUNT W AS OFFERED TO TAX BY THE ASSESSEE , THE SAME IS NOT SUFFICIENT FOR LEVY OF PENALTY FOR CONCEALMENT. THE L EARNED CIT(A) CON S ID E RED THE SUBMISSIONS, EXAMINED THE FACTS AND D E LETED THE IMPU G NED PENALTIES FOR BOTH THE Y E ARS, STATING AS UNDER - ASSESSMENT YEAR 2007 - 08 06.0 THE ASSESSMENT ORDER, PENALTY ORDER AND THE SUBMISSIONS OF THE APPELLANT HAVE BEEN CAREFU LLY CONSIDERED. IT IS NOTED THAT IN THE ASSESSMENT ORDER, THE AO HAS MADE ADDITIONS ON ACCOUNT OF DIFFERENCE IN THE COST OF CONSTRUCTION OF RS.6,45,312 / - , UNEXPLAINED INVESTMENT IN PROPERTY OF RS .4 5,00,000 / - AND UNEXPLAINED ADVANCES RECEIVED OF RS .4 , 5 0,00 0 / - AND ISSUED THE PENALTY NOTICE U / S.271(1)(C) OF I.T. ACT. HOWEVER, WHILE PASSING THE PENALTY ORDER U / S. 271(1)(C}, HE CONSIDERED THE ADDITION OF R S.4 5,00,000 / - ONLY AND DID NOT GIVE ANY REASONS FOR EXCLUDING THE OTHER TWO ITEMS OF ADDITION AND CONCLUDE D THAT THE APPELLANT WOULD NOT HAVE OFFERED THE INCOME OF RS.45,00,000 / - BUT FOR THE SEARCH CONDUCTED BY THE DEPARTMENT. IT IS A FACT THAT THE APPELLANT OFFERED ADDITIONAL INCOME AFTER THE SEARCH WAS CARRIED OUT IN HIS PREMISES AND IT IS ALSO NOTICED FROM THE DECLARATION OF INCOME MADE BY HIM BEFORE THE ADIT(INV), UNIT - II(3), H Y DERABAD THAT HE DECLARED RS. 1 ,OO,OO,OOO / - FOR ASST. YEARS 2007 - 08 AND 2008 - 09 AS BELOW: I TA NO . 1119 - 1120 /HYD/201 4 DR. A.V.GUR U VA REDDY HYDERABAD 4 PARTICULARS ADDITIONAL DECLARATIONS ASSESSMENT YEAR INVESTMENTS IN CONSTRUCTION 25,50,000 2007 - 08 PAYMENT TOWARDS PROPERTY PURCHASED AT HYDERGUDA VILLAGE 45,00,000 2007 - 08 MISC. ADVANCES GIVEN 4,50,000 2007 - 08 ADVANCES TOWARDS PURCHASE OF PROPERTY 25,00,000 2008 - 09 TOTAL 1,00,00,000 06.1 R EGARDING THE INVESTMENT IN PROPERTY AT HYDERGUDA, IT IS NOTICE D FROM SEIZED MATERIAL NOS.22,24 & 25 OF ANNEXURE A/AVGR/RES/02 THAT HE MADE THE INVESTMENT FOR HIMSELF AND ALSO ON BEHALF OF OTHERS IN 2 PHASES AND IN THE FIRST PHASE, THE INVESTMENT WAS RS . 17 ,80,OOO/ - IN ASST. YEAR 2002 - 03; RS.88,OOO/ - IN ASST. Y EAR 2003 - 04; RS.14,60,OOO/ - IN ASST. YEAR 2004 - 05 AND RS.50,OOO/ - IN ASST. YEAR 2005 - 06 AND IN THE SECOND PHASE, THE INVESTMENT WAS RS.15,45,OOO/ - IN ASST. YEAR 2004 - 05. FROM THIS, IT IS CLEAR THAT TH E APPELLANT MADE ALL INVESTMENT DURING THE PERIOD OF ASST. YEAR 2002 - 03 TO 2005 - 06 AND NOT DURING THE RELEVANT FINANCIAL YEAR 2006 - 07. IT IS ONLY DURING THE FINANCIAL YEAR 2006 - 07 THAT THE REGISTRATION OF THE PROPERTY TOOK PLACE AND NO PART OF INVESTMENT WAS MADE DURING THIS YEAR. HOWEVER, IT IS NOTED THAT THE A O HAS RELIED ON THE SEIZED MATERIAL PAGES 60 TO 85 OF ANNEXURE - A/AVGR/RES/02 WHICH ARE ONLY SALE DEED DT.18 - 5 - 2006. EVEN IF WE CONSIDER PENALTY TO BE IMPOSED, IT HAS TO BE DONE ONLY IN THE YEAR IN WHICH THE APPELLANT HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME AND AS NOTED ABOVE, THERE WAS NO UND I SCLOSED INCOME INVESTED IN THE PROPERTY AT HYDERGUDA DURING THE YEAR UNDER CONSIDERATION. 06.2 IT HAS BEEN HELD BY VARIOUS JUDICIAL AUTHORITIES THAT SINCE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE AND DISTINCT, THE FI ND ING IN THE ASSESSMENT PROCEEDINGS CANNOT BE REGARDED AS CONCLUSIVE FOR THE ' PURPOSES OF PENALTY PROCEEDINGS AND CANNOT B E TAKEN AS - CONCLUSIVE FOR THE PURPOSE OF HOLDING ASSESSEE LIABLE FOR CONCEALMENT AND IMPOSING PENALTY U /S. 271(1)(C) OF I T, ACT, IN THE PRESENT CASE, THE APPELLANT DISCLOSED ADDITIONAL INCOME OF R S .L - CRORE FOR ASST. YEARS 2007 - 08 AND 2008 - 09 AND PAID TAXE S THEREON. IN THIS CONTEXT, I WOULD LIKE TO REFER TO THE OBSERVATIONS MADE BY THE HORR'BLE JURISDICTIONAL TRIBUNAL IN THE CASE OF SRI P.V.RAMANA REDDY V S IT O IN ITA NOS.1852 - 1857 / HYD / 2011 WHICH IS REPRODUCED AS UNDER : ' THE ASSESSING OFFICER IS REQUIRED TO SATISFY HIMSELF ABOUT THE CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME. IT GIVES DISCRETION TO THE AO TO E X ONERATE THE ASSESSEE FROM LEV Y OF PENALTY EVEN IN CASE WHERE THE ASSESSEE HAS CONCEALED THE INCOME OR FURNISH INCORRE CT PARTICULARS OF INCOME. THE E X PRESSION IN I TA NO . 1119 - 1120 /HYD/201 4 DR. A.V.GUR U VA REDDY HYDERABAD 5 SECTION 271(1)(C) READS AS FOLLOWS: 'IF THE ASSESSING OFFICER .....IS SATISFIED THAT IN PERSON.....(C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME; HE MAY DIRECT .... THAT ABOVE PROVISION SHOWS THAT THE ASSESSING OFFICER IS VESTED WITH A DISCRETIONARY POWER TO LEVY OR NOT TO LEVY ANY PENALTY IN A DESERVING CASE. IN THE CASE OF HINDUSTAN STEEL LTD. VS STATE OF ORISSA (83 ITR 26) (SE), HELD THAT PENALTY SHOULD NOT BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. THE ASSESSING OFFICER HAS TO EXERCISE HIS DISCRETION JUDICIOUSLY. IF AN ASSESSEE FILES THE REVISED RETURN THOUGH AT A LATER STAGE OR DISCLOSED TRUE INCOME, PENALTY NEED NOT BELI EV ED. NO DOUBT, MERELY OFFERING A DDITIONAL INCOME WILL NOT AUTOMATICALLY PROTECT THE ASSESSEE FROM LEVY OF PENALTY BUT IN A GIVEN CASE WHERE THE ASSESSEE'S CASE, CAME FORWARD WITH ADDITIONAL INCOME THOUGH AFTER DEDUCTION ON ACCOUNT OF THAT THE ASSESSEE WAS NOT IN A POSITION TO EXPLAIN - PR OPERLY, THE SEIZED MATERIAL AND EXPRESS REMORSE, IN HIS CONDUCT UN - HESITANTLY , THE ASSESSING OFFICER MIGHT HAVE TO E X ERCISE THE DISCRETION IN FAVOUR OF SUCH ASSESSEE AS OTHERWISE THE EXPRESSION 'MAY' IN SECTION 271(1)(C) OF THE ACT REMAINS REDUNDANT. IF I T IS TO BE UNDERSTOOD THAT IN A CASE OF ADMITTED CONCEALMENT, PENALTY IS NOT AUTOMATIC. THE DISCRETION VESTED IN THE OFFICER SHOULD BE USED NOT TO LEVY THE PENALTY. IN OUR OPINION, THE CASE BEFORE US IS MOST BEFITTING CASE TO E X ERCISE SUCH DISCRETION, PART ICULARLY THERE IS DIVERGENT OF OPINION AMONG THE LOWER AUTHORITIES AS WELL AS THE TRIBUNAL WHILE DELETING OR SUSTAINING THE ADDITION. IT SHOWS THAT THERE IS NO CONCLUSIVE PROOF THAT THE ASSESSEE CONCEALED INCOME OR FURNISHED INACCURATE PARTICULARS OF INCO ME. FURTHER AS SEEN FROM THE FACTS OF THE CASE, TO AVOID LITIGATION THE ASSESSEE A C CEPTED THE ADDITIONS OR MADE FRESH OFFER IN THE COURSE OF THE PROCEEDINGS BEFORE THE LOWER AUTHORITIES. AFTER THE AO HAD THE CLINCHING EVIDENCE OF CONCEALMENT THEN THE OFF ER MAY NOT HAVE BEEN ACCEPTED AND THE SAME SHOULD HAVE BEEN PROCEEDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE LOWER AUTHORITIES RELIED OH PROCEEDINGS BEFORE ASSESSING . OFFICER FOR LEVYING THE PENALTY. THE SAME DO NOT CONSTITUTE ADMISSION FOR TH E PURPOSE OF LEVYING PENALTY. THE ADDITION MADE ON THE BASIS OF MORE ; OR LESS ON THE OFFER MADE BY THE ASSESSEE AND THE AO NOT BROUGHT ENOUGH INCRIMINATING MATERIAL FOR CONCEALMENT AND THERE IS NO MATERIAL FOR ESTABLISHING THE CONCEALMENT INDEPENDENTLY I N THE GIVEN FACTS AND CIRCUMSTANCES OF THE PENALTY IS I TA NO . 1119 - 1120 /HYD/201 4 DR. A.V.GUR U VA REDDY HYDERABAD 6 NOT LEVIABLE AND THE SAME IS DELETED. THEREFORE, IF THERE IS A CASE WHERE THE ASSESSING OFFICER HAS CLINCHING EVIDENCE FOR CONCEALMENT OR ANY INCRIMINATING MATERIAL TO ESTABLISH CONCEALMENT INDEPEND ENTLY, THEN THERE IS NO QUESTION OF EXERCISING DISCRETION AS TO THE LEVY OF PENALTY. THE ASSESS I NG OFFICER HAS THE DISCRETION TO LEVY PENA L TY AND LEVY OF PENALTY IS NOT AUTOMATIC AND IT SHOULD NOT BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. BUT IN THE PRESENT CASE, THE APPELLANT CAME FORWARD TO OFFER ADDITIONAL INCOME ON ACCOUNT OF INVESTMENT MADE IN THE EARLIER YEARS IN THE YEAR UNDER CONSIDERATION BECAUSE HE COULD NOT RECONCILE THE PURCHASE DEED WITH THE PAYMENTS MADE IN THE PAST AND ALSO TO BUY PEA CE ONLY ON THE BASIS OF REGISTRATION OF THE SAID PROPERTY IN THIS YEAR. IF A T ALL PENALTY HAS TO BE LEVIED IN RESPECT OF THE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS, IT HAS TO BE DONE IN THE YEAR OF MAKING THE INVESTMENT A ND NOT IN T HE YEAR OF REGISTRATION OF THE PROPERTY AND OFFER OF ADMISSION OF INCOME BY THE APPELLANT. IT IS NOT IN SPIRIT OF THE EXPLANATION - 5 A OF SECTION 271(L ) (C) OF I T. ACT . MERE ADMISSION OF INCOME DOES NOT JUSTIFY PENALTY, MORE SO WHEN THE ALLEGED INVESTMENT I N THE PROPERTY WAS MADE OUT OF THE DISCLOSED/UNDISCLOSED INCOME IN THE EARLIER YEARS AND NOT 'IN THE YEAR UNDER CONSIDERATION. THEREFORE, THE PENALTY LEVIED OF RS.14,13,720/ - U/S.271(1)(C) IS NOT JUSTIFIED AND HENCE, CANCELLED. ASSESSMENT YEAR 2008 - 09 06.0 THE ASSESSMENT ORDER, PENALTY ORDER AND THE SUBMISSIONS OF THE APPELLANT HAVE BEEN CAREFULLY CONSIDERED. IT IS RIOTED THAT THE APPELLANT F I LED RETURN OF INCOME IN RESPONSE TO NOTICE U/S.153A DECLARING AN INCOME OF RS.3,33,45,263/ - WH I CH INCLUDED TH E ADDITIONAL INCOME OFFERED OF RS.25 LAKHS AND THE AO COMPLETED THE ASSESSMENT ACCEPTING THE SAME AND MADE A FURTHER ADDITION OF RS.5,38,758/ - ON ACCOUNT OF DIFFERENCE IN THE COST OF CONSTRUCTION. THE CONTENTION OF THE AO THAT BUT FOR THE SEARCH, THE APP ELLANT WOULD NOT HAVE OFFERED THE AMOUNT OF R S .25 LAKHS MAY SOUND GOOD BUT PENALTY CANNOT BE LEVIED ON SURMISES, ON CONJECTURES AND POSSIBILITIES AND UNLESS IT IS ESTABLISHED THAT THERE IS ACTUALLY CONCEALMENT OR NON - D I SCLOSURE OF THE PARTICULARS OF INCOME . PAGE NO . 19 & 20 OF SEIZED ANNE X URE - A/AVGR/RES/04 HAVE BEEN PERUSED AN D THEY ARE ONLY SOME SCRIBBL I N G I.E., GURIVI OWES BUJJI ON PAGE19 AND SOME AMOUNTS WERE SCRIBBLED ON PAGE - 20. THERE IS NO INDICATION AS TO THE DATES OF PAYMENTS OR RECEIPTS AND WHAT THE PAYMENTS WERE ABOUT. SINCE THE APPELLANT COULD NOT EXPLAIN THEM, IN ORDER TO BUY PEACE, HAD ADMITTED AS UNEXPLAINED ADVANCES AND OFFERED RS.25 LAKHS AS ADDITIONAL INCOME IN THE RETURN FILED IN RESPONSE TO NOTICE I TA NO . 1119 - 1120 /HYD/201 4 DR. A.V.GUR U VA REDDY HYDERABAD 7 ISSUED U/S.153A. THE SCRIBBLING MIGHT BE G OOD FOR MAKING ADDITION BUT NOT SUFFIC I ENT FOR LEVYING PENALTY FOR CONCEALMENT SINCE THE ASSESSMENT AND PENALTY PROCEEDINGS ARE DIST I NCT AND SEPARATE PROCEEDINGS. FOR LEVYING PENALTY, IT IS ESSENTIAL TO ESTABL I SH THAT THE APPELLANT CONCEALED THE PARTICUL ARS OF INCOME OR FILED INACCURATE PART I CULARS. ADDITION MADE OR I NCOME OFFERED TO BUY PEACE ON ACCOUNT OF SCRIBBLING WHICH CANNOT BE ATTRIBUTABLE TO ANY ASSESSMENT YEAR OR TO ANY PERSON CANNOT BE A BASIS FOR LEVY OF PENALTY. IN VIEW OF THE ABOVE, THE PENA LTY LEVIED BY THE ASSESSING OFFICER IS NOT JUSTIFIED AND ACCORDINGLY, THE SAME IS ORDERED TO BE DELETED. 5. AGGRIEVED BY THE ACTION OF THE LEARNED CIT(A) IN CANCELLING THE IMPUGNED PENALTIES FOR BOTH THE YEARS, REVENUE IS IN APPEAL BEFORE US. 6. CO N SI DE RING THE RIVAL CONTENTION S AND P E RUSING THE D E TAILS PLACED ON RECORD, WE A RE OF THE OPINION THAT T H E RE VENUE HAS NO T MADE OUT ANY STRONG CA S E FOR LEVY OF CON CE ALMENT. IN FACT, AS STATE D BY THE LEARNED CIT(A), TH E RE WAS NO EVIDENCE OF INVESTMENT IN RES PECT I VE ASSESSMENT YEARS, WHICH COULD HAVE BE E N BROU G HT TO TAX AS IN C OM E O F THE Y E AR. TH E ASSESSEE HAS AD M I T TED INCOME ON HIS OWN AND FILED THE R E TURNS IN THE COU R SE OF PROCEEDINGS UN DE R S.153A. THAT ALONE C ANNO T BE A BASIS FOR LEVY OF PENALTY, UNLESS TH ERE IS EVIDENCE OR NEXUS WITH THE CONCEALED INCOME AS STATED BY TH E CIT(A). THE AMOUNT O F RS.45 LAKH S CO N SI DE RED FOR PENALTY IN ASSESSMENT YEAR 2007 - 08 WAS NO T INV E STED IN THAT YEAR, BUT REPR E SENTS THE INVESTMENTS MADE IN ASSESSMENT YEARS 2002 - 03 TO 2005 - 06. LIKEWISE, THE E VID E NCE IN THE F ORM OF SCRIBBLING S ON ROUGH SHEETS CAN N OT B E CON S I DE RED AS PERTAINING TO ASSESSMENT YEAR 2008 - 09. I N FACT , ANY SUCH UNDATED EVIDENCE , AT THE MOST, CAN BE CON S I DE RED A S P E RTAININ G TO THE YEAR OF SEARCH, WHICH COULD HA VE BEEN B R OUGHT TO TAX IN ASSESSMENT YEAR 2010 - 11, AS TH E SEARCH TOOK PLACE ON 20 TH AUGU S T, 2009, BUT THE ASSESSING OFFICER CHOSE TO BRING TO TAX IN THE ASSESSMENT YEAR 2008 - 0 9, ON THE BASIS OF THE ADMISSION BY THE ASSESSEE UN D ER S.13 2(4) , IN VI EW OF THE SE FACTS OF THE C A S E, WE DO NO T SEE ANY REASON TO DI S TURB THE FIN D IN G S O F THE LEARNED CIT(A) FOR BOTH THE YEARS. AC C OR D INGLY, WE UPHOLD THE I TA NO . 1119 - 1120 /HYD/201 4 DR. A.V.GUR U VA REDDY HYDERABAD 8 IMPU G N E D ORD E RS OF THE LEARNED CIT(A) AND R E JECT THE G R OUNDS OF THE REVENUE. 8. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 06/01/2016 SD/ - SD/ - ( P.MADHAVI DEV I ) ( B.RAMAKOTAIAH ) JUDICIAL MEMBER ACCOUNTANT MEMBER DT/ - 6 TH JANU ARY, 2016 COPY FORWARDED TO: 1. SHRI A.V.GURUVA REDDY, NO.4C, PHASE II, ROAD NO.12, FILM NAGAR, JUBILEE HILLS, HYDERABAD 2 . 3 DY. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 6 , HYDERABAD COMMISSIONER OF INCOME - TAX(APPEALS) I, HYDERABAD 4 . C OMMISSIONER OF INCOME - TAX CENTRAL , HYDERABAD 5 . DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S