M.Syed Mohammed, Krishnagiri V. ACIT, Salem

ITA 1135/CHNY/2015

• Counselvise Citation: 113521714 RSA 2015
• Duration Of Justice: 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 14-05-2015
• Court: TRIBUNAL
• Assessee Lawyers: MR A B K; B G KUPENDRA SETTY
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1135 /MDS./2015 ( !' #' / ASSESSMENT YEAR :2008-09) M SYED MOHAMMED , M/S.AMEERIA SERVICE STATION, BYE PASS ROAD, HOSUR POST, KRISHNAGIRI DIST., PIN 635 109. VS. ACIT, CIRCLE 3, NO.3 GANDHI ROAD, SALEM -7. PAN ABPPM 6275 P ( / APPELLANT ) ( / RESPONDENT ) $% & ' / APPELLANT BY : MR.B.G.KUPENDRA SETTY, C.A ()$% & ' / RESPONDENT BY : MR.A.B.KOLI,JCIT, D.R * + & ,- / DATE OF HEARING : 10.08.2015 .# & ,- /DATE OF PRONOUNCEMENT : 30.09.2015 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED B Y THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A), SALEM DA TED ITA NO.1135 /MDS/2015 2 31.03.2015 IN ITA NO.178/2011-12 PASSED UNDER SEC. 271(1)(C)READ WITH SECTION SEC. 250 OF THE ACT. 2. THE ASSESSEE HAS RAISED EIGHT ELABORATE GROUNDS IN HIS APPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE A SSESSEE IS AGGRIEVED BY THE ORDER OF THE LD. CIT (A), WHO HAD CONFIRMED THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT FOR ` 2,59,840/- BEING 100% OF TAX PAYABLE ON THE INCOME ESCAPED FROM ASSESSMENT VIZ., CASH INTRODUCED IN THE TRANSPORT BUSINESS FOR ` 5 LAKHS AND NOTIONAL RENTAL INCOME OFFERED FOR TAX FOR ` 36,000/- AND LEVY OF INTEREST U/S.234B & 234C OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF SERVICE STATION AND TRAN SPORT, FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 ON 29. 09.2008 ADMITTING TOTAL INCOME AS ` 6,82,380/-. THE CASE WAS REFERRED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED ON 143(3) OF ACT ON 30.12.2010 WHEREIN THE LD. A.O. MADE ADDITION OF ` 5,00,000/- AGAINST ITA NO.1135 /MDS/2015 3 CASH INTRODUCED IN TRANSPORT BUSINESS AND ` 36,000/- TOWARDS NOTIONAL RENT OFFERED FOR TAX. 4. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEED INGS, IT WAS NOTICED BY THE LD. ASSESSING OFFICER THAT THE ASSES SEE HAD INTRODUCED ` 5 LAKHS IN HIS TRANSPORT BUSINESS. THE LD. ASSESSI NG OFFICER HAS OBSERVED IN HIS ORDER THAT THE ASSESSEE HAS AGREED FOR THE ADDITION OF ` 5 LAKHS CASH AS WELL AS ` 25,200/- ON ACCOUNT OF NOTIONAL RATE OF ` 36,000/-ACCORDINGLY, HE MADE ADDITION OF ` 5,25,200/- AND INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. ON A PPEAL, THE LD. CIT (A) UPHELD THE ORDER OF THE LD. AO BECAUSE THE ASSE SSEE HAD AGREED FOR THE ADDITION BEFORE THE LD. AO AND NOW IT WAS N OT AN OCCASION FOR HIM TO TURN AROUND AND SAY THAT THE SOURCE WAS AVAI LABLE WITH HIM WHEN THE OFFER WAS MADE BEFORE THE LD. AO TO BUY PE ACE WITH THE DEPARTMENT. 5. BEFORE US, THE LD. A.R. SUBMITTED THAT THE ASS ESSEE HAD TRANSFERRED AN AMOUNT OF ` 5 LAKHS IN THE TRANSPORT BUSINESS AND BY MISTAKE INSTEAD OF TRANSFER IT WAS WRITTEN AS CA SH INTRODUCED. HE FURTHER SUBMITTED THAT THE AMOUNT OF ` 5 LAKHS WAS BROUGHT INTO THE ITA NO.1135 /MDS/2015 4 BUSINESS AFTER PAYING TAX ON THE SAME, HOWEVER IN ORDER TO AVOID LITIGATION HE HAD OFFERED THE SAME FOR TAXATION ALO NG WITH THE NOTIONAL RENT OF ` 36,000/-. HE THEREFORE, PLEADED THAT LEVY OF PENALT Y IN THE CASE OF THE ASSESSEE WOULD BE MISCARRIAGE OF THE JU STICE AND THE SAME MAY BE DELETED. LD DR ON THE OTHER HAND ARGUED IN SUPPORT OF THE ORDERS OF THE REVENUE. 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIALS AVAILABLE ON RECORD. IT IS APPARENT FROM THE FACTS OF THE CASE THAT THE ASSESSEE IS ENGAGED IN BUSINESS OTHER THAN TRANSPORTATION. HE IS ALSO A SENIOR CITIZEN, AGED ABOUT 70 YEARS AND I.O.C DEALER. IN THESE CIRCUMSTANCES, IN THE ORDINA RY COURSE OF BUSINESS HE WOULD HAVE DEFINITELY MADE SAVINGS MORE THAN ` 5 LAKHS WHICH HE MIGHT HAVE INTRODUCED IN HIS OTHER BUSINES S I.E., TRANSPORT BUSINESS. THE REVENUE HAS ALSO NOT MADE A CATEGORI CAL FINDING THAT ` 5/- LAKHS IS THE UNDISCLOSED INCOME OF THE ASSESSEE BY SCRUTINIZING THE ENTIRE ACCOUNTS OF THE ASSESSEE. MOREOVER, THE LD. ASSESSING OFFICER HAS ASSESSED ` 36,000 AS HIS NOTIONAL RENT INCOME. NO OTHER DETAIL IN REGARD TO THE OWNERSHIP OF THE PROPERTY O N WHICH NOTIONAL ITA NO.1135 /MDS/2015 5 INCOME IS ASSESSED IS COMING FORTH FROM THE ORDERS OF THE REVENUE. MOREOVER, FROM THE FACTS OF THE CASE IT APPEARS THA T THE ASSESSEE HAS AGREED FOR THE ADDITION IN ORDER TO AVOID PROTRACTE D LITIGATION AND UNNECESSARY CONFRONTATION WITH THE REVENUE. IN THI S SITUATION, WE ARE OF THE CONSIDERED VIEW THAT LEVY OF PENALTY IS NOT WARRANTED BECAUSE THE REVENUE HAS NOT BROUGHT OUT ANY CONCRETE FINDIN GS WITH RESPECT TO THE UNDISCLOSED INCOME OF THE ASSESSEE. THEREFOR E WE HEREBY DELETE THE PENALTY LEVIED BY THE LD. ASSESSING OFFI CER WHICH WAS CONFIRMED BY THE LD. CIT (A). WITH RESPECT TO INTE REST U/S.234B & 234C OF THE ACT, ON SEVERAL OCCASIONS WE HAVE HELD IT TO BE CONSEQUENTIAL IN NATURE, ACCORDINGLY THIS GROUND IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 30 TH SEPTEMBER, 2015 AT CHENNAI. SD/- SD/- ( . . . ) ( N.R.S.GANESAN ) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 30 TH SEPTEMBER, 2015. K S SUNDARAM. & (,/0 1 0#, /COPY TO: 1. $% /APPELLANT 2. ()$% /RESPONDENT 3. * 2, ( ) /CIT(A) 4. * 2, /CIT 5. 05 (,6! /DR 6. ' 7+ /GF