A.Jeyaraja, CHENNAI V. ITO, CHENNAI

ITA 122/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8697 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 22-01-2016
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: S SRIDHAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER ./ I.T.A.NO.122/MDS./2016 / ASSESSMENT YEAR : 2011-12 MR.A.JEYARAJA , 69,MAJESTIC COLONY, VALASRAVAKKAM, CHENNAI 600 087. VS. THE INCOME TAX OFFICER, NON CORPORTE CIRCLE 8(1), CHENNA9I 600 034. [PAN ADFPJ 9132 Q] ( / APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.S.SRIDHAR,ADVOCATE /RESPONDENT BY : MR.SHIVA SRINIVAS, JCIT DR / DATE OF HEARING : 25 - 07 - 201 6 / DATE OF PRONOUNCEMENT : 29 - 07 - 2016 / O R D E R PER D.S.SUNDER SINGH, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-9, CHENNAI DA TED 22.12.2015 FOR THE ASSESSMENT YEAR 2011-12. 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AT ` 3,48,000/-. ITA NO.122/MDS./16 :- 2 -: 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A REAL ESTATE COMMISSION AGENT. DURING THE ASSESSMENT PROCEEDINGS , THE AO FOUND THAT THE ASSESSEE HAS MADE HUGE CASH DEPOSITS IN TWO SAVINGS BANK ACCOUNTS 0F AXIS BANK, VIRUMBAKKAM BRANCH, AND TMB BANK, VALASARAVAKKAM BRANCH.THE TOTAL CASH DEPOSITS WERE ` 23,05,000/- IN AXIS BANK AND ` 14,40,000/- IN TMB. THE ASSESSEE EXPLAINED THE SOUR CE AS THE AMOUNT RECEIVED BY THE ASSESSEE FOR SETTLING THE UNAUTHORIZED OCCUPANTS OF THE PROPERTY BELONGING TO ONE SHRI RAV I RAJA. THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENTARY EVIDENCE FOR CASH DEPOSIT IN AXIS BANK TO THE EXTENT OF ` 5,65,000/- AND FOR ` 6,66,000/- IN CASE OF TMB AGGREGATING TO ` 12,31,000/-.THE ASSESSING OFFICER CALLED FOR THE EXPLANATION FROM THE ASSESSEE AND AFTER CON SIDERING THE EXPLANATION THE AO MADE THE ADDITION OF ` 12,31,000/- TO THE RETURNED INCOME AND INITIATED PENALTY PROCEEDINGS U/S 271(1) (C) FOR CONCEALMENT OF INCOME. DURING THE PENALTY PROCEEDIN GS IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED BY THE AO THE ASSESSEE SUBMITTED THE REPLY AS UNDER: THE CASH DEPOSITS OF ` 5,65,000/- IN AXIS BANK AND ` 6,60,000/- IN TMB REPRESENTS, THE AMOUNT GIVEN BY THE LAND OWNER SHRI K.RAVIRAJA FOR EVICTION OF TENANTS. AS I HAVE PRODU CED THE CONFIRMATION LETTER/AFFIDAVIT FROM POWER AGENTS OF SHRI K.RAVIRAJA FOR CASH/CHEQUE DEPOSITS, I COULD NOT PRODUCE THE S AME FROM LAND OWNER AS THE TRANSACTIONS TOOK PLACE 3 YEARS BACK, I COULD NOT TRACE THE LAND OWNER TO GET CONFIRMATION.. ITA NO.122/MDS./16 :- 3 -: THE LD. ASSESSING OFFICER WAS NOT CONVINCED WI TH THE REPLY OF ASSESSEE IMPOSED PENALTY OF ` 3,48,000/- U/S.271(1)(C) OF THE ACT. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD.CIT(A). THE ASSESSEE WAS NOT SUCCESSFUL IN THE FIRST APPELLATE PROCEEDINGS; HENCE, THE ASSESSEE IS IN APPEAL BEFORE US. 4. BEFORE US, LD.A.R ARGUED THAT OUT OF TOTAL CASH DEPOSITS, ` 23.07 LAKHS IN AXIS BANK VIRUGAMBAKKAM AND ` 14.40 LAKHS IN TAMILNADU MERCANTILE BANK, VALASRAVAKKAM THE ASSESS EE HAS FURNISHED THE CONFIRMATION AND EXPLAINED THE SOURCE, BUT COUL D NOT FURNISH THE EVIDENCES FOR THE REMAINING AMOUNT OF ` 12,31,000/-, BUT FURNISHED THE LETTER/AFFIDAVIT FROM THE POWER AGENT OF MR.K.R AVIRAJA THE LAND OWNER. THE EVIDENCES FROM THE LAND OWNER COULD NOT BE FURNISHED SINCE THE LAND OWNER COULD NOT BE TRACED AS THE TRA NSACTION TOOK PLACE 3 YEARS BACK. FURTHER HE ARGUED THAT THE TRANSACTIO N WAS GENUINE AND THE ACCEPTED ADDITION MADE BY THE AO AND DID NOT PR EFER THE APPEAL AND PLEADED FOR CANCELLING THE PENALTY. 5. ON THE OTHER HAND, LD.D.R ARGUED THAT THE ASSE SSEE HAS NOT DISCLOSED THE BANK DEPOSIT OF ONE OF THE BANK ACCOU NT IN ITS BOOKS OF ACCOUNTS. THE FACT OF UNDISCLOSED/UNEXPLAINED CASH DEPOSITS HAS COME ITA NO.122/MDS./16 :- 4 -: TO THE NOTICE OF THE REVENUE ONLY CONSEQUENT UPON M AKING ENQUIRIES BY THE AO, HAD THE AO NOT SELECTED THE CASE FOR SCR UTINY AND MADE THE ENQUIRIES THE FACT RELATING TO UNDISCLOSED CASH DEP OSIT WOULD NOT HAVE COME TO THE NOTICE OF THE DEPARTMENT. CANCELLATION OF PENALTY IN THIS CASE WOULD GIVE WRONG SIGNALS TO THE TAXPAYERS AND CONTENDED THAT THE LD.CIT(A) HAS RIGHTLY CONFIRMED THE PENALTY IMP OSED BY THE AO. 6. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAS NOT CHALLENGED THE ADD ITION MADE BY THE AO IN THE QUANTUM APPEAL AND ALSO FAILED TO FURNISH THE SOURCE OF CASH DEPOSITS WITH THE DOCUMENTARY EVIDENCES. THOUGH THE ASSESSEE SUBMITTED THE AFFIDAVIT FROM THE POWER AGENTS OF MR .K.RAVIRAJA, NO DOCUMENTS EVIDENCING THE SOURCE OF CASH WERE PLACED BEFORE THE CIT(A) OR BEFORE US. THE ASSESSEE HAS ALSO NOT DISC LOSED ONE OF THE BANK ACCOUNTS IN ITS BOOKS OF ACCOUNTS. AS THE LD.D .R HAS RIGHTLY STATED, THE FACT REGARDING THE UNEXPLAINED CASH DEP OSIT WOULD NOT COME TO THE NOTICE OF THE DEPARTMENT, UNLESS THE CA SE WAS SELECTED FOR SCRUTINY. THEREFORE THIS IS CLEAR CASE OF FURNI SHING INACCURATE PARTICULARS OF INCOME AND IS FIT CASE FOR IMPOSING PENALTY U/S.271(1)(C) OF THE ACT. ACCORDINGLY, WE CONFIRM THE ORDER OF LD .CIT(A). THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL ARE D ISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS D ISMISSED. ITA NO.122/MDS./16 :- 5 -: ORDER PRONOUNCED ON 29 TH JULY, 2016, AT CHENNAI. SD/ SD/ - (N.R.S. GANESAN) JUDICIAL MEMBER ( D.S.SUNDER SINGH ) ACCOUNTANT MEMBER !' / CHENNAI #$ / DATED: 29 TH JULY, 2016 K S SUNDARAM $%&& '(&)( / COPY TO: & 1 . / APPELLANT 3. & *&+, / CIT(A) 5. (-.& / / DR 2. / RESPONDENT 4. & * / CIT 6. .0&1 / GF