DCIT, Circle-6(1), Hyderabad V. Sri V.Ramachandra Rao, Hyderabad

ITA 1322/HYD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6413 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 27-09-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K E SUNIL BABU
• Assessee Lawyers: T CHAITANYA KUM
• Keywords: Wrong claim
• Section: 68

Judgement Text

ITA NO 1322 OF 2013 V RAMACHANDRA RAO HYDERABAD PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER & SHRI PARTHA SARATHI CHAUDHURI, JUDICIAL MEMBER ITA NO.1322/HYD/2013 (ASSESSMENT YEAR: 2007-08) DY. COMMISSIONER OF INCOME TAX, CIRCLE 6(1) 7 TH FLOOR,MASAB TANK, HYDERABAD VS. SHRI V. RAMACHANDRA RAO, 8-2-686/8/2, ROAD NO.12 BANJARA HILLS, HYDERABAD PAN: ABKPV 9548 H) (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI K. E. SUNIL BABU, DR FOR ASSESSEE : SHRI T. CHAITANYA KUM AR DATE OF HEARING : 2 7 .06.2016 DATE OF PRONOUNCEMENT : 29 .06.2016 O R D E R PER SHRI PARTHA SARATHI CHAUDHURI, J.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT (A)-V, HYDERABAD, DATED 10.07.2013 RELEVANT TO A.Y 2007-08. REVENUE RAISED THE FOLLOWING GROUNDS: (A) THE LEARNED CIT (A) ERRED BOTH IN LAW AND ON FACTS . (B) THE LEARNED CIT (A) OUGHT TO HAVE SUSTAINED THE PENALTY LEVIED U/S 271(I)(C) OF THE I.T. ACT. (C) THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED THE F ACT THAT THE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE FO R CASH LOAN WHICH WAS STATED TO BE RECEIVED FROM HUF STATUS OUT OF AGRICULTURAL OPERATIONS. (D) THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED THE F ACT THAT THE ASSESSEE HAS CREATED FICTITIOUS SOURCE FOR THE CASH LOAN RECEIVED TO SUBSTANTIATE A BOGUS CLAIM, WHICH QUITE FALLS WITHIN THE MEANING OF TERM SUBMITTING INACCURATE PARTICULARS. ITA NO 1322 OF 2013 V RAMACHANDRA RAO HYDERABAD PAGE 2 OF 4 2. THE SINGLE ISSUE TO BE ADDRESSED HEREIN WHETHER THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT SHALL BE SU STAINED. 3. BRIEF FACTS RELATING TO THE CASE ARE THAT DURING THE COURSE OF SCRUTINY PROCEEDINGS, ASSESSEE WAS ASKED TO SUBSTAN TIATE THE RECEIPT OF RS.10.00 LAKHS SHOWN IN THE RECEIPTS AND PAYMENT ACCOUNT. AS THE ASSESSEE FAILED TO FURNISH ANY EVID ENCE IN RESPECT OF THIS RECEIPTS, IT WAS HELD THAT THE RECEIPTS ARE NOTHING BUT SALE PROCEEDS OF LANDS BY THE ASSESSEE AND ACCORDINGLY T HE AMOUNT OF RS.10.00 LAKHS WAS TREATED AS UNEXPLAINED INCOME OF THE ASSESSEE U/S 68 OF THE ACT. ALSO THE ASSESSEE IN TH E SAME RECEIPTS AND PAYMENT ACCOUNT HAD SHOWN TO HAVE ADVA NCED AN AMOUNT OF RS.1.00 CRORE TO M/S KEDIA OVERSEAS LTD, FOR PURCHASE OF LAND. AS NO SOURCES WERE EXPLAINED FOR THIS PAYM ENT, THE SAME WAS TREATED AS UNEXPLAINED SOURCE OF INCOME OF THE ASSESSEE. ON APPEAL BASED ON THE REMAND REPORT OF THE AO, THE CI T (A) CONFIRMED THE FIRST ADDITION OF RS.10.00 LAKHS AND GAVE RELIEF TO THE EXTENT OF RS.20.00 LAKHS OUT OF THE AMOUNT OF R S.1.00 CRORE IN RELATION TO THE ADVANCE AMOUNT PAID TO M/S KEDIA OVERSEAS LTD. ACCORDINGLY THE AO INITIATED PENALTY PROCEEDIN GS ON THIS CONFIRMATION OF ADDITION. THE AO CONCLUDED THAT THE ASSESSEE HAS CONCEALED HIS REAL INCOME AND LEVIED PENALTY ON THE SUSTAINED ADDITION OF RS.90,00,000. THEREAFTER, IN THIS 2 ND ROUND OF PROCEEDINGS BEFORE THE LEARNED CIT (A), THE MAIN CONTENTION OF THE ASSESSEE WAS THAT THE PENALTY PROCEEDINGS WERE INITIATED BY THE AO WHICH WAS NOTHING BUT AN IMMEDIATE CONSEQUEN CE OF CONFIRMATION OF THE ADDITION BY THE FIRST APPELLATE AUTHORITY AND WITHOUT BRINGING ON RECORD HOW THE PARTICULARS OF I NCOME FURNISHED BY THE ASSESSEE IN THE RETURN OF INCOME H AD BECOME INACCURATE. ASSESSEE HOWEVER, CONTENTED THAT THE AO CONCLUDED THE PENAL PROCEEDINGS AS AN AUTOMATIC CONSEQUENCE U PON ITA NO 1322 OF 2013 V RAMACHANDRA RAO HYDERABAD PAGE 3 OF 4 CONFIRMATION OF THE ADDITION WITHOUT BRINGING ON TH E EXPLANATION OFFERED BY HIM DURING THE COURSE OF PENAL PROCEEDIN GS AND REBUTTING THE INFORMATION FILED BY HIM DURING THE C OURSE OF PENALTY PROCEEDINGS. THE LEARNED CIT (A) IN HIS ORD ER WHICH IS THE SUBJECT MATTER OF APPEAL BEFORE US AFTER CONSIDERIN G THE PENALTY ORDER, WRITTEN SUBMISSIONS AND RELIANCE PLACED ON T HE CASE LAW BY THE ASSESSEE STATED THAT THE PENALTY ORDER PASSE D WAS A CONSEQUENCE OF THE CONFIRMATION OF THE ADDITION BY THE FIRST APPELLATE AUTHORITY AND NO INDEPENDENT FINDING/FURT HER FACTS WERE BOUGHT OUT BY THE AO TO SHOW THAT THERE IS A C ASE OF CONCEALMENT OF INCOME/FURNISHING OF INACCURATE PART ICULARS OF INCOME. THE LEARNED CIT (A) FURTHER HELD THAT THE F ACT OF CONCEALMENT OR INACCURATE PARTICULARS OF INCOME NEE DS TO BE DISTINCTLY MADE OUT. IT IS NEITHER AUTOMATIC NOR NA TURAL COROLLARY OF THE ADDITION MADE OR CONFIRMED. THE FACTS ARE RE QUIRED TO BE EXAMINED AFRESH IN THE PENALTY PROCEEDINGS WITH A V IEW TO DETERMINE AS TO WHETHER THE ASSESSEE IS CAUGHT WITH IN THE MISCHIEF OF SECTION 271(1)(C). HOWEVER, IN THE INST ANT CASE, THE AO HAS NOT MADE ANY EFFORT TO EXAMINE AND DETERMINE THE CONCEALMENT OUT OF THE DETAILS FURNISHED BEFORE HIM DURING THE COURSE OF PENALTY PROCEEDINGS. ON THIS FINDING, THE LEARNED CIT (A) DELETED THE PENALTY U/S 271(1)(C) OF THE ACT. B EING AGGRIEVED, THE REVENUE IS ON FURTHER APPEAL BEFORE US. 4. THE LEARNED DR RELIED ON THE FINDINGS OF THE AO AND THE LEARNED COUNSEL FOR THE ASSESSEE PUT FORTH BEFORE T HE SUBMISSIONS AS WERE PLACED BEFORE THE CIT (A). THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE FIRS T ROUND OF ASSESSMENT PROCEEDINGS, THE ITAT HAD SET ASIDE THE QUANTUM IN THE ASSESSEES CASE BACK TO THE FILE OF THE AO FOR RECONSIDERATION. THEREFORE, IN THE PRESENT PROCEEDINGS THE ORDER OF THE AO AND ITA NO 1322 OF 2013 V RAMACHANDRA RAO HYDERABAD PAGE 4 OF 4 THAT OF THE LEARNED CIT (A) REGARDING PENALTY U/S 2 71(1)(C) OF THE ACT DOES NOT HAVE ANY BASIS TO STAND. THAT THE AR P RAYED TO SET ASIDE THE MATTER TO THE AO TO WHICH THE DR DID NOT OBJECT. 5. WE HAVE PERUSED THE CASE RECORDS, THE FACTS AND CIRCUMSTANCES IN THE CASE AND WE FIND MERIT IN THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. THAT WHEN THE QUANTUM TO BE DECIDED AFRESH BY THE AO AFTER RE-ASSESSMENT THE PRESENT APPEAL REGARDING DELETION OF PENALTY BY THE FIRST A PPELLATE AUTHORITY ON THE EARLIER QUANTUM DOES NOT HOLD ANY LEGAL VALIDITY FOR EXISTENCE. WE ACCORDINGLY SET ASIDE THE MATTER TO THE AO TO RE-DECIDE THE ISSUE AFTER FRESH ASSESSMENT. HENCE T HE MATTER IS SENT BACK TO THE FILE OF THE AO. 6. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JUNE, 2016. S D/ - S D/ - (B. RAMAKOTAIAH) (PARTHA SARATHI CHAUDHURI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 29 TH JUNE, 2016. VNODAN/SPS COPY TO: 1. DY. COMMISSIONER OF INCOME TAX, CIRCLE 6(1), 7 TH FLOOR, MASAB TANK, HYDERABAD 2. DY. COMMISSIONER OF INCOME TAX, CIRCLE 6(1) 3. CIT-(A) V HYDERABAD 4. CIT-3 HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER