Dr. T. Ramesh, Warangal V. DCIT, Central Circle-6, Hyderabad

ITA 1342/HYD/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7126 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 20-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K E SUNIL BABU
• Assessee Lawyers: K V CHALAMAIAH
• Keywords: Unexplained investment
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, A.M. & SMT. ASHA VIJAYARAGHAVAN, J.M. ITA NO. 1342/HYD/2011 ASSESSMENT YEAR 2007-08 DR. T. RAMESH, KALKAJI COLONY, HANAMKONDA (PAN ABAPT0902D) VS THE DCIT , CENTRAL CIRCLE (6), HYDERABAD APPELLANT RESPONDENT APPELLANT BY : SHRI K.V. CHALAMAIAH RESPONDENT BY : SHRI K.E. SUNIL BABU DATE OF HEARING : 17.11.2011 DATE OF PRONOUNCEMENT : 22.11.2011 ORDER PER ASHA VIJAYARAGHAVAN, JM: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) I, HYDERABA D DATED 29.4.2011 AND PERTAINS TO THE ASSESSMENT YEAR 2007- 08. 2. THE ASSESSEE IS A RADIOLOGIST BY PROFESSION. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION W AS FILED ON 1.11.2007 DECLARING A NET INCOME BY PROFESSION O F RS.4,94,240/-. IN THE COURSE OF THE SCRUTINY ASSES SMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE A SSESSEE HAD NOT DISCLOSED 3 BANK ACCOUNTS HELD IN AXIS BANK LTD. IT WAS FOUND THAT THE ASSESSEE HAD MADE HUGE CASH DEPOSITS WHICH WERE UTILISED FOR INVESTMENTS IN MUT UAL FUNDS AND SAHASRA EDUCATIONAL SOCIETY WHEREIN THE ASSESSEE WAS A MEMBER OF THE GOVERNING BODY. ON PE RUSAL OF THE BANK ACCOUNT STATEMENTS IN AXIS BANK IT WAS FOUND ITA NO.1342/HYD/2011 SHRI T. RAMESH, HANAMKONDA 2 OUT THAT THE TOTAL CREDITS IN THE ACCOUNT WAS RS.73 ,37,474/- AND THE PEAK INVESTMENT WORKED OUT TO RS.31,94,000/ -. A SURVEY U/S 133A WAS CARRIED OUT IN THE BUSINESS PRE MISES OF THE ASSESSEE BY THE ASSESSING OFFICER AND DURING THE COURSE OF SURVEY A STATEMENT WAS RECORDED FROM THE ASSESSEE WHEREIN HE WAS ASKED TO EXPLAIN THE SOURCE OF DEPOSITS OF RS.73,37,474/- DEPOSITED IN THE SAID BA NK ACCOUNT. THE ASSESSEE SUBMITTED THAT ALL THE DEPOS ITS IN THE SAID BANK ACCOUNT WERE HIS PROCESSIONAL RECEIPT S WHICH WERE OFFERED AS ADDITIONAL INCOME. THE ASSESSING O FFICER MADE AN ADDITION OF RS.31,94,000/- AS UNEXPLAINED INVESTMENT OF THE ASSESSEE AND INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE INCOME TAX ACT, 19 61. 3. IN REPLY TO THE PENALTY PROCEEDINGS, THE ASSESS EE FILED WRITTEN SUBMISSION STATING THAT THE INCOME WAS DECL ARED VOLUNTARILY WITH A VIEW TO AVOID LITIGATION AND TO COOPERATE WITH THE DEPARTMENT. SINCE NO INCRIMINATING MATERI AL WAS FOUND THE ASSESSEE CANNOT BE FOUND GUILTY OF CONCEA LMENT OF ANY INCOME. THE ASSESSING OFFICER WAS NOT CONVINCE D WITH THE SUBMISSIONS OF THE ASSESSEE AND IMPOSED PENALTY AT RS.10,85,126/- FOR THE ASSESSMENT YEAR 2007-08. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEF ORE THE CIT(A) AND REITERATED THE SUBMISSIONS MADE BEFORE T HE ASSESSING OFFICER. 5. THE CIT(A) HELD THAT ON PERUSAL OF THE RECORDS IT INDICATES THAT OFFER OF ADDITIONAL INCOME BY THE AS SESSEE WAS NOT REALLY VOLUNTARY, BUT ONLY SUBSEQUENT TO INVESTIGATION CARRIED OUT BY THE DEPARTMENT. ON TH E BASIS OF THE INFORMATION COLLECTED BY THE ASSESSING OFFIC ER FROM ITA NO.1342/HYD/2011 SHRI T. RAMESH, HANAMKONDA 3 THE CORPORATE OFFICE OF THE AXIS BANK, MUMBAI, IT W AS FOUND THAT THE ASSESSEE HAD A TOTAL CREDITS IN HIS ACCOUNT TO THE TUNE OF RS.73,37,474/-. THE ASSESSEE HAD NOT S HOWN HIS ACCOUNT IN AXIS BANK AND THE DEPARTMENT HAD THE INFORMATION OBTAINED FROM OUTSIDE AGENCY CONFRONTED THE ASSESSEE. THEREFORE THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER IN INVOKING THE PROVISIONS OF SEC TION 271(1)(C) 6. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI K.V. CHALAMAI AH SUBMITTED THAT THE CIT(A) OUGHT TO HAVE CONSIDERED THAT PROVISION S OF EXPLANATION 1 TO SECTION 271(1)(C) OF THE IT ACT 19 61 ARE NOT APPLICABLE TO THE FACTS OF THE ASSESSEES C ASE SINCE DECLARATION MADE DURING THE COURSE OF SURVEY IN GOOD FAITH WITH A VIEW TO COOPERATE AND BUY PEACE WITH THE DEPARTMENT(WITHOUT THERE BEING ANY INCRIMINATING MATERIAL HAVING BEEN FOUND) HAD BEEN ACCEPTED BY THE ASSESSING OFFICER AT THE TIME OF MAKING ASSESSMENT. 7. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER RE LIED ON THE JUDGEMENT OF THIS TRIBUNAL IN THE CASE OF AVR P RASAD VS. ITO (99 TTJ (HYD.) 920). THE LEARNED COUNSEL A LSO RELIED ON THE DECISION IN THE CASE OF CIT VS. SURESH CHAND RA MITTAL (2000) 241 ITR 124(MP) AND THE DECISION OF T HE APEX COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (2001) (251 ITR 9) (SC). ITA NO.1342/HYD/2011 SHRI T. RAMESH, HANAMKONDA 4 8. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE CIT(A) AN D STRESSED THAT THERE IS NO ASPECT OF VOLUNTARY ADMISSION OF A DDITIONAL INCOME BY THE ASSESSEE AS THE ASSESSEE HAD DISCLOSE D INVESTMENT TO THE DEPARTMENT ONLY ON BEING POINTED OUT DURING THE COURSE OF SURVEY. 9. WE HEARD BOTH THE PARTIES. WE FIND NO MERIT IN THE VERSION OF THE ASSESSEE. BASED ON THE INFORMATION GATHERED BY THE DEPARTMENT FROM OUTSIDE AGENCIES THAT THE AS SESSEE HAS INVESTED HUGE AMOUNTS IN MUTUAL FUNDS, BANK ACCOUNTS OF THE ASSESSEE WERE GATHERED. THE ASSESS EE HAD DECLARED IN THE BALANCE SHEET FILED ALONG WITH THE RETURNS, HAD SHOWN ONLY THE BANK ACCOUNTS WITH THE SYNDICATE BANK AND ICICI BANK, WHEREAS THE BANK ACCOUNT OF THE ASS ESSEE MAINTAINED WITH AXIS BANK WAS NOT DISCLOSED BY HIM IN HIS RETURN OF INCOME. ONLY ON BEING CONFRONTED WITH AL L THE INFORMATION DURING THE COURSE OF SURVEY, THE ASSESS EE CAME OUT AND ADMITTED ADDITIONAL INCOME. THE UNDISCLOSE D INCOME MADE BY THE ASSESSEE SPAN OVER A PERIOD OF 3 YEARS I.E. FINANCIAL YEARS 2006-07 AND 2008-08 OF WHICH T HE PEAK INVESTMENT WAS ARRIVED BY THE ASSESSING OFFICER AT RS.31.94 LAKHS FOR THE ASSESSMENT YEAR 2007-08. WE ARE OF THE OPINION THAT THE ASSESSEE HAS NOT MADE A VOLUNT ARY DECLARATION AS THE ASSESSEE CAME FORWARD ONLY WHEN HE WAS CONFRONTED AT THE TIME OF SURVEY TO OFFER ADDITIONA L INCOME. THE INFORMATION ABOUT THE DEPOSITS IN THE BANK ACCO UNT OF AXIS BANK WAS GATHERED BY THE DEPARTMENT FROM OUTSI DE AGENCY AND ONLY ON POINTING IT OUT TO THE ASSESSEE, HE CAME FORWARD WITH THE OFFER OF ADDITIONAL INCOME AND HEN CE PROVISIONS OF SECTION 271(1) (C) OF THE ACT IS CLEA RLY ATTRACTED. ITA NO.1342/HYD/2011 SHRI T. RAMESH, HANAMKONDA 5 10. FURTHER, THE CASE LAW RELIED BY THE ASSESSEE A RE DIFFERENT FROM FACTS OF THE CASE BEFORE US. THEREF ORE, WE CONFIRM THE ORDER OF THE CIT(A) WITH RESPECT TO THE LEVY OF PENALTY OF RS.10,85,126/- AND DISMISS THE APPEAL OF THE ASSESSEE. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAN DS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 22.11.2011 SD/- SD/- (CHANDRA POOJARI) ( (ASHA VIJAYA RAGHAVAN) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED THE 22 ND NOV. 2011 COPY FORWARDED TO: 1. SHRI.T. RAMESH, 6-2-59, KAKAJIO COLONY, HANAMKONDA, WARANGAL 2. THE DCIT, CENTRAL CIRCLE 6, HYDERABAD 3. THE CIT(A)- I, HYDERABAD 4. THE CIT, HYDERABAD 5. THE DR, ITAT, HYDERABAD NP/