R.Saravanakumar, CHENNAI V. ITO, CHENNAI

ITA 1357/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8063 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 02-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: G BASKAR
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . . . , . , % BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NOS.1356 & 1357/MDS/2015 ( / ASSESSMENT YEAR: 2008-09) 1. MR. R.SRINIVASAN (PAN: AGFPR0727C) 2. MR.R.SARAVANAKUMAR (PAN: AGFPR0728P) SARAVANA ILLAM, 20, NRN COLONY, THIRUMANGALAM ROAD,VILLIVAKKAM CHENNAI-600 049. VS INCOME TAX OFFICER, BUSINESS WARD-XIV(2), CHENNAI-34. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. G.BASKAR, ADVOCATE /RESPONDENT BY : MR. P.RADHAKRISHNAN, JCIT /DATE OF HEARING : 19 TH NOVEMBER, 2015 /DATE OF PRONOUNCEMENT : 29 TH JANUARY, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM: THESE TWO APPEALS ARE FILED BY THE ABOVE TWO ASSESSEES AGGRIEVED BY THE SEPARATE ORDERS OF THE LD.CIT(A)-12, CHENNAI BOTH DATED 16.03.2015 IN IT A NOS.174 & 175/CIT(A)-12/2013-14 PASSED UNDER SECTI ON 271(1)(C) OF THE ACT. THE ONLY ISSUE RAISED BY THE ASSESSEES IN BOTH THESE APPEALS IS THAT COMMISSIONER OF INCOM E TAX (APPEALS) HAS ERRED IN CONFIRMING THE PENALTY LEVIE D BY THE LEARNED ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT. SINCE THE ISSUE INVOLVED IN THESE TWO APPEALS IS CO MMON, 2 ITA NOS. 1356 & 1357 /MDS/2015 BOTH THE APPEALS ARE DISPOSED OF BY THIS COMMON ORD ER FOR THE SAKE OF CONVENIENCE. 2. BRIEF FACTS OF THE CASE ARE THAT BOTH THESE ASSESSEES ARE BROTHERS WHO FILED THEIR RETURNS OF INCOME ON 10.09 .2008 ADMITTING INCOME OF RS.1,98,800/- AND RS.1,99,520/- RESPECTIVELY AND ASSESSMENTS WERE COMPLETED UNDER SECTION 143(3) OF THE ACT ON 09.12.2010. THE ASSESSEE BROT HERS SOLD THEIR JOINTLY OWNED HOUSE PROPERTY AT 29, NRN COLON Y, VILLIVAKKAM, CHENNAI FOR RS.37,40,000/- VIDE SALE D EED DATED 21.11.2007 BUT IN THE RETURNS OF INCOME THEY DID NO T DISCLOSED THE SAME FOR THE PURPOSE OF CAPITAL GAINS . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, BOTH THE ASSE SSEES CLAIMED EXPENDITURE INCURRED TOWARDS IMPROVEMENT OF THE SAID HOUSE PROPERTY. THE ASSESSING OFFICER CALLED U PON THE ASSESSEES TO PRODUCE EVIDENCE IN SUPPORT OF THEIR C LAIM OF EXPENDITURE. SINCE THE ASSESSEES FAILED TO PRODUCE ANY EVIDENCE/DETAILS OF EXPENDITURE, THE ASSESSING OFFI CER DISALLOWED THE EXPENSES AND INITIATED PENALTY PROCE EDINGS UNDER SECTION 271(1)(C) OF THE ACT AS THERE WAS CON CEALMENT OF PARTICULARS OF INCOME IN THEIR RETURNS. SUBSEQUE NTLY PENALTY 3 ITA NOS. 1356 & 1357 /MDS/2015 WAS LEVIED. AGGRIEVED BY THE ORDER OF LEARNED ASSE SSING OFFICER, BOTH THE ASSESSEES PREFERRED APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). ON AP PEAL, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFIC ER AGAINST WHICH BOTH THE ASSESSEES ARE IN APPEAL BEFORE US. 3. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE HOUSE PROPERTY BUILDING WAS 27 Y EARS OLD AND IN ORDER TO MARKET THE SAME REPAIRS AND MAINTEN ANCE HAD TO BE CARRIED OUT ON THE BUILDING. THIS ISSUE W AS NOT DISPUTED BY THE LEARNED ASSESSING OFFICER. HOWEVER THE LEARNED ASSESSING OFFICER HAD SIMPLY DISALLOWED THE EXPENDITURE BECAUSE THE ASSESSEE WAS NOT ABLE TO PR ODUCE EVIDENCE FOR THE EXPENDITURE INCURRED FOR MAINTAINI NG THE BUILDING. SINCE THE BUILDING WAS REPAIRED BY ENGAGI NG LABORERS AND PETTY CONTRACTORS FROM THE LOCAL MARKE T, THEY WERE NOT ABLE TO PROCURE VOUCHERS FROM THEM, SINCE IT IS AN UNORGANIZED SECTOR. THEREFORE IT WAS SUBMITTED THAT THOUGH ADDITION IS SUSTAINED IT WOULD NOT BE AN APPROPRIAT E CASE FOR LEVY OF PENALTY. 4 ITA NOS. 1356 & 1357 /MDS/2015 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND VEHEMENTLY ARGUED IN SUPPORT OF THE ORDERS OF THE REVENUE AND PLEADED THAT THE SAME MAY BE CONFIRMED. 5. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS O F THE CASE, IT IS APPARENT THAT THE CONDITION OF THE BUILDING W AS NOT DISPUTED BY THE REVENUE. THE LEARNED ASSESSING OFFI CER HAD SIMPLY DISALLOWED THE EXPENDITURE FOR THE ONLY REAS ON THAT THE ASSESSEE HAS NOT PRODUCED THE BILLS AND VOUCHERS FO R INCURRING EXPENDITURE ON THE REPAIR OF THE BUILDING . FURTHER REPAIR WORKS CARRIED OUT ON THE BUILDING BY ENGAGIN G LOCAL LABORERS AND PETTY CONTRACTORS FALLS UNDER UNORGAN IZED BUSINESS SECTOR AND SOMETIMES IT BECOMES DIFFICULT TO OBTAIN PROPER BILLS AND VOUCHERS FROM THEM. IN THESE CIRCU MSTANCES, WE ARE OF THE CONSIDERED VIEW THAT LEVY OF PENALTY UNDER SECTION 271(1)(C) WOULD NOT BE APPROPRIATE IN THE C ASE OF THE ASSESSEES THOUGH ADDITIONS MAY SUSTAINABLE. THE REV ENUE HAS ALSO MADE ONLY A MERE STATEMENT IN THEIR ORDER BY STATING THAT THE SOURCE AND DETAILS OF EXPENDITURE WERE ABS ENT WITHOUT MAKING ANY FURTHER INVESTIGATION. WE FURTHE R PLACED 5 ITA NOS. 1356 & 1357 /MDS/2015 RELIANCE IN THE CASE CIT VS. RELIANCE PETRO PRODUCT S PVT. LTD. ( 323 ITR 158) CITED BY THE ASSESSEE, WHEREIN IT WA S HELD THAT MERE DISALLOWANCE ON THE CLAIM OF CERTAIN DEDU CTIONS PENALTY CANNOT BE LEVIED WHILE ARRIVING AT THE ABOV E DECISION. FOR THE ABOVE STATED REASONS WE HEREBY DIRECT THE L EARNED ASSESSING OFFICER TO DELETE THE PENALTY IN THE CAS E OF BOTH THE ASSESSES. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JANUARY, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 29 TH JANUARY, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF .