Shri Sachdeo G. Jumdamal, Kolhapur V. JtCIT,(OSD)Cent. Cir., Kolhapur

ITA 1362/PUN/2007

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56399 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-08-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 22-10-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V ANANTREYAN
• Section: 153A; 234B

Judgement Text

1 ITA NOS.1362 TO 136 5/PN/2007 SHRI SACHDEO NARESH GIRIDHAR . IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I.C.SUDHIR, JM AND SHRI D. KARUNAKARA RAO, AM ITA NO.1362 TO 1365/PN/2007 ASST. YEARS: 2001-02, 1999-2000, 2001-02 & 2002-03 SHRI SACHDEO NAARESH GIRIDHAR SHOP NO.1-2, CH.SHAHU MARKET YARD KANDA BATATA MARKET KOLHAPUR PAN ADLPS1814N APPELLANT VS. JT.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR RESPONDENT APPELLANT BY : SHRI M.K.KULKARNI, SR.ADVOCATE RESPONDENT BY : SHRI V.ANANTREYAN, DR ORDER PER D. KARUNAKARA RAO, AM THERE ARE FOUR APPEALS UNDER CONSIDERATION AND THE APPEAL WISE ADJUDICATION IS GIVEN IN THE FOLLOWING PARAGRAPHS. ITA NO.1362/PN/2007 (ASST.YEAR: 2000-01) THE PRESENT APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR DT. 17-7-2007 FOR TH E ASSESSMENT YEAR 2000-01. FOLLOWING ARE THE GROUNDS OF APPEAL RAISED BY THE A SSESSEE IN ITS APPEAL. 2 ITA NOS.1362 TO 136 5/PN/2007 SHRI SACHDEO NARESH GIRIDHAR . 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE BARDANA EXPENSES TO THE EXTENT OF RS.35,650/- AND IT BE ALLOWED ACCORDI NGLY. 2. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.1,75,000 MADE BY THE A.O. ON ACCOUNT OF FIXED DE POSIT . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LEVY OF INTEREST U/S 234A, 234B AND 234C IS NOT JUS TIFIED AS THE APPELLANT ASSESSEE DENIES HIS LIABILITY TO PAY ANY INTEREST. THE LEVY OF SUCH INTEREST BE DELETED. 2. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSES SEE MENTIONED THAT THE GROUND 3 IS CONSEQUENTIAL. FURTHER HE MENTIONED THAT THERE ARE TWO ISSUE IN THIS APPEAL FOR EFFECTIVE ADJUDICATION AND THEY ARE: (I) RELATING TO THE SUSTENANCE OF THE ADDITION OF RS.35,650/- ON AC COUNT OF BARDANA EXPENSES; AND II) CONFIRMATION OF THE ADDITION OF R S.1,75,000/- ON ACCOUNT OF UNDISCLOSED FIXED DEPOSITS. 3. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED AS UNDER. CIAT(A) CONFIRMED THE ADDITION O N FINDING THAT THE AMOUNT OF RS.35,650/- WAS DEBITED ON 5-04-2002 AND THERE IS NO BILL TO SUPPORT THE CLAIM. THUS IT IS NOT PROVED THAT THE EXPENSES PERTAIN TO THE CURRENT YEAR. THE AMOUNT THEREFORE CANNOT BE ALLOW ED. THE DISALLOWANCE OF BARDANA EXPENSES, IS RESTRICTED TO RS.35,650/-. ON PERUSAL OF THE FACTS AVAILABLE WITH US, WE FIND THAT THE ORDER OF THE CI T(A) ON THE ISSUE OF BARDANA EXPENSES DOES NOT CALL FOR ANY INTERFERENCE . ACCORDINGLY, GROUND NO.1 IS DISMISSED . 4. THE SECOND ISSUE RELATES TO THE CONFIRMATION OF THE ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN FIXED DEPOSITS . IN THE SEARCH, IT WAS FOUND THAT APPELLANT HAD INVESTED IN FIXED DEPOSITS ON 18-02-2000 TOTALING TO RS.1,75,000/-. THE APPELLANT EXPLAINED THAT THEY WERE MADE 3 ITA NOS.1362 TO 136 5/PN/2007 SHRI SACHDEO NARESH GIRIDHAR . FROM HIS OWN ACCOUNT. THE ASSESSING OFFICER WAS NO T SATISFIED WITH THE EXPLANATION THAT THE DEPOSITS WERE MADE OUT OF WITHDRAWALS FROM VARIOUS FIRMS IN THE ABSENCE OF EVIDENCE OF THE SAM E. THE ASSESSEE SUBMITTED A CHART SHOWING IN WITHDRAWALS AND INVEST MENTS INCLUDING HOUSEHOLD EXPENSES FOR THE PERIOD FROM 01-04-1997 T O 31-03-2001. IT WAS STATED THAT THE INVESTMENT IN FDS WAS COVERED B Y WITHDRAWALS. THE CIT(A) DID NOT AGREE WITH THE APPELLANT. AN OPENIN G BALANCE OF RS.1,25,370 IS SHOWN AS OPENING BALANCE AS ON 01-04 -1997. THERE IS NO EVIDENCE OF HOW THIS AMOUNT HAS BEEN DERIVED. IF T HIS AMOUNT IS EXCLUDED, THEN THE AMOUNT AT THE DISPOSAL OF THE AP PELLANT DURING THE YEAR 1999-2000 FALLS BELOW THE AMOUNT OF THE INVEST MENT IN FDS. THE AMOUNT AVAILABLE FOR INVESTMENT AFTER ADJUSTING FOR OTHER INVESTMENTS SHOWN IN THE CHART FOR THAT YEAR IS ONLY RS.52,400/ -. THIS AMOUNT IS NOT SUFFICIENT TO COVER THE FIXED DEPOSITS MADE. IT IS IMPORTANT TO NOTE THAT IN THIS YEAR, NO AMOUNT IS SHOWN FOR HOUSEHOLD EXPENSE S. IF SUCH EXPENSES IS ESTIMATED AT RS.30,000/- ( AS SHOWN IN THE NEXT YEAR ), THE INVESTIBLE FUNDS FURTHER GO DOWN TO ONLY RS.22,400/-. IN VIEW OF THE ABOVE, THE ARGUMENTS OF THE ASSESSEE THAT THE INVESTMENT INTO THE SUM OF RS.1,75,000 IS FROM THE EXPLAINED SOURCES DOES NOT MERIT ACCEPTANCE BY US. THUS, THE ADDITION OF SUM OF RS 1.75 LAKHS MADE ON ACCOUNT OF UNDISCLOSED INVESTMENT IN FIXED DEPOSITS REQUIRES T O BE CONFIRMED. THEREFORE, WE APPROVE THE DECISION OF THE CIT(A) AN D THE SAME DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE RELEVAN T OF THE ASSESSEE IS DISMISSED. 5. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 4 ITA NOS.1362 TO 136 5/PN/2007 SHRI SACHDEO NARESH GIRIDHAR . ITA NOS 1363, 1364 AND 1365/PN/2007 6. ALL THESE THREE APPEALS ARE GROUPED FOR ADJUDICA TION IN A CONSOLIDATED MANNER AND THESE APPEALS RELATE TO PEN ALTY PROCEEDINGS. THESE PENALTY RELATE TO ADDITION ON ACCOUNT OF INTE REST RECEIPTS. 7. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE REPRESENTATIVE OF THE ASSESSEE WAS ASKED DURING THE FIRST APPELLATE P ROCEEDINGS TO FURNISH THE REASONS DUE TO WHICH THE INTEREST AMOUNT WAS NOT DECLARED IN THE ORIGINAL RETURN . THE REPRESENTATIVE OF THE ASSESSEE REPLIED STATI NG THAT THE INCOME FROM INTEREST HAD BEEN OFFERED ONLY IN T HE CASE AND TO THE EXTENT THAT THE NECESSARY TDS CERTIFICATE HAD BEEN RECEIVED FROM THE BANK. THE EXPLANATION OF THE ASSESSEE WAS NOT ACCE PTED. IN THE OPINION OF THE REVENUE, THE ASSESSEE HAS TO FOLLOW AN UNIFO RM METHOD OF ACCOUNTING WITH REGARD TO A PARTICULAR SOURCE OF IN COME. IT IS NOT THE CASE OF THE ASSESSEE THAT INCOME WAS BEING OFFERED ON RE CEIPT BASIS AS FAR AS THE PARTICULAR SOURCE WAS CONCERNED. EVEN IF THE B ANK HAD CREDITED INTEREST TO THE ACCOUNT, THE INCOME WOULD NOT BE NO T INCLUDED, IF FOR ANY REASON, THE TDS CERTIFICATE HAD NOT BEEN RECEIVED B Y THE ASSESSEE. IT IS THE APPELLANTS PRIMARY OBLIGATION TO ASCERTAIN THE AMOUNT OF INCOME ACCRUED BY WAY OF INTEREST AND OBTAIN THE TDS CERTI FICATE IF NECESSARY, INSTEAD OF DOING THE OPPOSITE, I.E. DECLARING INCOM E ON THE BASIS OF TDS CERTIFICATES RECEIVED. IT IS NOT LEFT TO THE APPEL LANT TO OFFER THE INCOME ACCORDING TO ITS OWN CONVENIENCE. THE AMOUNT OF DE POSIT, THE RATE OF INTEREST ARE ALL KNOWN TO THE APPELLANT. IT IS A S IMPLE CALCULATION TO ASCERTAIN THE AMOUNT OF INTEREST THAT WOULD ACCRUE IN CASE OF BANK DEPOSITS. FURTHER, THE APPELLANT HAS NOT ALSO BEEN ABLE TO PROVE THAT THE INTEREST ACCRUED IN ONE YEAR WAS AT LEAST DECLARED IN THE SUBSEQUENT YEAR. THE EXPLANATION GIVEN BY THE APPELLANT WAS THAT THE ESCAPEMENT OF INCOME OCCURRED BY WAY OF A MISTAKE BY THE BANK/ACC OUNTANT. THE 5 ITA NOS.1362 TO 136 5/PN/2007 SHRI SACHDEO NARESH GIRIDHAR . OMISSION WAS NOT INTENTIONAL. THE EXPLANATION IS O F A VERY GENERAL NATURE. IT DOES NOT CONTAIN DETAILS OF THE NATURE OF THE MI STAKE, HOW DID IT OCCUR, WHEN WAS THE MISTAKE DISCOVERED. IT ALSO DOES NOT EXPLAIN WHY THE ACT OF DISCOVERY CONVENIENTLY HAPPENED WHEN THE RETURN IN PURSUANCE TO NOTICE U/S 153A WAS TO BE FILED. THE APPELLANT HAD STATED DURING THE ASSESSMENT PROCEEDINGS THAT THE FIXED DEPOSITS IN QUESTION WER E OLD. THIS SHOWS THAT THE INTEREST ON FIXED DEPOSITS WAS BEING OFFERED FO LLOWING THE SAME SLIP- SHOD MANNER FOR A NUMBER OF YEARS. IT IS DIFFICULT TO BELIEVE THAT THE APPELLANT WAS NOT AWARE OF SUCH MISTAKES BEING OMIT TED YEAR AFTER YEAR AND NOT TAKEN CORRECTIVE ACTION. THE EXPLANATION O FFERED BY THE APPELLANT THAT THE MISTAKES WERE INADVERTENT, THEREFORE, IS N OT SUBSTANTIATED BY FACTS. 8. IN THIS REGARD, THE LEARNED COUNSEL FOR THE ASSE SSEE FILED A COPY OF THE ORDER OF THE TRIBUNAL OF THE AGRA BENCH IN THE CASE OF ITO V. CHHAIL BEHARI (20100 129 TTJ 389, FOR THE PROPOSITION THAT THE PENALTY WHICH WAS INITIATED FOR CONCEALMENT OF INCOME CANNOT BE S USTAINED ON THE GROUND OF FURNISHING OF INACCURATE PARTICULARS. WE HAVE PERUSED THE SAME AND THE CONCLUSION OF THE SAID DECISION OF THE TRIB UNAL READS AS FOLLOWS. TRIBUNAL HAVING SET ASIDE LEVY OF PENALTY U/S 271( 1) FOR THE REASON THAT THE PENALTY WAS INITIATED FOR FILING IN ACCURATE PARTICULARS OF INCOME BUT IT WAS LEVIED FOR CONCEALMENT OF INCO ME, AND NOT ON THE GROUND THAT NO SATISFACTION WAS RECORDED IN THE ASSESSMENT ORDER, IT CANNOT BE SAID THAT THERE IS A MISTAKE AP PARENT ON RECORD IN THE ORDER OF THE TRIBUNAL EVEN ON THE BASIS OF R ETROSPECTIVE INSERTION OF SUB-S (1B) IN S.271, AS THE DIFFERENCE BETWEEN THE TWO LIMBS OF S.271(1) (C) IS NOT ERASED BY THE RETROSPE CTIVE AMENDMENT. 9. WE HAVE HEARD BOTH SIDES AND PERUSED THE MATERIA L O RECORD AS ALSO THE CITATIONS PLACED BEFORE US. CONSIDERING THE AB OVE AND ALSO FOR THE 6 ITA NOS.1362 TO 136 5/PN/2007 SHRI SACHDEO NARESH GIRIDHAR . REASON OF SMALLNESS OF THE PENALTIES INVOLVED, WE ARE OF THE OPINION T HAT IT IS NOT A CASE FOR LEVY OF PENALTY. ACCORDINGLY, ALL THE THREE APPEALS ARE ALLOWED . 10. IN THE RESULT, THERE APPEALS OF THE ASSESSEE AR E ALLOWED . S ORDER PRONOUNCED IN THE COURT ON 24-8-2011. SD/- SD/- (IC SUDHIR) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE, DATED THE 24-8-2011 *VNR COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEES AS MENTIONED IN THE CAUSE TITLE 2. JCIT (OSD), CENTRAL CIRCLE, KOLHAPUR 3. CIT (A), KOLHAPUR 4. CIT CONCERNED, 5. D.R. ITAT B BENCH, PUNE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE 7 ITA NOS.1362 TO 136 5/PN/2007 SHRI SACHDEO NARESH GIRIDHAR .