P. Devender Rao, Hyd, Hyderabad V. ACIT, Circle-6(1), Hyderabad, Hyderabad

ITA 1384/HYD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5964 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-03-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 11-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1384/HYD/2015 ASSESSMENT YEAR: 2007-08 P. DEVENDER RAO, HYDERABAD PAN AHEPP9202C VS. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 6(1), HYDERABAD. APPELLANT RESPONDENT ASSESSEE BY: SHRI T. CHAITANYA KUMAR REVENUE BY: SHRI B. KURMI NAIDU DATE OF HEARING: 07/03/2016 DATE OF PRONOUNCEMENT: 11/03/2016 O R D E R PER V. DURGA RAO, J.M.: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF CIT(A)-6, HYDERABAD DATED 18/09/2015 PERTAINING TO THE AY 2007-08. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE HAD FIL ED HIS RETURN OF INCOME ON 27/07/2010 DECLARING TOTAL INCO ME AT RS. 37,74,710/-. THEREAFTER, ASSESSMENT WAS COMPLETED B Y DETERMINING THE TOTAL INCOME AT RS. 41,17,586/- BY MAKING THE FOLLOWING ADDITIONS: 1. DIFFERENCE IN COST OF ACQUISITION OF RS. 97,742 /-. 2. UNACCOUNTED CREDIT OF RS. 2,44,734/- CREDITED T O THE CAPITAL ACCOUNT OF THE ASSESSEE 3. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASS ESSING OFFICER NOTED THAT THE CAPITAL ACCOUNT REFLECTING V ARIOUS CREDITS AND DEBITS WAS ALSO ENCLOSED WITH THE RETURN OF INC OME OF THE I.T.A. NO. 1384/HYD/2015 P. DEVENDER RAO 2 ASSESSEE. ON PERUSAL OF THE SAID CAPITAL ACCOUNT, T HE ASSESSING OFFICER OBSERVED THAT THE CAPITAL OF THE ASSESSEE HAS BEEN CREDITED WITH AN AMOUNT OF RS. 6,40,275/- ON ACCOUNT OF PROFIT EARNED BY ASSESSEE ON SALE OF AGR ICULTURAL LAND HELD BY HIM. WHEN THE ASSESSING OFFICER HAD AS KED THE ASSESSEE TO PRODUCE THE DOCUMENTS RELEVANT TO THE S ALE OF AGRICULTURAL LAND, THE ASSESSEE HAD FILED RELEVANT DOCUMENTS AND ON VERIFICATION OF THE SAME, THE ASSESSING OFFI CER FOUND THAT THE ASSESSEES SHARE OF PROFIT ON ACCOUNT OF S ALE OF AGRICULTURAL LAND WAS RS. 3,95,541/- WHEREAS THE A SSESSEE HAD SHOWN THE AMOUNT OF RS. 6,40,275/-. WHEN THE AS SESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THE DIFFERENTIAL AMOUNT OF RS. 2,44,734/- (RS. 6,40,275 RS. 3,95,541), ASSESSEE FAILED TO EXPLAIN THE SAME PROP ERLY AND, THEREFORE, THE ASSESSING OFFICER ADDED THE SAID AMO UNT OF RS. 2,44,734/- TO THE INCOME OF THE ASSESSEE AS UNACCOU NTED INCOME. THE ASSESSEE ACCEPTED THE SAME AND PAID THE TAXES ACCORDINGLY. 3.1 THEREAFTER, THE ASSESSING OFFICER INITIATED PEN ALTY PROCEEDINGS U/S 271(1)(C) ON THE GROUND THAT THE AS SESSEE HAD CONCEALED THE PARTICULARS OF HIS INCOME OR FURN ISHED THE INACCURATE PARTICULARS OF SUCH INCOME. ACCORDINGLY, ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE PENALTY U/S 271(1)(C) SHOULD NOT BE LEVIED AGAINST HIM. IN RESPONSE, THE ASSESSEE SUBMITTED THAT THE ENTIRE AMOUNT OF RS . 6,40,275/- CREDITED TO THE CAPITAL ACCOUNT IS ON AC COUNT OF SALE OF AGRICULTURAL LAND AND AS PER THE DOCUMENT THE AM OUNT RECEIVED WAS RS. 3,95,541/- AND THE REMAINING BALAN CE OF RS. 2,45,734/- WAS RECEIVED OTHER THAN THE AMOUNT MENTI ONED IN THE DOCUMENTS. HOWEVER, THE ASSESSING OFFICER HAS N OT BELIEVED THE EXPLANATION OF THE ASSESSEE AND IMPOSE D PENALTY OF RS. 1,15,279/- U/S 271(1)(C) OF THE ACT. I.T.A. NO. 1384/HYD/2015 P. DEVENDER RAO 3 4. ON APPEAL, BEFORE THE CIT(A) IT WAS SUBMITTED TH AT THE ASSESSEE HAS RECEIVED HIS SHARE OVER AND ABOVE THE MONEY MENTIONED IN THE SALE DEED AND THE ASSESSEE NEITHER CONCEALED INCOME NOR FURNISHED INACCURATE PARTICULA RS OF HIS INCOME. HOWEVER, THE CIT(A) REJECTED THE SUBMISSION S OF THE ASSESSEE AND CONFIRMED THE PENALTY LEVIED BY THE AS SESSING OFFICER. 5. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE TRIBUNAL. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL ON RECORD AS WELL AS THE ORDERS O F REVENUE AUTHORITIES. IT IS OBSERVED THAT THE ASSESSEE HAS S OLD THE AGRICULTURAL LAND AND ACCORDING TO THE SALE DEED TH E SALE PRICE IS AT RS. 3,95,541/-. HOWEVER, IN THE CAPITAL ACCOU NT, THE ASSESSEE HAS CREDITED THE AMOUNT OF RS. 6,40,275/- AND THE BALANCE AMOUNT OF RS. 2,44,734/-, ACCORDING TO THE ASSESSING OFFICER & CIT(A) IS UNACCOUNTED AMOUNT RECEIVED BY THE ASSESSEE. THEREFORE, THE SAID AMOUNT WAS ADDED TO T HE TOTAL INCOME OF THE ASSESSEE. HOWEVER, BEFORE THE CIT(A), THE ASSESSEE EXPLAINED THAT THE AMOUNT OF RS. 2,44,734/ - RECEIVED BY THE ASSESSEE IS MORE THAN THE VALUE MENTIONED IN THE SALE DEED AND THE SAME WAS OFFERED FOR TAXATION. BEFORE THE LOWER AUTHORITIES, THE ASSESSEE WAS UNABLE TO SUBSTANTIAT E THE AMOUNT RECEIVED BY HIM TOWARDS THE SALE CONSIDERATI ON OF AGRICULTURAL LAND. WE FIND THAT THE CIT(A) WITHOUT ENQUIRING THE EXPLANATION GIVEN BY THE ASSESSEE, SIMPLY CONFI RMED THE PENALTY LEVIED BY THE ASSESSING OFFICER AS THE CIT( A) HAS NOT GIVEN ANY FINDING IN RESPECT OF THE EXPLANATION OFF ERED BY ASSESSEE WHICH IS EITHER FALSE OR NOT BONAFIDE. UN DER THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT THE AMOUNT OF RS. 2,44,734/- RECEIVED OVER AND ABOV E THE I.T.A. NO. 1384/HYD/2015 P. DEVENDER RAO 4 MONEY MENTIONED IN THE SALE DEED CANNOT BE SAID THA T IT IS A CONCEALED INCOME. WHEN THE ASSESSING OFFICER DETECT ED AND ASKED TO EXPLAIN ABOUT THE SAID EXTRA AMOUNT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD OFFERED TH E SAME AS INCOME WHICH HAD NOT BEEN ORIGINALLY OFFERED WIT H A REQUEST FOR NO PENAL PROCEEDINGS TO BE INITIATED. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT IT IS NOT A FIT CASE FOR LEVY PENALTY UNDER THE PROVISIONS OF SECTION 271(1)(C) A ND ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(A) A ND CANCEL THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271 (1)(C) OF THE ACT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON 11 TH MARCH, 2016 SD/- (S. RIFAUR RAHMAN) ACCOUNTANT MEMBER SD/- (V. DURGA RAO) JUDICIAL MEMBER HYDERABAD, DATED 11 TH MARCH, 2016 KV COPY FORWARDED TO: 1. SHRI P. DEVENDER RAO, C/O T. CHAITANYA KUMAR, ADVOCATE, FLAT NO. 409, METRORESIDENCY, RAJBHAVAN ROAD, SOMAJIGUDA, HYDERABAD. 2. ACIT, CIRCLE 6(1), HYDERABAD 3. CIT(A) - 6, HYDERABAD 4 PR. CIT - 6, HYDERABAD 5 THE DR, ITAT, HYDERABAD I.T.A. NO. 1384/HYD/2015 P. DEVENDER RAO 5 S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER