Rajaram Seshadri, CHENNAI V. ITO, Vellore

ITA 1435/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7865 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 23-05-2016
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: R KUMAR
• Keywords: Gift; Salary income

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI . . . , !'. . # $ % , ' () BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.1435/MDS/2016 * +* /ASSESSMENT YEAR: 2011-12 SHRI RAJARAM SESHADRI, NO.123, CHINNAKADAI STREET, TIRUVANNAMALAI 606 601. VS. THE INCOME TAX OFFICER, WARD-1(6), VELLORE. [PAN: BRFPS 2796 J ] ( ,- /APPELLANT) ( ./,- /RESPONDENT) ,- 0 1 / APPELLANT BY : MR.R.KUMAR, ADV. ./,- 0 1 /RESPONDENT BY : MR.SHIVA SRINIVAS, JCIT # 0 2' /DATE OF HEARING : 09.01.2017 34+ 0 2' /DATE OF PRONOUNCEMENT : 31.01.2017 / O R D E R PER D.S.SUNDER SINGH , ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER DATED 24.02.2016 OF COMMISSIONER OF INCOME TAX (APPEALS) -13, CHENNAI, IN ITA NO.248/CIT(A)-13/2011-12 FOR THE AY 2011-12. 2.0 ALL THE GROUNDS OF APPEAL ARE RELATED TO THE LEVY OF PENALTY U/S 271(1)(C) OF INCOME TAX ACT. THE ASSESSEE FILED THE RETURN OF INCOME ITA NO.1435/MDS/2016 :- 2 -: DECLARING TOTAL INCOME OF RS.1,98,660/- ON 10.01.20 12, THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLE TED ON TOTAL INCOME OF RS.10,73,660/-. DURING THE ASSESSMENT PROCEEDIN GS, THE AO FOUND THE CREDIT OF RS.8,75,000/- IN HIS SAVINGS BANK A/C AND THE ASSESSEE EXPLAINED THE SOURCE AS GIFT FROM HIS FATHER SHRI RAJA RAM. THE ASSESSEE FILED COPY OF SALE DEED AS EVIDENCE FOR THE SOURCE OF THE GIFT. THE AO VERIFIED THE BANK ACCOUNT AND CASH FLOW STATEMENT AND DID NOT ACCEPT THE INITIAL CASH DEPOSIT OF RS.8,75,000/- AND MADE ADDI TION U/S.68 OF THE INCOME TAX ACT. PENALTY PROCEEDINGS U/S.271(1)(C) O F THE ACT WAS ALSO INITIATED BY THE A.O. THE AO ISSUED SHOW CAUSE NOT ICE TO THE ASSESSEE FOR LEVY OF PENALTY U/S 271(1)(C) AND THE ASSESSEE SUBMITTED HIS EXPLANATION BEFORE THE AO, BUT NOT BEING SATISFIED WITH THE EXPLANATION OFFERED BY THE ASSESSEE, THE AO IMPOSED PENALTY OF RS.3.00 LAKHS ON THE SAID INCOME OF RS.8,75,000/. THE ASSESSEE WENT ON APPEAL BEFORE THE LD.CIT(A) AND THE LD.CIT(A) CONFIRMED THE PENALTY I MPOSED BY THE AO. HAVING AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL. 3.0 APPEARING FOR THE ASSESSEE MR.R.KUMAR, ADVOCATE SU BMITTED THAT THE ASSESSEE IS A LECTURER IN ENGINEERING COLLEGE H AVING NO OTHER SOURCE OF INCOME EXCEPT THE SALARY. DURING THE PREVIOUS Y EAR RELEVANT TO THE AY, THERE WERE CASH DEPOSITS IN THE SAVINGS BANK A/C OF THE ASSESSEE, THE SOURCE WAS EXPLAINED BY THE ASSESSEE AS GIFT FROM H IS FATHER WHICH WAS RECEIVED FROM THE SALE OF LAND. THE ASSESSEE ALSO FURNISHED A COPY OF SALE ITA NO.1435/MDS/2016 :- 3 -: DEED AS EVIDENCE FOR SALE OF LAND TO EXPLAIN THE SO URCE. THE LD.AR, FURTHER, SUBMITTED THAT THE AO DIRECTED THE ASSESSE E TO PRODUCE HIS FATHER TO DEPOSE THE EVIDENCE BUT THE ASSESSEE COULD NOT P RODUCE HIS FATHER BEFORE THE AO DUE TO HIS OLD-AGE AND ACCEPTED THE A DDITION TO AVOID PHYSICAL INCONVENIENCE TO HIS FATHER AND TO AVOID P ROTRACTED LITIGATION. THE LEARNED AUTHORIZED REPRESENTATIVE (HEREINAFTER REFE RRED TO AS LD.AR) FURTHER ARGUED THAT THE ASSESSEE HAS NEITHER SUBMIT TED THE INACCURATE PARTICULARS NOR CONCEALED THE INCOME AND SUBMITTED ALL THE NECESSARY DETAILS AND EVIDENCES WHICH WAS NOT DISPUTED BY THE AO. THE LD.AR ARGUED THAT MERE ACCEPTANCE OF ADDITION SHOULD NOT LEAD TO IMPOSITION OF THE PENALTY AND RELIED ON THE DECISION OF THE HONB LE MADRAS HIGH COURT IN THE CASE OF SV KALYANAM VS. CIT [2010] ITO 327 ITR 477 (MAD). ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE (HEREINAFTER REFERRED TO AS LD.DR) ARGUED THAT THE ASSESSEE HA S ACCEPTED THE ADDITION SINCE HE HAS NO EXPLANATION WITH REGARD TO THE SOU RCE OF THE CREDIT AND THIS IS A CLEAR CASE OF PENALTY U/S.271(1)(C) OF TH E ACT. THE LD.DR RELIED ON THE DECISION OF HONBLE SUPREME COURT JUDGMENT I N THE CASE OF MAK DATA (P) LTD. V. CIT. (2014) 1 SCC 674. 4.0 WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MAT ERIAL PLACED BEFORE US. THE ASSESSEE IS A SALARIED EMPLOYEE HAVING INCOME FROM SALARY. DURING THE PREVIOUS YEAR RELEVANT TO THE AY 2011-12 , THERE WERE CREDITS IN THE BANK ACCOUNT AND THE ASSESSEE HAS EXPLAINED THE SOURCE AS THE GIFT ITA NO.1435/MDS/2016 :- 4 -: RECEIVED FROM HIS FATHER. HE HAS FURNISHED THE SAL E DEED FOR SALE OF LAND AND THE EVIDENCE FOR THE GIFTS. THE AO DID NOT ACC EPT THE INITIAL DEPOSIT SOURCE OF RS.8,75,000/- AND THE SAME WAS MADE ADDIT ION U/S.68 OF IT ACT. NEITHER IN THE ASSESSMENT ORDER NOR IN THE PENALTY ORDER, THE AO HAS DISCUSSED THE DATE OF INITIAL DEPOSIT AND WHY THE A SSESSEES EXPLANATION FOR SOURCE AS GIFTS SHOULD NOT BE ACCEPTED. THE AO HAS SIMPLY REJECTED THE CLAIM OF THE ASSESSEE WITHOUT ANY DETAILED DISC USSION LEADING TO LOGICAL CONCLUSION. THEREFORE, WE ARE OF THE CONSIDERED OP INION THAT THE ASSESSEES ADMISSION OF ADDITIONAL INCOME OF RS.8,7 5,000/- WAS VOLUNTARY TO AVOID PROTRACTED LITIGATION AND TO AVOID INCONVE NIENCE TO HIS FATHER APPEARS TO BE TRUE. WHEN THE EXPLANATION WAS SUBMIT TED BY THE ASSESSEE WITH A DOCUMENTARY EVIDENCE, IT IS BURDEN ON THE RE VENUE TO DISPROVE THE EVIDENCE AND EXPLANATION OFFERED BY THE ASSESSEE AN D MAKE OUT A CASE FOR PENALTY U/S.271(1)(C) OF THE ACT. IN THIS CASE , THE BURDEN OF THE ASSESSEE HAS BEEN DISCHARGED AND THE REVENUE HAS NO T SHIFTED THE BURDEN TO THE ASSESSEE. WHEN THERE WAS A PROPER EXPLANATIO N WITH THE EVIDENCE, MERE ACCEPTANCE FOR ADDITION CANNOT BE A GROUND TO IMPOSE PENALTY U/S.271(1)(C) OF THE ACT. THIS VIEW IS SUPPORTED B Y THE HONBLE MADRAS HIGH COURT IN THE CASE LAW CITED SUPRA. THEREFORE, WE HOLD THAT THERE IS NO CASE FOR PENALTY U/S.271(1)(C) OF THE ACT AND THE O RDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE PENALTY LEVIED BY THE AO U/S.271(1)(C) IS CANCELLED. ITA NO.1435/MDS/2016 :- 5 -: 5.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2017, AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( !' . . # $ % ) (D.S.SUNDER SINGH) ' /ACCOUNTANT MEMBER /CHENNAI, 5 /DATED: 31 ST JANUARY, 2017. TLN 0 .2$6 76+2 /COPY TO: 1. ,- /APPELLANT 4. # 82 /CIT 2. ./,- /RESPONDENT 5. 69 .2 /DR 3. # 82 ( ) /CIT(A) 6. '* < /GF