Income Tax Officer, Ward-8(2), Hyderabad V. Sri. Gona Ravindra Rao, Hyderabad

ITA 1481/HYD/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6460 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 28-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER AND S HRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO.1481/HYD/12 : ASSESSMENT YEAR 2007 - 08 INCOME TAX OFFICER WARD 8(2), HYDERABAD V/S. SHRI GONA RAVINDRA RAO, MIYAPUR, HYDERABAD (RR DISTRICT) ( PAN - ADPRG 7546 D) (APPELLANT) (RESPONDENT) APPELLANT BY : S HRI D.SUDHAKAR RAO DR RESPONDENT BY : SHRI K.A.SAI PRASAD DATE OF HEARING 28 .0 5 .2014 DATE OF PRONOUNCEMENT 16. 0 7.2014 O R D E R PER B.RAMAKOTAIAH, ACCOUNTANT MEMBER: THIS IS REVENUES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX(APPEALS) III , HYDERABAD DATED 10 TH JULY, 2012, CANCELLING THE PENALTY OF RS.7,35,300 IMPO SED BY THE ASSESSING OFFICER UNDER S.271(1)(C) OF THE INCOME TAX ACT,1961 FOR THE ASSESSMENT YEAR 200 7 - 0 8 . 2. FACTS OF THE CASE IN BRIEF LEADING TO THE FILING OF THE PRESENT APPEAL ARE THAT THE ASSESSEE, AN INDIVIDUAL AND MANAGING PARTNER OF M/S. SAI PRIYA CON S TRU C TIONS, HYDERABAD, HAS FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007 - 08 ON 20.10.2008, DECLARING A TOTAL INCOME OF RS.22,03,829. THERE WAS A SURVEY OPERATION UN D ER S.133A IN THE CASE OF THE FIRM , M/S. SAI PRIYA CONSTRUCTIONS, HYDERABAD , ON 9.9.2008, DURING THE COU R SE OF WHICH CE R TAIN ENQUIRIES WERE MADE , AND MATERIAL WAS IMPOUNDED, BY THE DEPARTMENT. DURING THE COU R SE OF ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2007 - 08 IN THE CA S E OF THE ASSESSEE, WHEN TH E ASSESSING OFFICER HAS P ROPO S ED AND ASKED ABOUT THE ADMISSION I TA NO . 1481 /HYD/201 2 SHRI GONA RAVINDRA RAO, HYDERABAD 2 OF ADDITIONAL INCOME OF R S .30,51,000, THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS REQUESTED TO GIVE TELESCOPING FOR AN AMOUNT O F R S .13,35,000, AS THE ASSESSEE HAS ADMITTED INCOME OF R S .13,35,000 AS HIS INCOME REC EIVED FROM TH E SALE OF FLATS DURING THE Y E AR,S IN C E THE ASSESSEE HAS RECEIVED SALE CON S ID E RATION FROM THE DISPOS A L OF FLATS DURING THE YEAR UNDER CONSIDERATION AND REQUESTED TO TAKE SOU R CES FOR THE ABOVE INVESTMENT TO THE EXTENT OF INCOME ADMITTED BY HIM . HAVING FOUND ON VERIFICATION THAT THE ASSESSEE IN THE RETURN OF INCOME FILED, ADMITTED AN AMOUNT O F RS .13,35,000 UN D ER THE HEAD SHORT T E RM CAPITAL GAINS , THE ASSESSING OFFICER CON S I D ERED THE REQUEST OF THE ASSESSEE FOR TELE S COPING. HOWEVER, BY TAKING I NTO ACCOUNT THE PERIOD O F SALES AND PU R CHA S ES MADE BY THE ASSESSEE, ALLOWED ONLY AN AMOUNT OF RS.6,00,000 FOR TELESCOPING, FOR WHICH THE ASSESSEE TOO AGREED. TELESCOPING THIS AMOUNT O F RS .6,00,000 AGAIN S T THE ADDITIONAL IN C OM E OFFERED OF RS.30,51,000, THE ASSESSING OFFICER MADE AN ADDITION OF R S .24,51,000 AS UNACCOUN TE D INVESTMENT UNDER S.69 OF THE ACT. SIMILARLY, THE ASSESSING OFFICER, OBSERVING THAT THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE WAS MORE THAN REASONABLE, DISAL L O W ED THE SAME TO THE EXTENT OF R S .4,20,000 OUT OF THE TOTAL AMOUNT CLAIMED OF RS .5,50,000. WITH TH E SE TWO ADDITIONS OF R S .24,51,000 AND RS.4,20,000, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT ON A TOTAL INCOME OF RS.50,74,830, VIDE ORDER OF ASSESSMENT DATED 21.12.2009 PASSE D UNDER S.143(3) OF THE ACT. 3. TREATING THE ADDITION OF RS.24,51,000 BEING UNACCOUNTED INVESTMENT, MADE AS ABOVE BY THE ASSESSING OFFICER UNDER S.69 OF THE ACT, AS REPRESENTING THE CONCEALED INCOME O F THE ASSESSEE, THE ASSESSING OFFICER INITIATED PENAL TY PROCEEDINGS UNDER S.271(1)(C) OF THE ACT. ASSESSEE IN RESPONSE STOUTLY OPPOSED THE PENALTY PROPOSED, THROUGH HIS ELABORATE EXPLANATION, PLACING RELIANCE ON A NUMBER OF JUDICIAL PRONOUNCEMENTS AND CONTENDING INTER ALIA THAT THE ADDITION MADE WAS ON I TA NO . 1481 /HYD/201 2 SHRI GONA RAVINDRA RAO, HYDERABAD 3 THE BASIS OF ADDITIONAL INCOME DECLARED BY THE ASSESSEE ITSELF, AND IMPOSITION OF PENALTY IS NOT AUTOMATIC OR A ROUTINE EXERCISE, AND MERELY BECAUSE AN INCOME IS ADDED/OFFERED, IT WOULD NOT LEAD TO PENALTY. THE ASSESSING OFFICER NOT CONVINCED WITH THE EXPLANAT ION OF THE ASSESSEE, AND OBSERVING THAT THE ASSESSEE HAD ADMITTED THE ADDITIONAL INCOME BASED ON THE DOCUMENTARY EVIDENCES FOUND AND IMPOUNDED DURING THE COURSE OF SURVEY OPERATIONS AND NOT VOLUNTARILY DECLARED OR ADMITTED ADDITIONAL INCOME BY FILING REVIS ED RETURN, IMPOSED MINIMUM PENALTY OF RS.7,35,300, VIDE ORDER OF PENALTY DATED 29.6.2010 PASSED UNDER S .271(1)(C) OF THE ACT. 4. ON APPEAL, THE CIT(A) AFTER DETAILED CONSIDERATION OF THE CASE - LAW RELIED UPON BY THE ASSESSEE DURING THE COU R SE OF PENALTY PROCEEDINGS, AS WELL AS BEFORE HIM, IN THE LIGHT OF THE FACTS OF THE CASE ON HAND, FOUND NO MERIT OF THE IMPOSITION OF PEN A LTY IN THIS CASE, AND AC C OR D INGLY CANCELLED THE SAME. 5. AGGRIEVED BY THE CANCELLATION OF PENALTY BY THE CIT(A), REVENUE IS IN AP PEAL BEFORE US. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE IMPUGNED ORDERS OF THE REVENUE AUTHORITIES AND OTHER MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ADDITION OF RS.24,51,000 HAS BEEN MADE BY THE ASSESSING OFFICER, JUST BASED ON THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE AT THE TIME OF SURVEY OPERATIONS. WHILE DOING SO, THE ASSESSING OFFICER HAS DULY ACCEDED TO THE REQUEST OF THE ASSESSEE FOR TELESCOPING THE TOTAL ADDITIONAL INCOME OF RS.30,51,000 OFFERED, TO THE EXTENT OF RS.6,00,000. BUT FOR THE ADMISSION OF ADDITIONAL INCOME MADE BY THE ASSESSEE, THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY MATERIAL BEFORE MAKING THE ADDITION IN ASSESSMENT PROCEEDINGS, BASED ON WHICH IT I TA NO . 1481 /HYD/201 2 SHRI GONA RAVINDRA RAO, HYDERABAD 4 COULD B E CONCLUDED THAT THE ASSESSEE HAS EI THER CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS. EVEN DURING THE PENALTY PROCEEDINGS, THE ASSESSING OFFICER HAS MERELY RELIED UPON THE ADDITION MADE IN THE ASSESSMENT, AND HAS NOT , AS MANDATED BY LAW, INDEPENDENTLY EXAMINED THE MATTER TO ARR IVE AT THE CON C LU S ION THAT THE ASSESSEE HAS INDEED CONCEALED THE PARTICULARS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS THEREOF. EVERY ADDITION MADE IN THE ASSESSMENT CANNOT AUTOMATICALLY LEAD TO IMPOSITION OF PENALTY FOR CONCEALMENT. MERELY BECA USE AN ADDITION HAS BEEN MADE IN THE ASSESSMENT PROCEEDINGS OR THAT IT HAS BEEN ACCEPTED BY THE ASSESSEE, ONE CANNOT CONCLUDE CONCEALMENT ON THE PART OF THE ASSESSEE OR JUSTIFY THE IMPOSITION OF PENALTY. SUCH A CONCLUSION AS TO CONCEALMENT OF INCOME OR FU RNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE HAS TO BE ARRIVED AT IN THE PENALTY PROCEEDINGS ONLY THROUGH INDEPENDENT EXAMINATION OF THE MATTER IN SUCH PROCEEDINGS. IN THE FACTS OF CIRCUMSTANCES OF THE CASE, WE FIND THAT IT IS NOT A FIT CA S E FOR THE LEVY OF PENALTY UNDER S.271(1)(C) OF THE ACT, AND THE CIT(A) WAS JUSTIFIED IN CANCELLING THE SAME. WE ACCORDINGLY UPHOLD THE O R DERS O F THE CIT(A), REJ E CTIN G TH E GROUNDS OF THE REVENUE IN THIS APPEAL. 6. IN THE RESULT, REVENUES APPE AL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 16.07. 20 14 SD/ - SD/ - ( SAKTIJIT DEY ) ( B.RAMAKOTAIAH ) JUDICIAL MEMBER ACCOUNTANT MEMBER DT/ - JULY, 2014 COPY FORWARDED TO: 1. SHRI GONA RAVINDRA RAO, 2 - 2 - 244F JANAPRIYA N AGAR, MIYAPUR, HYDERABAD (RR DISTRICT) I TA NO . 1481 /HYD/201 2 SHRI GONA RAVINDRA RAO, HYDERABAD 5 2 . INCOME TAX OFFICER WARD 8(2), HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) III HYDERABAD 4. COMMISSIONER OF INCOME - TAX I I , HYDERABAD 5 DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S