Sri R.Ravi Venkatesh, Coimbatore V. ACIT, Coimbatore

ITA 1492/CHNY/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0841 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-02-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 05-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA
• Assessee Lawyers: K RADHAKRISHNAN
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ------- ITA NO. 1492/MDS/2011 ASSESSMENT YEAR : 2007-08 SRI R. RAVI VENKATESH, NO.55, 1 ST STREET, SIVANANDA COLONY, COIMBATORE-641 012. V. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-II, COIMBATORE. (PAN : AFBPR0839Q) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. RADHAKRISHNAN, ADVOCATE RESPONDENT BY : DR. S. MOHARANA, CIT DATE OF HEARING : 04.0 2.2013 DATE OF PRONOUNCEMENT : 13.02.201 3 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE CIT(APPEALS)-I, COIMBATORE DATED 22-06-2011 FOR THE ASSESSMENT YEAR 2007-08. ITA NO.1492/MDS /2011 : 2 : 2. BRIEF FACTS ARE THAT THE ASSESSEE IS A PARTNER IN CABLE TV FIRMS AND FILED HIS RETURN OF INCOME ON 31-10-2007 ADMITTING TOTAL INCOME OF ` 7,52,270/- FOR THE ASSESSMENT YEAR 2007-08. THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME T AX ACT, 1961 ('THE ACT' FOR SHORT). SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE WAS ISSUED TO THE ASSESSEE U/S 143(2) OF THE ACT. IN THE ASSESSMENT ORDER THE ASSESSING OFFICER OBSERVED THAT ON VERIFICATION OF THE AIR INFORMATIO N IT WAS NOTICED THAT THE ASSESSEE HAD SOLD PROPERTY WORTH ` 30 LAKHS AND THE ASSESSEE HAD MADE CASH DEPOSIT OF ` 40 LAKHS. THE ASSESSEE CLAIMED THAT THE LAND SOLD WAS AGRICULTURA L LAND AND NOT WITHIN 8 KMS. OF MUNICIPAL LIMITS. THE SAME WA S VERIFIED AND FOUND THAT THE AREA WAS WITHIN 8 KMS. OF MUNICI PAL LIMITS OF COIMBATORE. THE ASSESSEE AGREED THAT THE LAND W AS WITHIN 8 KMS. AND SAID THAT HE WAS NOT AWARE OF THE DISTAN CE AND SO DID NOT SHOW THE SAME IN HIS BOOKS OF ACCOUNTS. AC CORDINGLY, THE NET SALE CONSIDERATION SHOWN BY THE ASSESSEE WA S ` 47.15 LAKHS AND ALSO CLAIMED DEDUCTION U/S 54F OF THE ACT FOR INVESTMENT IN HIS HOUSE FOR WHICH PROOF WAS FURNISH ED AND THE FINAL AMOUNT OF ` 27.15 LAKHS WAS OFFERED TO TAX. THE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ITA NO.1492/MDS /2011 : 3 : 3. THEREAFTER NOTICE UNDER SECTION 271(1)(C) OF THE ACT WAS ISSUED ON 20-11-2009. IN RESPONSE TO THE NOTICE, T HE ASSESSEE FILED A LETTER DATED 1-1-2010 REQUESTING TO DROP TH E PENALTY PROCEEDINGS FOR THE MERE REASON THAT HE WAS UNDER T HE IMPRESSION THAT THE INCOME WHICH AROSE OUT OF SALE OF AGRICULTURAL LAND WAS NOT LIABLE FOR TAXATION. HOW EVER, THE ASSESSING OFFICER OBSERVED IN THE PENALTY ORDER THA T THE ASSESSEE HAS WILFULLY CONCEALED THE PARTICULARS OF THE INCOME IN THE RETURN OF INCOME FILED AND HE HAS NOT REVEALED ANY PARTICULARS ABOUT THE SALE OF THE AGRICULTURAL LAND . AFTER THE VERIFICATION BY THE DEPARTMENT IT CAME TO KNOW THAT THE LAND WAS WITHIN 8 KMS. OF THE MUNICIPAL LIMIT. THE ASSE SSING OFFICER CAME TO THE CONCLUSION THAT IT AMOUNTED TO WILFUL A TTEMPT OF CONCEALMENT OF INCOME AND ACCORDINGLY IMPOSED PENAL TY OF ` 5,43,000/-. 4. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MAT TER BEFORE THE CIT(APPEALS). THE CIT(APPEALS) IN HIS O RDER OBSERVED THAT, AS SEEN FROM THE ASSESSMENT ORDER, IT WAS ONLY ON VERIFICATION OF AIR INFORMATION, IT WAS NOTICED THAT THE APPELLANT HAS MADE CASH DEPOSITS OF ` 40 LACS. WHEN IT WAS POINTED OUT DURING THE ITA NO.1492/MDS /2011 : 4 : COURSE OF SCRUTINY, THE ASSESSEE CLAIMED THAT THE AGRICULTURAL LAND WAS NOT WITHIN 8 KMS. OF MUNICIPAL LIMITS OF COIMBATORE AND SO HE HAS NOT DECLARED THE CAPITAL GAINS. SUBSEQUENTLY, AFTER VERIFICATION, THE ASSESSEE AGREED THAT THE LAND WAS WITHIN 8 KMS. AND SAID HE WAS NOT AWARE OF THE DISTANCE AND SO DID NOT SHOW THE SAME IN HIS BOOKS OF ACCOUNTS. THE CIT(APPEALS) HELD THAT IT IMPLIED THAT THERE WA S CONCEALMENT ON THE PART OF THE ASSESSEE. THE ASSES SEE HAS NOT REVEALED ANY DETAILS OR PARTICULARS ABOUT THE S ALE OF AGRICULTURAL LAND AND IT WAS ONLY AFTER VERIFICATIO N BY THE DEPARTMENT THAT THE ASSESSEE AGREED THAT HE HAD REC EIVED AN AMOUNT OF ` 50 LAKHS AS SALE CONSIDERATION. THE CIT(APPEALS) THEREFORE CONFIRMED THE PENALTY IMPOSED BY THE ASSE SSING OFFICER. 5. ON BEING AGGRIEVED, THE ASSESSEE HAS CARRIED THE MATTER BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE ASSESSEE WAS UNDER THE BONA FIDE BELIEF THAT THE LAND IS AGRICULTURAL LAND AND THEREFORE NO TAX IS REQUIRED TO BE PAID BY HIM. SO FAR AS THE DISTANCE IS CONCERNED, HE SUBMITTED THAT HE WAS UNDER THE IMPRE SSION ITA NO.1492/MDS /2011 : 5 : THAT IT IS BEYOND 8 KMS. OF THE MUNICIPAL LIMITS OF COIMBATORE. THEREFORE, HE DID NOT OFFER THE SALE AMOUNT FOR THE PURPOSE OF INCOME-TAX. 6. ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT IN THE SCRUTINY ASSESSMENT PROCEEDINGS THE ASSESSEE HIMSEL F ADMITTED THAT THE LAND SOLD BY HIM WAS WITHIN 8 KMS . LIMIT OF COIMBATORE MUNICIPALITY AND HE HAD AGREED FOR PAYME NT OF TAXES. THE LEARNED DR FURTHER SUBMITTED THAT IF NO SCRUTINY ASSESSMENT HAD BEEN TAKEN PLACE, THE ASSESSEE WOULD HAVE ESCAPED FROM THE TAX LIABILITY. 7. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORD S AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE SOLD THE LAND AND DEPOSITED THE SALE CONSIDERATION IN THE BANK. WHEN THE ASSES SEE FILED HIS RETURN OF INCOME, NO DETAILS IN RESPECT OF THE SALE OF THE AGRICULTURAL LAND WERE FURNISHED IN THE RETURN OF I NCOME. WHEN SCRUTINY HAD TAKEN PLACE AND WHEN THE ASSESSIN G OFFICER ASKED THE ASSESSEE BASED ON THE AIR INFORMATION, HE ADMITTED THAT HE HAD SOLD THE LAND AND THE SALE CONSIDERATIO N WAS DEPOSITED IN THE BANK AND PAID THE TAXES ACCORDINGL Y. NOW THE ASSESSEE SAYS THAT HE WAS UNDER THE BONA FIDE BELIEF THAT ITA NO.1492/MDS /2011 : 6 : THE LAND IS AGRICULTURAL LAND AND HE WAS ALSO UNDER THE BONA FIDE IMPRESSION THAT THE LAND WAS SITUATED BEYOND 8 KMS . OF THE MUNICIPAL LIMITS OF COIMBATORE AND THEREFORE TA XES WERE PAID. WHEN THE ASSESSEE HIMSELF HAD ACCEPTED BEFOR E THE ASSESSING OFFICER THAT THE LAND WAS WITHIN THE DIST ANCE OF 8 KMS. OF THE MUNICIPAL LIMITS, WHY INITIALLY HE THOU GHT IT WAS BEYOND 8 KMS. WE ARE UNABLE TO AGREE WITH THE SUBM ISSIONS OF THE ASSESSEE. WE FIND THAT THERE IS A CLEAR NEG LIGENCE ON THE PART OF THE ASSESSEE IN NOT MAKING ENQUIRY OR T AKING PROPER ADVICE WHETHER THE SALE CONSIDERATION RECEIV ED BY HIM IS TAXABLE OR NOT. HE WAS ALSO NOT ABLE TO PROPERL Y INVESTIGATE WITH THE REGARD TO THE LAND THAT HE HAD SOLD, WHETH ER IT IS WITHIN THE MUNICIPAL LIMITS OR BEYOND THE MUNICIPAL LIMITS. THE ASSESSEE HAS NOT SUBMITTED ANY DETAILS WITH REGARD TO THE SALE OF THE LAND BEFORE THE ASSESSING OFFICER. WHEN THE ASSESSING OFFICER QUESTIONED IN THE SCRUTINY PROCEEDINGS HE H AS ACCEPTED THAT THE LAND COMES WITHIN THE PURVIEW OF 8 KMS. AN D PAID THE TAXES ACCORDINGLY. THEREFORE, SECTION 271(1)(C) OF THE ACT SQUARELY APPLIES TO THE ASSESSEES CASE FOR THE REA SON THAT THE ASSESSEE HAS CONCEALED THE INCOME BY WITHHOLDING TH E DETAILS OF THE SALE OF THE LAND. WE THEREFORE CONFIRM THE ORDER PASSED ITA NO.1492/MDS /2011 : 7 : BY THE CIT(APPEALS) AND THE APPEAL FILED BY THE ASS ESSEE IS DISMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 13 TH FEBRUARY, 2013, AT CHENNAI. SD/- SD/- (ABRAHAM P. GEORGE) (V.DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 13 TH FEBRUARY, 2013. H. COPY TO: ASSESSEE/AO/CIT(A)/CIT/D.R./GUARD FILE