Muthyala Balakrishna Reddy, Hyderabad V. ITO Ward-12(2), Hyderabad

ITA 168/Hyd/2021

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8586 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-B
• Assessment Year: 2012-2013
• Appeal Filed On: 31-03-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset
• Section: 271(1)(c); 113; 72

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B”: HYDERABAD (THROUGH VIRTUAL CONFERENCE) B EFORE SH RI SA TBEER SING H GODA RA, JU DI CIA L MEM BER AND SHR I L AXMI PR AS A D SAHU , AC COUNT ANT MEMBE R ITA No. 168/H/2021 Assessment Year: 2012-13 Muthyala Balakrishna Reddy, Hyderabad. PAN – ALKPM 4246M Vs. Income-tax Officer, Ward – 12(2), Hyderabad. (Appellant) (Respondent) Assessee by: Shri M.V. Anil Kumar Revenue by: Shri Rohit Mujumdar Date of hearing: 03/09/2021 Date of pronouncement: 15/11/2021 O R D E R PER L.P. SAHU, A.M.: This appeal filed by the Assessee is directed against CIT(A) - 1, Guntur’s order dated 18/09/2020 for AY 2012- 13 involving proceedings u/s 271(1)(c) of the Income Tax Act, 1961 ; in short “the Act. 2. In this appeal, the assessee has raised 7 grounds of appeal, the sum and substance of which is against the ITA No. 168/Hyd/2021 S h r i M u t y a l a B a l a k r i s h n a R e d d y , H y d . :- 2 -: action of the CIT(A) in levying penalty of Rs. 20,76,996/- u/s 271(1)(c) of the IT Act. 3. Briefly, the facts of the case are that the assessee, an individual, e-filed his return of income for the asst. year 2012-13 on 02.02.2013 admitting income of Rs.25,48,260/-. The return was processed and subsequently taken up for scrutiny. Appropriate notices were issued and served. During the course of assessment proceedings, the AO observed that appellant purchased 18.36 acres of land on 17.01.2011 for Rs.13,61,000/-. Certain improvements claimed to have made and thereafter sold away the same vide two documents executed on 07.07.2011 and 09.08.2011 to M/s. Ramky Multi Product Park Ltd., for a total sale consideration of Rs. 1,05,51,300/-. During the course of scrutiny proceedings, the AO noticed that market value of the lands as per SRO at Rs. 1,60,69,000/- and Rs.22,26,400/-. Hence the total SRO value as noticed by the AO stood at Rs. 1,82,95,400/-. Since the land was sold within a period of 36 months, profit on the same was proposed to be taken as short term capital gains in the hands of the appellant. 3.1 During the course of assessment proceedings, the appellant contested that the appellant has made improvements which Include the conversion charges of land, leveling charges, labour charges, fencing charges, etc, ITA No. 168/Hyd/2021 S h r i M u t y a l a B a l a k r i s h n a R e d d y , H y d . :- 3 -: before selling of land. In this process, Incurred Rs.67,21,671/- as expenses. However, the appellant could not produce any bills and vouchers except self-made vouchers in support of expenditure. Having regard to these facts and also the nature of expenditure claimed to have made, the AO conceded that the appellant's contention that improvement had been made to the land. But in absence of evidences, 40% of the said expenditure was disallowed and worked out short term capital gains and arrived total income. 4. When the appeal came up before the CIT(A), the CIT(A) observed that after careful examination of the submissions made by the assessee, it is evident that the appellant was issued an enhancement notice on account of disallowance of development expenses on estimation basis. He, therefore, opined that it is an established and evident fact that the appellant has concealed the particulars of his of income for the A.Y.2012-13 and the contentions of the appellant seems to be not genuine and authentic. 4.1 The CIT(A), therefore, issued a penalty notice u/s 271(1)(c) of the Act dated 09/08/2021 to submit his submissions/objections, if any against the said notice. 4.2 In response to the said notice, the assessee, inter-alia, submitted that all the particulars had been furnished and ITA No. 168/Hyd/2021 S h r i M u t y a l a B a l a k r i s h n a R e d d y , H y d . :- 4 -: there is no deliberate or intentional concealment of income or furnishing of inaccurate particulars, warranting penalty u/s 271(1)(c) of the Act. He relied on various cases in support of his case. 4.3 After considering the submissions of the assessee, the CIT(A) held that it is evident and an established fact that the assessee has concealed the particulars of his income, therefore, it is a fit case impose penalty u/s 271(1)(c). Accordingly, he levied penalty of Rs. 20,76,996/- u/s 271(1)(c) of the Act. 5. Aggrieved, the assessee is in appeal before the ITAT. 6. We have considered the rival submissions and perused the material on record. It is observed that the assessee claimed improvement charges of Rs. 67,21,671/- before selling the land. The AO disallowed 40% of the said expenditure on the ground that the assessee could not produce any bills and vouchers except self-made vouchers in support of expenditure. The said disallowance was accepted by the Assessee and no appeal has been filed against the said disallowance since there is no proof to substantiate his claim of expenditure incurred towards improvement charges before selling the land. Therefore, the CIT(A) came to the conclusion that the assessee has concealed the particulars of his income and accordingly, ITA No. 168/Hyd/2021 S h r i M u t y a l a B a l a k r i s h n a R e d d y , H y d . :- 5 -: levied penalty u/s 271(1)(c). We observe that the assessee could not substantiate with any documentary evidence at all; including self-certified, in regard to claim of expenditure incurred towards the cost of improvement of the capital assets before the revenue authorities and even before us. It shows that there was a deliberate intention of the assessee to avoid the payments of capital gain tax arising on sale of capital assets. In this connection, we rely on the following judgments: 1. Jivanlal and Sons, [2019] 103 taxmann.com 208(SC) 2. Hamirpur District Cooperative Bank Ltd. Vs. CIT, ``[2020] 113 taxmann.com 447 (SC) 3. CIT Vs. Durga Prasad More, 72 ITR 807 SC. 6.1 Considering the ratios laid down in the above judgements, we do not find any infirmity in the order of the CIT(A) in levying penalty u/s 271(1)(c) of the Act and upholding the order of the CIT(A), we dismiss the grounds raised by the assessee on this issue. 7. In the result, appeal of the assessee is dismissed. Pronounced in the open court on 15 th November, 2021. Sd/- Sd/- (S.S. GODARA) (L. P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated: 15 th November, 2021. kv ITA No. 168/Hyd/2021 S h r i M u t y a l a B a l a k r i s h n a R e d d y , H y d . :- 6 -: Copy to : 1 Shri Mutyala Balakrishna Reddy, C/o. M. Anandam & Co., CAs, Flat No. 7A, Surya Towers, SD Road, Scunderabad – 500 003. 2 ITO, Ward – 12(2), Aayakar Bhavan, Basheerbagh, Hyderabad. 3 CIT(A) -15, Guntur 4 ITAT, DR, Hyderabad. 5 Guard File. S.No. Details Date 1 Draft dictated on 2 Draft placed before author 3 Draft proposed & placed before the Second Member 4 Draft discussed/approved by Second Member 5 Approved Draft comes to the Sr. PS/PS 6 Kept for pronouncement 7 File sent to Bench Clerk 8 Date on which the file goes to Head Clerk 9 Date on which file goes to A.R. 10 Date of Dispatch of order