Sunil Eknath Loharkar, Nashik V. Assistant Commissioner of Income-tax,

ITA 169/PUN/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1573 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 13-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT HALDER
• Keywords: Income from undisclosed sources

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . . , # BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO.169/PN/2015 % % / ASSESSMENT YEAR : 2009-10 SUNIL EKNATH LOHARKAR, 04, PANZARA SOCIETY, BEHIND RTO, PETH ROAD, NASHIK PAN NO. ABMPL0633R . / APPELLANT V/S ACIT, CIRCLE-1, NASHIK . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPONDENT BY : SHRI ABHIJIT HALDER / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER DATED 09-01-2015 OF THE CIT(A)-I, NASHIK RELATING TO THE ASSESSMENT YEAR 2009-10. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE READS AS UND ER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED IN LEVYING A PENALTY OF RS.2,6 5,740/- U/S.271(1)(C) OF THE INCOME TAX ACT, 1961, BY DISREGARDING APPELLANTS CONTENTION IN THIS REGARD. / DATE OF HEARING :11.07.2016 / DATE OF PRONOUNCEMENT:14.07.2016 2 ITA NO.169/PN/2015 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION. HE FILE D HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.3,72,970/- AND AGRICULTU RAL INCOME OF RS.3,62,573/-. DURING THE COURSE OF ASSESSMENT P ROCEEDINGS, THE AO NOTED THAT THE ASSESSEE HAS SOLD AN IMMOVABLE PROPERTY. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE THE AO NO TED THAT THE SAID PROPERTY WAS SOLD BY THE ASSESSEE ALONG WITH SHRI VILAS N ILKANTH PATIL AND SHRI PRAMOD ATMARAM SAKHARE FOR RS.75 LAKHS (MARKET VALUE OF RS.1,36,00,000/-). THE SHARE OF THE ASSESSEE IN THE SAID SA LE IS RS.25 LAKHS BEING 1/3 RD SHARE. THE SAID PROPERTY WAS PURCHASED ON 31-12- 2007 FOR RS.60 LAKHS OUT OF WHICH THE SHARE OF THE ASSESS EE IS RS.20 LAKHS. THUS, PROFIT OF RS.5 LAKHS WAS NOT DECLARED BY THE ASSESSEE. ON BEING CONFRONTED BY THE AO, THE ASSESSEE OFFERED THE SAME FOR TAXATIO N. 4. THE AO FURTHER NOTED THAT THE CLAIM OF AGRICULTURAL INCO ME OF RS.3,62,573/- WAS NOT SUBSTANTIATED BY THE ASSESSEE BY FILING THE DETAILS OF AGRICULTURAL PRODUCE SOLD, EXPENSES INCURRED ON FE RTILIZERS AND PESTICIDES AND SUPPORTING VOUCHERS. HE HELD THAT THE 7/ 12 EXTRACTS FILED BY THE ASSESSEE ARE NOT SUFFICIENT AND CONCLUSIVE EVIDE NCE TO PROVE THAT THE ASSESSEE HAS CULTIVATED THE LAND AND TOOK AGR ICULTURAL PRODUCE FROM THE SAID LAND. REJECTING THE VARIOUS EXPLANATIONS G IVEN BY THE ASSESSEE THE AO TREATED 50% OF THE AGRICULTURAL INCOME AS INCOME FROM UNDISCLOSED SOURCES INTRODUCED IN THE FORM OF AGRICULTURAL IN COME. THUS, THE AO MADE ADDITION OF RS.6,81,286/- TO THE TOTAL INC OME OF THE ASSESSEE. THE AO THEREAFTER INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE I.T. ACT. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND HOLDING THAT ASSESSEE HAS FURNISHED INACCURATE PARTIC ULARS OF INCOME AND CONCEALED HIS INCOME THE AO LEVIED PENALTY OF RS .2,65,743/- 3 ITA NO.169/PN/2015 U/S.271(1)(C) ON ACCOUNT OF THE ABOVE 2 ADDITIONS (I.E. RS.5 LA KHS + RS.1,81,286/-). 5. IN APPEAL THE LD.CIT(A) DELETED THE PENALTY LEVIED BY TH E AO ON ACCOUNT OF ADDITION RS.1,81,286/- FOR WHICH THE REVENUE IS N OT IN APPEAL BEFORE US. SO FAR AS THE PENALTY LEVIED BY THE AO ON ACCOUNT OF ADDITION OF RS.5 LAKHS FOR NON-DISCLOSURE OF THE PROFIT ON SALE OF THE FLAT AT NASHIK HE CONFIRMED THE PENALTY LEVIED BY THE AO ON T HIS ADDITION BY OBSERVING AS UNDER : 6.2 I HAVE CAREFULLY GONE THROUGH THE FACTS OF THE CASE AND THE SUBMISSION OF THE APPELLANT. THE CONTENTION OF THE APP ELLANT IS DEVOID OF MERIT. THE APPELLANT IS ENGAGED IN CIVIL CONSTRUCTIO N AND THE LAND UNDER REFERENCE WAS LOCATED AT S. NO.41/1, ANANDVALLI, GAN GAPUR ROAD, NASHIK WHICH IS IN THE HEART OF THE CITY, BARELY 5 TO 6 KMS. FROM THE OFFICE OF THE NASHIK MUNICIPAL CORPORATION. THERE WAS NO AMBIGUITY, WHATSOEVER, WITH REGARD TO THE NATURE OF LAND. EVEN IF IT IS ASSUMED FO R A MOMENT THAT THE APPELLANT WAS NOT SURE ABOUT THE NATURE OF THE LAND T HAT HE HAD SOLD ALONGWITH TWO OTHERS, IT IS VERY SURPRISING THAT DESPIT E AO'S SPECIFIC QUERIES REGARDING SALE/PURCHASE OF IMMOVABLE PROPERTY HE DEL IBERATELY, PERHAPS WITH A MALAFIDE INTENTION, KEPT QUIET AND DID NOT F URNISH THE CORRECT INFORMATION VIDE HIS REPLY DATED 25/11/2011. IT WAS O NLY AFTER HE WAS CONFRONTED BY THE AO ON 25/11/2011, THAT HE HAD FIL ED A REVISED COMPUTATION OF INCOME ON 26/12/2011 SHOWING INCOME O N ACCOUNT OF SALE OF IMMOVABLE PROPERTY. 6.3 IN THE FACTS AND THE CIRCUMSTANCES MENTIONED ABOVE , I AM OF THE CONSIDERED OPINION THAT THE APPELLANT HAD WILLFULLY AND WITH A MALAFIDE INTENTION CONCEALED HIS INCOME ON SALE OF LAND AT S.N O.42/1, ANANDVALLI, GANGAPUR ROAD. THE APPELLANT ALSO FURNISHED INACCURAT E PARTICULARS OF HIS INCOME IN THE RETURN OF INCOME AND ALSO IN RESPONSE T O AO'S QUESTIONNAIRE DATED 30/06/2011. THE FACTS OF THE CASE LAWS FURNISHED BY THE APPELLANT ARE DIFFERENT FROM THE FACTS OF THE PRESENT CASE. THE APPELLANT HAD DELIBERATELY CONCEALED TRUE INFORMATION AND INCOME FROM THE DEPARTMENT WITH A MALAFIDE MOTIVE TO EVADE TAX. THE AO WAS, TH EREFORE, JUSTIFIED IN LEVYING PENALTY U/S.271(1)(C) ON THE SAID CONCEALED I NCOME OF RS.5,00,000/- THAT THE APPELLANT HAD DECLARED DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHEN HE WAS CONFRONTED BY THE AO. THE PENALTY OF RS.5,00,000/- IS CONFIRMED. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 7. AFTER HEARING BOTH THE SIDES, WE FIND NO INFIRMITY IN THE OR DER OF THE CIT(A). ADMITTEDLY, THE ASSESSEE HAS SOLD THE PROPER TY ALONG WITH 3 4 ITA NO.169/PN/2015 OTHER PERSONS FOR A CONSIDERATION OF RS.75 LAKHS ON 04-0 9-2008 WHICH WAS PURCHASED BY HIM ALONG WITH THE SAID PERSONS ON 31- 12-2007 FOR A CONSIDERATION OF RS.60 LAKHS. SUCH HIGH VALUE PURCHASE AND SALE TRANSACTIONS CANNOT BE SAID TO BE NOT WITHIN THE KNOWLED GE OF THE ASSESSEE. WE FURTHER FIND THAT THE LD.CIT(A) HAS GIVEN A CATEGORICAL FINDING THAT DESPITE SPECIFIC QUERY RAISED BY THE AO REGARD ING SALE AND PURCHASE OF IMMOVABLE PROPERTY, THE ASSESSEE HAS DELIBERA TELY, PERHAPS WITH A MALAFIDE INTENTION, KEPT QUIET AND DID NOT FURNISH THE CORRECT INFORMATION VIDE HIS REPLY DATED 25-11-2011. ONLY WHEN T HE AO CONFRONTED THE ASSESSEE WITH THE ABOVE INFORMATION, THE A SSESSEE FILED THE REVISED COMPUTATION OF INCOME SHOWING INCOME ON ACCOU NT OF SALE OF IMMOVABLE PROPERTY. THE ARGUMENT OF THE ASSESSEE THAT DUE TO MISTAKE AND IGNORANCE OF THE ACCOUNTANT THE PROFIT WAS NOT DISCLO SED IN OUR OPINION IS TOO VAGUE AND CANNOT BE ACCEPTED AS PLAUSIBLE OR BONAFIDE EXPLANATION FOR NOT DISCLOSING THE PROFIT ON SALE OF A LAND W HICH IS SITUATED VERY NEAR TO THE CITY OF NASHIK. SINCE THE ASSE SSEE IN THE INSTANT CASE HAS NOT DISCLOSED THE PROFIT ON SALE OF SUCH LAND, THEREFORE, THE ASSESSEE HAS CONCEALED HIS PARTICULARS OF INCOME AND FURNISHED INACCURATE PARTICULARS FOR WHICH THE PENALTY LEVIED BY THE AO U/S.271(1)(C) WAS RIGHTLY UPHELD BY THE CIT(A). WE THEREFORE UPHOLD THE ORDER OF THE CIT(A) IN CONFIRMING THE PENALTY ON ACCOUNT O F ADDITION OF RS.5 LAKHS. THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY DISMIS SED. 8. BEFORE PARTING WITH THIS ORDER WE FIND THAT ALTHOUGH TH E ASSESSEE HAS RAISED THE GROUND CHALLENGING THE LEVY OF PENALTY OF RS .2,65,740/-, HOWEVER, WE FIND THE ABOVE PENALTY RELATES TO ADDITION OF R S. 5 LAKHS AND RS.1,81,286/-. THE LD.CIT(A) HAS ALREADY DELETED THE PENALTY LEVIED ON ACCOUNT OF RS.1,81,286/-. HE HAS SUSTAINED THE PENALTY LE VIED ON THE ADDITION OF RS. 5 LAKHS ONLY. THEREFORE, THE ASSESSEE IS NO T CORRECT IN 5 ITA NO.169/PN/2015 RAISING THE GROUND THAT THE AUTHORITIES HAVE ERRED IN LEV YING PENALTY OF RS.2,65,740/-. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14-07-2016. SD/- SD/- ( SUSHMA CHOWLA ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; DATED : 14 TH JULY , 2016. LRH'K ' (*+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % ( ) - THE CIT(A)-I, NASHIK 4. % S / THE CIT-I, NASHIK 5. ( ++, , , , IQ.KS / DR, ITAT, A PUNE; 6. 0 / GUARD FILE. / BY ORDER , // ( + //TRUE COPY // 23 + , / SR. PRIVATE SECRETARY ,, IQ.KS / ITAT, PUNE