ACIT, Vellore V. Vedagiri Ganesh, Vellore

ITA 175/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8497 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 01-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . . . , . , % BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.175/MDS/2016 ( / ASSESSMENT YEAR: 2011-12) THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-I, VELLORE. VS MR. VEDAGIRI GANESH, 296- , INDIRA NAGAR, PERUMUGAI, VELLORE-632 009. PAN:AADPG2907P ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. A.V.SREEKANTH, JCIT /RESPONDENT BY : MR. K.GOPAL, C.A. /DATE OF HEARING : 30 TH AUGUST 2016 /DATE OF PRONOUNCEMENT : 20 TH SEPTEMBER, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE REVENUE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS)- 13, CHENNAI DATED 19.10.2015 IN ITA NO.243/CIT(A)- 13/2014-15 PASSED UNDER SECTION 271 (1)(C) R.W.S. 250(6) OF THE ACT. 2. THE REVENUE HAS RAISED SEVERAL GROUNDS IN ITS APPEAL, HOWEVER, THE CRUX OF THE ISSUE IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN 2 ITA NO.175/MDS/2016 DELETING THE MINIMUM PENALTY OF RS.30,92,290/- LEV IED BY THE LEARNED ASSESSING OFFICER UNDER SECTION 271(1)(C) O F THE ACT. 3. BRIEF FACTS ARE THAT THE ASSESSEE IS AN INDIVIDU AL ENGAGED IN THE BUSINESS OF DEALERSHIP FOR THREE/FOU R WHEELERS, DIESEL AUTO RICKSHAWS AND TRADING IN SPAR ES FOR THE SAME, FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 ON 08.08.2012. DURING THE COURSE OF ASSESS MENT PROCEEDINGS IT WAS OBSERVED BY THE LEARNED ASSESSIN G OFFICER THAT THE ASSESSEE HAD MADE CASH DEPOSITS IN THE SAVINGS BANK ACCOUNT. THE ASSESSEE HAD ALSO CERTAIN SUNDRY CREDITORS APPEARING IN THE BALANCE SHEET. SINCE THE ASSESSEE COULD NOT FURNISH DETAILS TO THE SATISFACTION OF TH E LEARNED ASSESSING OFFICER AND IN ORDER TO BUY PEACE WITH TH E REVENUE HE OFFERED AN AMOUNT OF RS.36,51,664/- TOW ARDS CASH DEPOSIT AND RS.63,55,750/- TOWARDS ADVANCE M ONEY OF CUSTOMERS AS UNEXPLAINED INCOME U/S.,68 OF THE ACT. SUBSEQUENTLY, THE LEARNED ASSESSING OFFICER ALSO LE VIED PENALTY ON THE ASSESSEE FOR THESE ADDITIONS. 3 ITA NO.175/MDS/2016 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) DELETED THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT BY RELYING IN THE DECISION RENDERED IN T HE CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY BY THE HONBLE KARNATAKA HIGH COURT IN ITA NO.2564 OF 2005 DATED 13/12/2012, WHEREIN IT WAS HELD THAT PENALTY CANNOT BE LEVIED UNDER SECTION 271(1)(C) OF THE ACT WHERE AGREED ADD ITIONS ARE MADE TO BUY PEACE WITH THE REVENUE. 5. WE FIND MERIT IN THE ORDER OF THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS) ON THIS ISSUE. THE ASSESSEE HAS DECLARED THE CASH RECEIPTS FROM HIS CUSTOMERS TOWAR DS BOOKING OF THE VEHICLES AND APPEARS TO HAVE MAINTAI NED THE PARTICULARS OF THE SAME. HOWEVER, HE WAS NOT ABLE T O PRODUCE THOSE PERSONS BEFORE THE REVENUE FOR VERIFICATION. IN ORDER TO AVOID LITIGATION AND TO BUY PEACE WITH THE REVENUE THE ASSESSEE HAD AGREED FOR ADDITIONS AND PAID TAX ACCO RDINGLY UNDER THE BELIEF THAT PENALTY WILL NOT BE LEVIED. I N THIS SITUATION, THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) HAS RIGHTLY DELETED THE PENALTY BY RELYING IN THE CASE CITED SUPRA AND THE DECISION RENDERED IN THE CASE OF CIT VS. 4 ITA NO.175/MDS/2016 SURESH CHANDER MITTAL REPORTED IN 251 ITR 9 (SC). T HEREFORE, WE DO NOT FIND IT NECESSARY TO INTERFERE WITH HIS O RDER AT THIS STAGE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 20 TH SEPTEMBER, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 20 TH SEPTEMBER, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF