SRI A RAMAMURTHY, CHENNAI V. DCIT CIRCLE 1, CHENNAI

ITA 1759/CHNY/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2018 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 23-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P RAJASEKARAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNA L , B BENCH, CHENNAI . . . , . , ' BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER / ITA NO.1759/CHNY/2018 && /ASSESSMENT YEAR : 2011-12 SHRI A.RAMAMURTHY, NO.2, VII CROSS STREET, NEW COLONY, CHROMPET, CHENNAI-600 044. VS THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-I TAMBARAM,CHENNAI-600 045. PAN: ADDPR9196C ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI P.RAJASEKARAN, C.A /RESPONDENT BY : SHRI GURU BASHYAM, JCIT /DATE OF HEARING : 08.11.2018 /DATE OF PRONOUNCEMENT : 16.11.2018 / O R D E R PER N.R.S.GANESAN, JM: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-10, CHENNAI DAT ED 27.03.2018 CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFI CER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. SHRI P.RAJASEKARAN, LEARNED REPRESENTATIVE FOR THE ASSESSE, SUBMITTED THAT THE ASSESSEE FILED RETURN OF INCOME DISCLOSING LONG TERM CAPITAL GAIN OF 4,51,26,505/- ARISING OUT OF TRANSFER OF IMMOVABL E PROPERTY. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, THE ASSESSING 2 ITA NO.1759/CHNY/2018 OFFICER MADE ADDITION OF 7,76.263/- BEING ACCRUED INTEREST ON THE FIXED DEPOSITS WITH INDIAN BANK, T.NAGAR BRANCH. ACCORDIN G TO THE LEARNED REPRESENTATIVE, THE FIXED DEPOSIT WITH INDIAN BANK WAS MADE OUT OF THE CAPITAL GAINS DISCLOSED BY THE ASSESSE. THE ASSESSE E HAS NO RIGHT TO RECEIVE THE ACCRUED INTEREST, TILL THE FIXED DEPOSI T ATTAINED MATURITY. THE BANK AUTHORITIES HAVE NOT ISSUED FORM 16A FOR DEDUC TION OF TAX AS REQUIRED UNDER SECTION 203 OF THE INCOME-TAX ACT. MOREOVER, THE ASSESSEE HAS THE OPTION OF DISCLOSING INTEREST INCO ME ACCRUED ON THE FIXED DEPOSIT, EITHER IN THE YEAR OF ACCRUAL OR IN THE YEAR IN WHICH THE FIXED DEPOSIT ATTAINS MATURITY. THEREFORE, IT CANN OT BE CONSTRUED AS CONCEALMENT OF INCOME BY THE ASSESSEE. 3. ON THE CONTRARY, SHRI GURU BASHYAM, LEARNED DR S UBMITTED THAT ASSESSEE HAS NOT DISCLOSED THE INTEREST INCOME OF 7,76,263/-, THEREFORE THE ASSESSING OFFICER MADE ADDITION TO THE TOTAL IN COME. SINCE THE ASSESSEE HAS NOT DISCLOSED THE INTEREST INCOME, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE CONCEALED HIS INCOME, THERE FORE LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE DISCLOSED CAPITAL GAIN OF 4,51,26,505/-. THE ASSESSING OFFICER 3 ITA NO.1759/CHNY/2018 FOUND THAT THERE WAS TDS DEDUCTED BY THE INDIAN BAN K ON THE FIXED DEPOSIT OF 4.20 CRORES. THE ASSESSEE HAS DEPOSITED 4.20 CRORES OUT OF THE LONG TERM CAPITAL GAINS WITH THE INDIAN BANK, T .NAGAR BRANCH. ADMITTEDLY, THE DEPOSIT IS A CUMULATIVE DEPOSIT AN D THE ACCRUED INTEREST AT THE FIXED DEPOSIT WILL BE ADDED TO THE DEPOSIT. THE ENTIRE AMOUNT WOULD BE PAID ONLY ON THE MATURITY OF THE FIXED DEP OSIT. THE QUESTION NOW ARISES FOR OUR CONSIDERATION IS WHETHER THE ASS ESSEE HAS CONCEALED THE ACCRUED INTEREST INCOME OF 7,76,263/- ON THE FIXED DEPOSIT OF 4.20 CRORES. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT EVEN THOUGH INTEREST WAS CREDITED TO THE FIXED DEPOSIT, THE ASS ESSEE HAS NO RIGHT TO RECEIVE INTEREST, TILL THE FIXED DEPOSIT ATTAINED M ATURITY. THE INTEREST ON THE FIXED DEPOSIT WOULD BE PAID BY THE BANK EITHER ON TERMINATION OF THE FIXED DEPOSIT OR THE FIXED DEPOSIT ATTAINS MATURITY . IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE OPINION THAT THERE WAS NO CONCEALMENT OF INCOME FOR THE PURPOSE OF LEVY OF PE NALTY UNDER SECTION 271(1)(C) OF THE ACT. THEREFORE, THIS TRIBUNAL IS U NABLE TO UPHOLD THE ORDERS OF LOWER AUTHORITIES. ACCORDINGLY, THE ORDER S OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND PENALTY LEVIED BY THE ASSES SING OFFICER UNDER SECTION 271(1)(C) IS DELETED. 4 ITA NO.1759/CHNY/2018 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STA NDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH NOVEMBER, 2018 SD/- SD/- ( . ) ( . . . ) ( A.MOHAN ALANKAMONY ) (N.R.S.GANESAN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER /CHENNAI, /DATED 16 TH NOVEMBER, 2018. SOMU /COPY TO: 1. APPELLANT 2. RESPONDENT 3. ( ) /CIT(A) 4. /CIT 5. /DR 6. /GF