Shri N.Shanmugavel, Trichy V. ACIT, Trichy

ITA 178/CHNY/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5130 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 05-05-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 16-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TAPAS KUMAR DUTTA
• Assessee Lawyers: S SRIDHAR
• Section: 133A; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE SHRI HARI OM MARATHA, J.M. AND SHRI N.S. SAINI, AM .. I.T.A. NOS. 178 TO 180/MDS/2009 ASSESSMENT YEAR 2000-01, 2001-02 & 2002-03 SHRI N. SHANMUGAVEL ESSEN INSTRUMENTATION & ELECTRICAL NO. 6, TYPE II, TRECSTEP COMPLEX, THUVAKUDI, TRICHY (PAN NO. AAWPS 5158 D) VS. THE A.C.I.T CIRCLE 1V TRICHY (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. SRIDHAR DEPARTMENT BY : SHRI TAPAS KUMAR DUTTA O R D E R PER HARI OM MARATHA, JM THESE THREE APPEALS OF THE ASSESSEE FOR ASSESSMENT YEARS 2000-01, 2001-02 & 2002-03 ARE DIRECTED AGAINST THE COMMON ORDER OF THE LD. CIT(A), TIRUCHIRAPALLI DATED 17.12.2008 AND EMANATE FROM PAGE 2 OF 6 I.T.A. NO. 178 TO 180/MDS/2009 THE PENALTY ORDERS PASSED U/S 271(1)(C) OF THE INCO ME-TAX ACT, 1961 [IN SHORT, THE ACT] DATED 20.3.2007 IN ALL THESE Y EARS BY THE ACIT, CIRCLE 4, TRICHY. 2. THE ONLY GROUND RAISED IN ALL THESE APPEALS IS T HAT THE COMMISSIONER OF INCOME-TAX [APPEALS] HAS DECIDED PE NALTY APPEALS EVEN PRIOR TO COMPUTATION OF TAXABLE INCOME AS DIRE CTED BY THE TRIBUNAL IN QUANTUM APPEALS. THEREFORE, ALL THESE APPEALS ARE BEING DECIDED BY A COMMON ORDER FOR THE SAKE OF BRE VITY AND CONVENIENCE. 3. BRIEFLY STATED, THE FACTS LEADING TO THESE APPEA LS ARE THAT THE ASSESSEE IS A PARTNER IN M/S ESSEN INSTRUMENTATION & ELECTRICALS. HE GOT A MARRIAGE HALL CONSTRUCTED AT KOVILPATTI DURIN G THE F.YS. 2000- 01 AND 2001-02. A SURVEY U/S 133A OF THE ACT WAS C ONDUCTED AT THE MARRIAGE HALL ON 8.3.2002. THE ASSESSEE HAD DISCLO SED THE COST OF LAND PURCHASED AT RS. 4,09,500/- BUT, AT THE TIME O F SURVEY, HE MADE A STATEMENT THAT THE LAND WAS PURCHASED FOR RS . 14.50 LAKHS. DURING THE ASSESSMENT PROCEEDINGS, THE ABOVE ADMISS ION WAS RETRACTED BY THE ASSESSEE. THE ASSESSING OFFICER R ELIED ON THE PAGE 3 OF 6 I.T.A. NO. 178 TO 180/MDS/2009 ADMISSION OF COST MADE AT ` . 14.50 LAKHS DURING SURVEY AND MADE ASSESSMENTS ON THE BASIS OF ADMITTED COST OF LAND P URCHASED; WHICH WAS ALSO CONFIRMED BY THE COMMISSIONER OF INCOME-TA X [APPEALS]. IN THE MEANTIME, THE ASSESSING OFFICER INITIATED AN D LEVIED PENALTY U/S 271(1)(C) OF THE ACT FOR CONCEALMENT OF TAXABLE INCOME. THE ASSESSEE FILED APPEALS, BEFORE COMMISSIONER OF INCO ME-TAX [APPEALS] TAKING A MAIN PLEA THAT THE HON'BLE ITAT HAS DECIDED QUANTUM APPEALS AND HAS DIRECTED THE ASSESSING OFFI CER TO TAKE THE COST OF LAND AT ` . 6,50,000/-, SO THESE APPEALS BE KEPT IN ABEYANCE TILL THE TIME ASSESSING OFFICER GIVES EFFECT TO THE TRIBUNAL ORDER. BUT THE COMMISSIONER OF INCOME-TAX [APPEALS] DID NO T OBLIGE AND HAS DECIDED THE APPEALS. NOW THE ASSESSEE IS IN AP PEAL BEFORE US AND THE COMMISSIONER OF INCOME-TAX [APPEALS] HAS FO UND THAT ASSESSMENT WAS COMPLETED FOR ALL THESE YEARS RELYIN G ON THE SWORN STATEMENT OF THE ASSESSEE MADE DURING SURVEY. THE COMMISSIONER OF INCOME-TAX [APPEALS] HAD ALSO CONFIRMED THIS ADD ITION IN QUANTUM APPEALS. THE FACT THAT THE TRIBUNAL, VIDE ITS ORDER DATED 19.8.2008 IN ITA NOS. 377 TO 379/MDS 2006, IN ASSES SEES OWN CASE FOR ASSESSMENT YEAR 2000-01 TO 2002-03 IN QUANTUM A DDITIONS HAS REMANDED THE ISSUE BACK TO THE ASSESSING OFFICER DI RECTING HIM TO PAGE 4 OF 6 I.T.A. NO. 178 TO 180/MDS/2009 TREAT THE COST OF LAND AT RS. 6,50,000/- HOLDING TO BE BASED ON EVIDENCE. THE DIRECTIONS GIVEN BY THE TRIBUNAL WER E AVAILABLE BEFORE THE COMMISSIONER OF INCOME-TAX [APPEALS], AS COPY OF THE TRIBUNAL ORDER WAS PRODUCED BEFORE HIM, BUT INSTEAD OF WAITING FOR ASSESSING OFFICERS COMPLIANCE OF THE DIRECTIONS BY THE TRIBUNAL, THE COMMISSIONER OF INCOME-TAX [APPEALS] HAS HIMSELF, I N A WAY, COMPLIED WITH THE DIRECTIONS OF THE TRIBUNAL AND RE STRICTED THE AMOUNT OF PENALTIES ACCORDINGLY. THE OTHER ADDITIO N WHICH WAS THE BASIS FOR LEVYING PENALTY U/S 271(1)(C) OF THE ACT WAS ADDITION MADE TOWARDS DRAWINGS FOR PAYMENTS WHICH WAS ALSO CONFIR MED BY THE COMMISSIONER OF INCOME-TAX [APPEALS] AND THIS AMOUN T OF RS. 60,000/-, HAVING BEEN DELETED BY THE TRIBUNAL. THE COMMISSIONER OF INCOME-TAX [APPEALS] HELD THAT THE ASSESSEE WILL GET RELIEF TO THAT EXTENT IN THE PENALTY PROCEEDINGS IN THE CONCERNED YEAR. ADDITION OF RS. 35,000/- HAS BEEN REMANDED BACK TO THE ASSES SING OFFICER FOR PROPER VERIFICATION AND THIS ADDITION IS REGARDING CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTIONS MADE U/S 68 OF THE ACT. THE ASSESSING OFFICER HAS ALSO BEEN GIVEN DIRECTIONS TO VERIFY THE SAME. THERE ARE OTHER ADDITIONS LIKE THE ADDITION OF RS. 59,000/- TOWARDS ADVANCE FROM SMT. JAYALAXMI AND RS. 60,000/- AS LOA N RECEIVED PAGE 5 OF 6 I.T.A. NO. 178 TO 180/MDS/2009 FROM SMT. BAKKIYAWATHI. THE OTHER ADDITION OF RS. 53,071/- WAS MADE TOWARDS CURRENT ACCOUNT OF M/S ESSEN INSTRUMEN TATION AND ELECTRICALS OF WHICH ASSESSEE WAS A PARTNER. THIS ADDITION HAS BEEN SET ASIDE BY THE TRIBUNAL FOR PROPER VERIFICATION B Y THE ASSESSING OFFICER. IN THE BACKDROP OF THESE FACTS, IT WAS AR GUED BEFORE US THAT THE COMMISSIONER OF INCOME-TAX [APPEALS] SHOUL D HAVE WAITED FOR THE FRESH COMPUTATION, WHICH ARE TO BE MADE BY THE ASSESSING OFFICER IN COMPLIANCE OF THE DIRECTION OF THE TRIBU NAL. 4. WE HAVE SEEN THE ENTIRE EVIDENCE ON RECORD IN TH E LIGHT OF FACTS AND FINDING OF THE TRIBUNAL AND WE ARE CONVIN CED THAT THE COMMISSIONER OF INCOME-TAX [APPEALS] SHOULD HAVE WA ITED FOR THE OUTCOME OF THE VERIFICATION HAVING BEEN MADE BY THE ASSESSING OFFICER AS DIRECTED BY THE TRIBUNAL. HENCE WE ARE OF THE CONSIDERED OPINION THAT IN THE INTEREST OF JUSTICE, THE IMPUGNED ORDERS OF THE COMMISSIONER OF INCOME-TAX [APPEALS] NEED TO BE SET ASIDE AND THE MATTER HAS TO BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT HE WILL T AKE ACTION, IF NEEDED, AFTER GIVING EFFECT TO THE FINDINGS OF THE TRIBUNAL AND FRAME PENALTY ORDERS, IF SO REQUIRED, IN THE CHANGE D FACTS AND PAGE 6 OF 6 I.T.A. NO. 178 TO 180/MDS/2009 CIRCUMSTANCES OF THE CASE AFTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. IN THE RESULT, ALL THE THREE APPEALS FILED BY TH E ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT IMMEDIATELY AFT ER THE CONCLUSION OF THE HEARING ON 05.05.2011. SD/- SD/- (N.S. SAINI) ((HARI OM MARATHA ) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 5 TH MAY, 2011. VL COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE