Kiran Devi Choudhary, Ranchi V. DCIT Central Circle-1, Ranchi

ITA 179/RAN/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0010 (ITAT-RANCHI)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2003-2004
• Appeal Filed On: 22-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHURY ORAM
• Assessee Lawyers: S K PODAR DEVESH PODAR
• Keywords: Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI SMC BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO S . 179 & 180/RAN/2015 ASSESSMENT YEAR S : 2003 - 04 & 2004 - 05 KIRAN DEVI CHOUDHURY, NORTH MARKET ROAD, UPPER BAZAR, RANCHI VS. DCIT, CENTRAL CIRCLE - 1, RANCHI PAN/GIR NO. ABIPC 2627 E (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : S/ SHRI S.K.PODAR /DEVESH PODAR , AR REVENUE BY : SHRI CHAUDHURY ORAM , DR DATE OF HEARING : 8 /12/ 2016 DATE OF PRONOUNCEMENT : 8 /12/ 2016 O R D E R THESE ARE APPEAL S FILED BY THE ASSESSEE AGA INST THE SEPARATE ORDER S OF CIT(A) - RANCHI , DATED 14.10.2015 , FOR THE ASSESSMENT YEAR S 2003 - 04 & 2004 - 05 . 2. IN BOTH THE APPEALS, THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY U/S.2 71(1)(C) OF THE ACT OF RS.11,1 00 / - FOR ASSESSMENT YEAR 2003 - 04 AND RS.6,000/ - FOR THE ASSESSMENT YEAR 2004 - 05. 3. I HAVE HEARD THE RIVAL SUBMISSIONS , PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. 2 ITA NOS.179 & 180/RAN/2015 ASSESSMENT YEARS :2003 - 04 & 2004 - 05 4. FOR THE ASSESSMENT YEAR 2003 - 04, THE ASSESSING OFFICER MADE AN ADDITION OF RS.40,000/ - ON ACCOUNT OF UNDISCLOSED INVESTMENT IN NSC AND RS.3846/ - AS UNDISCLOSED INTEREST THEREON. THEREAFTER, THE ASSESSING OFFICER LEVIED PENALTY U/S.271(1)(C) OF THE ACT AT RS.11,00 0/ - FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 5. ON APPEAL, LD CIT(A) CONFIRMED THE LEVY OF PENALTY ON THE GROUND THAT THE ASSESSEE HAD BANK ACCOUNT IN ALLAHABAD BANK AND THE CONTENTION OF THE ASSESSEE THAT THE HOUSE PROPERTY WAS UTILISED FOR INVES TMENT IN NSC IS NOT ACCEPTABLE AS THE ASSESSEE HAS MERELY STATED IN ITS WRITTEN SUBMISSION REGARDING INVESTMENT IN NSC BEING OUT OF HOUSE PROPERTY INCOME WITHOUT ANY CORROBORATIVE EVIDENCES BY WAY OF BANK ACCOUNT DEPOSITS TO SHOW THAT THE HOUSE PROPERTY I NCOME WAS ACTUALLY NOT UTILISED ANYWHERE ELSE. 6. BEFORE ME, LD A.R. OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND SUBMITTED THAT THE ASSESSEE EARNED HOUSE PROPERTY INCOME OF APPROXIMATELY RS.1,10,000/ - PER YEAR FROM AS SESSMENT YEAR 2000 - 2001 IS NOT IN DISPUTE. THE ONLY GROUND FOR NOT ACCEPTING THE EXPLANATION OF THE ASSESSEE FOR MAKING INVESTMENT IN NSC WAS THAT THE AMOUNT WAS NOT DEPOSITED IN THE BANK MAINTAINED BY THE ASSESSEE. HE ARGUED THAT THE HOUSE PROPERTY INCO ME WAS RECEIVED IN CASH AND OUT OF THAT INVESTMENT OF RS.40,000/ - WAS MADE IN NSC BY THE ASSES SEE. HE SUBMITTED THAT THE PLAUSIBLE EXPLANATION OF THE ASSESSEE 3 ITA NOS.179 & 180/RAN/2015 ASSESSMENT YEARS :2003 - 04 & 2004 - 05 HAS BEEN REJECTED BY THE ASSESSING OFFICER AS WELL AS LD CIT(A) WITHOUT ASSIGNING ANY REASON. HE THEREFORE, PRAYED THAT IN THE INTEREST OF JUSTICE, PENALTY SHOULD BE DELETED. 7. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 8. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT THE SUBMISSION OF THE ASSESSEE THAT I T HAS INVESTED RS.40,000/ - IN NSC OUT OF THE INCOME EARNED FROM HOUSE PROPERTY IN CASH HAS NOT BEEN ACCEPTED ONLY FOR THE REASON THAT THE INCOME EARNED FROM HOUSE PROPERTY WAS NOT DEPOSITED BY THE ASSESSEE IN THE BANK ACCOUNT. I FIND THAT THE EXPLANATION OF THE ASSESSEE TO BE A PLAUSIBLE ONE THAT INVESTMENT IN NSC WAS OUT OF THE INCOME EARNED FROM HOUSE PROPERTY. THEREFORE, I AM OF THE CONSIDERED VIEW THAT THE ASSESSEE IS NOT EXIGIBLE FOR PENALTY U/S.271(1)(C) OF THE ACT ON ACCOUNT OF FURNISHING OF INACCU RATE PARTICULARS OF INCOME. HENCE, I DELETE THE LEVY OF PENALTY OF RS.11,000/ - U/S.271(1)(C) ON INVESTMENT IN NSC OF RS.40,000/ - . 9. REGARDING LEVY OF PENALTY ON INTEREST INCOME OF RS.3846/ - EARNED ON NSC BY THE ASSESSEE, LD A.R. EXPLAINED THAT THE ASSESSEE SHOWED THE INCOME ON RECEIPT BASIS AND, THE INCOME OF THE ASSESSEE WAS ADDED ON ACCRUAL BASIS BY THE ASSESSING OFFICER. HENCE, NO PENALTY IS EXIGIBLE ON THE SAID AMOUNT AS IT CANNOT BE THE CASE OF THE REVENUE THAT THE ASSESSEE WOULD NOT HAVE DISCLOSED INTEREST INCOME OF RS.3846/ - RECEIVED BY HER. I 4 ITA NOS.179 & 180/RAN/2015 ASSESSMENT YEARS :2003 - 04 & 2004 - 05 FIND THIS EXPLANATION OF THE ASSESSEE IS A PLAUSIBLE ONE AND, THEREFORE, DELETE THE P ENALTY U/S.271(1)(C) ON THIS AMOUNT ALSO. 10. HENCE, I DELET E THE LEVY OF PENALTY OF RS.11,1 00/ - U/S.271(1)(C) OF THE ACT. 11. FOR THE ASSESSMENT YEAR 2004 - 05, REGARDING THE LEVY OF PENALTY OF RS.6,000/ - U/S.271(1)(C) OF THE ACT, I FIND THAT THE ASSESSING OFFICER FOUND THAT THERE WAS A DEPOSIT OF RS.33,000/ - IN CASH IN SAVING BANK ACCOUNT NO.11821 OF ALLAHABAD BANK HELD JOINTLY IN THE NAME OF THE ASSESSEE AS WELL AS SMT. MALA DEVI CHOUDHARY. AS NO EXPLANATION WAS FILED IN RESPECT OF THE SOURCE OF CASH DEPO SIT, H ALF OF THE AMOUNT I.E. RS.16,500 / - WAS ADDED AS UNDISCLOSED DEPOSIT IN THE HANDS OF THE ASSESSEE . SIMILARLY, INTEREST @ 9.2% ON NSC OF RS.40,000/ - AMOUNTING TO RS.3680/ - WAS ALSO ADDED AS UNDISCLOSED ACCRUED INTEREST. THEREAFTER , THE ASSESSING OFF ICER LEVIED THE PENALTY OF RS.6,000/ - U/S.271(1)(C) OF THE ACT ON ACCOUNT OF CONCEALMENT OF INCOME. 12. ON APPEAL, LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 13. BEFORE ME, IT WAS THE SUBMISSION OF LD A.R. OF THE ASSESSEE THAT THE BANK ACCOU NT NO.11821 MAINTAINED AT ALLAHABAD BANK WAS JOINTLY HELD WITH MALA DEVI CHOUDHARY, WHO I S THE FIRST ACCOUNT HOLDER. HENCE, THE DEPOSIT OF RS.33,000/ - BELONGED TO THE FIRST ACCOUNT HOLDER MALA DEVI 5 ITA NOS.179 & 180/RAN/2015 ASSESSMENT YEARS :2003 - 04 & 2004 - 05 CHOUDHARY. HE SUBMITTED THAT NO ADDITION WAS MADE IN THE HANDS OF MALA DEVI CHOUDHARY AS DEPOSIT IN THE SAID BANK ACCOUNT WAS FOUND TO BE EXPLAINED TO THE SATISFACTION OF THE ASSESSING OFFICER. HE SUBMITTED THAT THEREFORE, NO PENALTY CAN BE LEV IED ON THE ASSESSEE OF RS.16,500 ON ACCOUNT OF UNDISCLOSED DEPOSIT IN BANK ACCOUNT AND UNEXPLAINED ACCRUED INTEREST ON NSC OF RS.3,680/ - . 14 . I FIND THE EXPLANATION OF THE ASSESSEE TO BE A PLAUSIBLE ONE AS THE INVESTMENT IN ALLAHABAD BANK WAS FOUND TO BE EXPLAINED I N THE HANDS OF MALA DEVI CHOUDHARY WHO IS THE FIRST ACCOUNT HOL DER AND AS PER LAW, THE MONEY BELONG TO THE FIRST ACCOUNT HOLDER AND NO PENALTY IS TO BE LEVIED IN THE HANDS OF THE ASSESSEE. THEREFORE, IN MY CONSIDERED VIEW, THE ASSESS EE IS NOT EXIGIBLE TO P ENALTY ON THE CASH DEPOSIT OF RS.16,500/ - IN ALLAHABAD BANK. AS REGARDS THE ADDITION OF RS.3680/ - BEING ACCRUED INTEREST ON NSC OF RS.40,000/ - , I FIND THE ASSESSING OFFICER HAS ADDED THE SAME TO THE INCOME OF THE ASSESSEE FOLLOWING MERCANTILE SYSTEM OF AC COUNTING WHEREAS THE CASE OF THE ASSESSEE IS THAT IT IS FOLLOWING CASH SYSTEM OF ACCOUNTING FOR INTEREST EARNED ON NSC. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS NOT DISCLOSED THE INTEREST EARNED ON NSC OF RS.3680/ - ON RECEIPT OF THE SAME. H ENCE, THERE CAN BE NO CONCEALMENT OF INCOME OF RS.3680/ - BY THE ASSESSEE. I, THEREFORE, DELETE THE LEVY OF PENALTY ON THIS AMOUNT ALSO. HENCE , I DELETE THE PENALTY OF RS.6,000/ - U/S.271(1)(C) OF THE ACT AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 6 ITA NOS.179 & 180/RAN/2015 ASSESSMENT YEARS :2003 - 04 & 2004 - 05 15. IN THE RESULT, BOTH THE APPEAL S FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 8 /12/2016 IN THE PRESENCE OF PARTIES. SD/ - (N.S SAINI) A CCOUNTANT MEMBER RANCHI ; DATED 8 /12 /2016 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PS, ITAT, CAMP AT RANCHI 1. THE APPELLANT : KIRAN DEVI CHOUDHURY, NORTH MARKET ROAD, UPPER BAZAR, RANCHI 2. THE RESPONDENT. DCIT, CENTRAL CIRCLE - 1, RANCHI 3. THE CIT(A) RANCHI 4. CIT , RANCHI 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//