ACIT, Coimbatore V. Shri B.Somasundaram, Coimbatore

ITA 1817/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57923 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 30-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 11-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JUNIOR
• Assessee Lawyers: S SRIDHAR ERODE
• Keywords: Assessment record
• Section: 271(1)(c); 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 1857/MDS/2011 (ASSESSMENT YEAR : 2007-08) SHRI B. SOMASUNDARAM, 13, THANGAMMAL NAGAR, MANIKARANPALAYAM, GANAPATHY, COIMBATORE. PAN : BAKPS6990L (APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE II, COIMBATORE. (RESPONDENT) I.T.A. NO. 1817/MDS/2011 (ASSESSMENT YEAR : 2007-08) THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE II, COIMBATORE. (APPELLANT) V. SHRI B. SOMASUNDARAM, 13, THANGAMMAL NAGAR, MANIAKARAMPALAYAM, GANAPATHY, COIMBATORE 641 006. (RESPONDENT) ASSESSEE BY : SHRI S. SRIDHAR (ERODE), ADVOCATE REVENUE BY : SHRI K.E.B. RENGA RAJAN, JUNIOR STANDING COUNSEL DATE OF HEARING : 30.01.2012 DATE OF PRONOUNCEMENT : 30.01.2012 I.T.A. NO. 1857/MDS/11 I.T.A. NO. 1817/MDS/11 2 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THESE ARE APPEALS OF THE ASSESSEE AND REVENUE FOR ASSESSMENT YEAR 2007-08. ASSESSEE IN HIS APPEAL AS SAILS THE ORDER OF LD. CIT(APPEALS) CONFIRMING THE ADDITIONS MADE IN THE ASSESSMENT DONE FOR THE IMPUGNED ASSESSMENT YEAR. DEPARTMENT IN ITS APPEAL FOR THE IMPUGNED ASSESSMENT YEAR ASSAILS THE ORDER OF LD. CIT(APPEALS) DELETING THE PENALTY LEVIED UNDER SEC TION 271(1)(C) OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') ON THE A SSESSEE FOR THE IMPUGNED ASSESSMENT YEAR. 2. LEARNED A.R., AT THE OUTSET, SUBMITTED THAT HE WAS WITHDRAWING APPEAL AGAINST THE ORDER OF LD. CIT(APPEALS) WITH R EGARD TO QUANTUM ASSESSMENT. THEREFORE, ASSESSEES APPEAL IN I.T.A. NO. 1857/MDS/2011 IS DISMISSED AS WITHDRAWN. 3. COMING TO DEPARTMENTS APPEAL IN I.T.A. NO. 181 7/MDS/2011, ITS GRIEVANCE IS THAT LD. CIT(APPEALS) DELETED PE NALTY OF ` 43,10,129/- LEVIED ON THE ASSESSEE FOR IMPUGNED ASS ESSMENT YEAR. AS PER REVENUE, ASSESSEE HAD MADE VOLUNTARY DISCLOS URE ON ACCOUNT OF UNSECURED LOANS TO THE TUNE OF ` 1,14,55,000/- AND I.T.A. NO. 1857/MDS/11 I.T.A. NO. 1817/MDS/11 3 ADVANCE RECEIVED ` 88,19,825/- AS HIS INCOME AND SUCH DISCLOSURE REVEALED CONSCIOUS DECISION ON THE PART OF THE ASSE SSEE TO CONCEAL TAXABLE INCOME. AS PER THE REVENUE, FILING OF REV ISED RETURN, WHICH WAS A RESULT OF DETECTION OF CONCEALMENT, DID NOT S AVE HIM FROM LEVY OF PENALTY IN VIEW OF THE DECISION OF HONBLE JURIS DICTIONAL HIGH COURT IN THE CASE OF RAVI & CO. V. ACIT (271 ITR 286). 4. SHORT FACTS APROPOS ARE THAT ASSESSEE, ENGAGED I N THE BUSINESS OF REAL ESTATE, HAD FILED HIS RETURN OF INCOME ON 6 .11.2007 ADMITTING AN INCOME OF ` 47,50,000/- FOR THE IMPUGNED ASSESSMENT YEAR. THERE WAS A SURVEY IN HIS PREMISES ON 19.11.2009 UN DER SECTION 133A OF THE ACT AND WHEN ASSESSMENT WAS COMPLETED U NDER SECTION 143(3) OF THE ACT SUBSEQUENT TO THE SURVEY, THE A.O . MADE ADDITION FOR UNSECURED LOANS OF ` 1,14,55,000/- AND A PART OF THE ADVANCES OF ` 88,19,825/- RECEIVED. AS PER THE ASSESSEE, INSOFAR AS UNSECURED LOANS WERE CONCERNED, HE HAD FILED CONFIRMATION LET TERS FROM CONCERNED PERSONS. INSOFAR AS ADVANCES WERE CONCER NED, ARGUMENT OF THE ASSESSEE WAS THAT THE PARTIES CONCERNED HAD DISPUTES WITH HIM AND WERE NOT INCLINED TO GIVE CONFIRMATIONS. ASSES SMENT AS MENTIONED WAS COMPLETED DISBELIEVING THE ABOVE ASSE RTIONS AND I.T.A. NO. 1857/MDS/11 I.T.A. NO. 1817/MDS/11 4 ADDITIONS WERE MADE. UNSECURED LOANS WERE ADDED IN FULL WHEREAS OUT OF ADVANCES, ADDITION WAS MADE ONLY FOR ` 13,49,900/-. 5. APPEAL OF THE ASSESSEE BEFORE LD. CIT(APPEALS) O N SUCH ADDITIONS DID NOT MEET WITH ANY SUCCESS, WHEREAFTER , PENALTY PROCEEDINGS WERE INITIATED. A.O. WAS OF THE OPINIO N THAT UNSECURED LOANS OF ` 1,14,55,000/- WERE CONCEALED INCOME AND THE SUM OF ` 13,49,900/- OUT OF ADVANCES ` 88,19,825/- WAS ALSO A CONCEALED INCOME. 6. IN ITS APPEAL BEFORE LD. CIT(APPEALS) AGAINST LE VY OF PENALTY, ARGUMENT OF THE ASSESSEE WAS THAT IT DID NOT CONCEA L ANY INCOME NOR DID FURNISH ANY INACCURATE PARTICULARS. ACCORDING TO ASSESSEE, IT WAS ONLY BASED ON A STATEMENT GIVEN AT THE TIME OF SURV EY, THE ADDITIONS WERE MADE AND DEPARTMENT HAD NO EVIDENCE TO TAKE A VIEW THAT THERE WAS ANY CONCEALMENT BY THE ASSESSEE. ACCORDI NG TO ASSESSEE, HE HAD PRODUCED CONFIRMATIONS FROM THE LOAN CREDITO RS DURING THE ASSESSMENT PROCEEDINGS, BUT, ASSESSING OFFICER HAD NOT ACCEPTED IT. DURING THE SURVEY, ASSESSEE HAD AGREED FOR ADDITION S ONLY AS A MEASURE OF COOPERATION WITH THE DEPARTMENT. LD. CI T(APPEALS) FOUND FROM THE ASSESSMENT RECORDS THAT ASSESSEE HA D FILED COPIES OF CONFIRMATION LETTERS FROM LOAN CREDITORS BUT, THE A SSESSING OFFICER HAD I.T.A. NO. 1857/MDS/11 I.T.A. NO. 1817/MDS/11 5 NOT GIVEN ANY OBSERVATION TO GENUINENESS THEREOF. ACCORDING TO HIM, ASSESSING OFFICER HAD NOT BROUGHT OUT ANY PARTICULA RS TO PROVE THAT THERE WAS ANY CONCEALMENT OF FURNISHING INACCURATE PARTICULARS BY THE ASSESSEE. HE, THEREFORE, DELETED THE LEVY OF PENAL TY. 7. NOW BEFORE US, LEARNED D.R. SUBMITTED THAT LEVY OF PENALTY WAS JUSTIFIED IN THE CIRCUMSTANCES OF THE CASE. ACCORD ING TO HIM, BUT FOR THE SURVEY, ASSESSEE WOULD NOT HAVE ADMITTED THE IN COME AND THE ORDERS WERE MADE BASED ON THE VOLUNTARY STATEMENT G IVEN BY THE ASSESSEE WHICH WAS NEVER RETRACTED. ASSESSEE CANNO T NOW TURN AROUND TO SAY THAT THERE WAS NO CONCEALMENT AFTER M AKING A VOLUNTARY DISCLOSURE. JUST BECAUSE CONFIRMATION L ETTERS WERE FILED, ASSESSEE COULD NOT BE ABSOLVED FROM THE RESPONSIBIL ITY OF PROVING CREDITS. 8. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. WHAT IS DISCERNIBLE FROM THE ASSESSMENT ORDER IS TH AT THE ASSESSMENT WAS BASED MAINLY ON THE STATEMENT GIVEN BY THE ASSE SSEE AT THE TIME OF SURVEY PROCEEDINGS IN HIS PREMISES UNDER SECTION 133A OF THE ACT. WHEN ASSESSEE WAS QUESTIONED AT THE TIME OF SURVEY REGARDING THE CREDIT BALANCE IN HIS BALANCE SHEET AND THE ADVANCE S REMAINING UNSETTLED IN HIS BALANCE SHEET, HE HAD REPLIED THAT THE PARTIES WERE I.T.A. NO. 1857/MDS/11 I.T.A. NO. 1817/MDS/11 6 NOT READY TO CONFIRM. IT IS ALSO A FACT THAT THE A SSESSEE DID FILE CONFIRMATIONS BEFORE THE A.O. AND THE LD. CIT(APPEA LS) HAS CLEARLY NOTED IT AFTER VERIFYING THE FILE RELATING TO THE A SSESSMENT. THE CONFIRMATIONS WERE NEVER VERIFIED BY THE A.O. IN O THER WORDS, HE SIMPLY WENT BY THE STATEMENT GIVEN BY THE ASSESSEE DURING THE TIME OF SURVEY. IN THE CASE OF CIT V. S. KHADER KHAN SO N (300 ITR 157), HONBLE JURISDICTIONAL HIGH COURT HELD THAT AN ADDI TION ON THE BASIS OF STATEMENT RECORDED DURING THE SURVEY UNDER SECTION 133A CANNOT STAND. THEIR LORDSHIP HAS OBSERVED THAT SECTION 13 3A DID NOT EMPOWER I.T. AUTHORITY TO EXAMINE A PERSON AND THE STATEMENT GIVEN DURING THE SURVEY PROCEEDINGS HAD NO EVIDENTIARY VA LUE AND ADMISSION MADE IN THE STATEMENT COULD NOT BY ITSELF BE MADE A BASIS OF ADDITION. WHEN BASED ON A SURVEY STATEMENT, ADD ITION ITSELF CANNOT BE MADE, IN OUR OPINION, THERE COULD BE NO QUESTION OF LEVY OF PENALTY AT ALL. IN THIS CASE, CONFIRMATION LETTERS PRODUCE D BY THE ASSESSEE WERE NEVER VERIFIED BY THE A.O. THE ADDITION WAS P URELY ON THE BASIS OF STATEMENT RECORDED AT THE TIME OF SURVEY PROCEED INGS AND WHEN THE ADDITION ITSELF CANNOT STAND ON STRONG LEGS, A LEVY OF PENALTY ON CONCEALMENT OR FURNISHING INACCURATE PARTICULARS CO ULD NEVER BE FASTENED ON THE ASSESSEE. LD. CIT(APPEALS) WAS WE LL JUSTIFIED IN DELETING THE LEVY OF PENALTY. I.T.A. NO. 1857/MDS/11 I.T.A. NO. 1817/MDS/11 7 9. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. 10. TO SUMMARISE THE RESULT, BOTH APPEALS OF ASSESS EE AS WELL AS REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 30 TH JANUARY, 2021. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 30 TH JANUARY, 2012. KRI. COPY TO: ASSESSEE/ASSESSING OFFICER/CIT(A)-I, COIMB ATORE/ CIT-I, COIMBATORE/D.R./GUARD FILE