M/s. Godwin Maria Visuvasam, CHENNAI V. ITO, Coimbatore

ITA 1911/CHNY/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8918 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 21-06-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 31-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DURAI
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , . ! '# BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.1911/MDS./2013 / ASSESSMENT YEAR :2006-07 SHRI A.GODWIN MARIA VISUVASAM , 4/1,DHAMU NAGAR, KONDASAMY STREET, PULIAKULAM, COIMBATORE 641 045. VS. THE INCOME TAX OFFICER, WARD II(5), COIMBATORE. [PAN AEFPV 0151 A ] ( $% / APPELLANT) ( &'$% /RESPONDENT) / APPELLANT BY : MR.S.SRIDHAR,ADVOCATE /RESPONDENT BY : MR.DURAIPANDIAN,D.R / DATE OF HEARING : 21 - 06 - 201 6 !' / DATE OF PRONOUNCEMENT : 06 - 07 - 2016 ( / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, COIMBATORE DATED 19.09.2013 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AT ` 2,13,792/-. ITA NO.1911/MDS./2013 :- 2 -: 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF EXECUTING CIVIL CONTACT WOKS AND FOR ASSESSMENT YEAR 2006-07, ASSESSEE FILED THE RETURN OF INCOME ON 11.09.2006 SHOWING A TOTAL INCOME OF ` 1,97,415/-.THE SAID RETURN WAS ORIGINALLY PROCESSED U/S.143(1) OF THE ACT. LATER, THE ASSESSMENT WAS FRAMED U/S.143(3) OF THE ACT ON 31.12.2008 AND THE TOTAL INCOME WAS COMPUTED AT ` 33,21,420/-. WHILE COMPLETING THE ASSESSMENT, THE AO MADE THE FOLLOWING ADDITIONS. A) DISALLOWANCE OF SUNDRY CREDITORS 14,00,000/- B) DISALLOWANCE OF LOAN CREDITORS 10,00,000/- C) EXCESS CLAIM OF DEPRECIATION 99,000/- D) AGRICULTURAL INCOME 1,25,000/- E) CONSULTANCY CHARGES 5,00,000/- AGGRIEVED, THE ASSESSEE CARRIED THE APPEAL BEFORE T HE LD.CIT(A). ON APPEAL, THE LD.CIT(A) ON APPEAL, LD.CIT(A) HAD PART LY GRANTED RELIEF RESULTING IN THE PROCESS FOLLOWING ADDITIONS WERE S USTAINED. A) SUNDRY CREDITOR-M/S.SABARI COTTAGE IND. 1,67,001 /- B) LOAN CREDITOR MRS.MALLIGA 1,00,000/- C) LOAN CREDITOR MRS.RADHAMANI 2,00,000/- D) LOAN CREDITOR MR.VELUMANI 1,65,000/- E) AGRICULTURAL INCOME 1,25,000 /- THE LD.CIT(A) CONFIRMED ADDITION TO THE EXTENT OF ` 1,67,001/- ON ACCOUNT OF SUNDRY CREDITORS, BY HOLDING THAT THE PA RTY VIZ. M/S.SABARI COTTAGE INDUSTRY FAILED TO RESPOND TO THE SUMMONS I SSUED WHICH PUTS A DOUBT ON THE GENUINENESS OF THE TRANSACTION. AFTE R THE FIRST APPELLATE ITA NO.1911/MDS./2013 :- 3 -: ORDER, THE ITO INITIATED THE PENALTY PROCEEDINGS U/ S.271(1)(C) OF THE ACT AND THE PENALTY WAS IMPOSED FOR WANT OF EXPLAN ATION RESULTING IN AOS DECISION TO CONCLUDE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME WITHIN THE SCOPE O F SEC.271(1)(C) OF THE ACT. ON APPEAL, THE CIT(A) CONFIRMED THE LEVY O F PENALTY U/S.271(1)(C) OF THE ACT. AGAINST THIS, THE ASSESSE E IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, ADMITTEDLY THE ADDITION WAS S USTAINED BY FIRST APPELLATE AUTHORITY IN RESPECT OF FOLLOWING: A) SUNDRY CREDITOR-M/S.SABARI COTTAGE IND. 1,67,001 /- B) LOAN CREDITOR MRS.MALLIGA 1,00,000/- C) LOAN CREDITOR MRS.RADHAMANI 2,00,000/- D) LOAN CREDITOR MR.VELUMANI 1,65,000/- E) AGRICULTURAL INCOME 1,25,000/- TOTAL 7,57,001/- THE CIT(A) CONFIRMED EACH OF THE ABOVE ADDITION BY OBSERVING AS FOLLOWS:- I) M/S.SABARI COTTAGE INDUSTRIES ` `` ` 1,67,001/-: M/S.SABARI COTTAGE INDUSTRY FAILED TO RESPOND TO TH E SUMMONS ISSUED. THE GENUINENESS OF THE TRANSACTION WAS DOUB TED BY THE AO. II) MRS.MALLIGA - ` `` ` 1,00,000/-: SUMMONS ISSUED, RETURN WAS UN-SERVED. THE PARTY HA S GIVEN A CONFIRMATION LETTER STATING THAT OUT OF BALANCE OF ` 3,06,666/-, ITA NO.1911/MDS./2013 :- 4 -: OUTSTANDING IS AT ` 2,06,666/- REPRESENTS THE AMOUNT DUE FROM THE ASSESSEE AND ` 1 LAKH ADJUSTED TOWARDS ADVANCE GIVEN TO THE ASSESS EE FOR REPAIRING THE HOUSE. III) MRS.RADHAMANI- ` `` ` 2,00,000/-: IN RESPECT OF SUMMONS, HER HUSBAND VELUMANI APPE ARED AND CONFIRMED THE TRADE CREDIT OF ` 2,25,946/- AND DENYING HAVING GIVEN ANY ADVANCE TOWARDS CONSTRUCTION. HENCE, THE ADDIT ION WAS CONFIRMED, THOUGH THE ASSESSEE MADE A PLEA THAT ` 1 LAKH TOWARDS HOUSE ADVANCE, WHICH WAS NOT REPAID BY ASSESSEE AS ON DATE. IV) MR.VELUMANI - ` `` ` 1,65,000/-: THE LD.A.R SUBMITTED BEFORE THE LOWER AUTHORITIE S THAT IT REPRESENTS ADVANCE TOWARDS PLOT AND IT WAS WRONGLY STATED BY THAT PARTY THAT ` 1,65,000/- HAS BEEN WRONGLY STATED AS ADVANCE ADJUS TED IN DECEMBER, 2005. ACCORDING TO LOWER AUTHORITIES, SIN CE IT WAS ADJUSTED IN DECEMBER, 2005, NO BALANCE WAS OUTSTANDING AS ON 31.03.2006 AND THE EXPLANATION GIVEN BY THE LD.A.R WAS NOT SUPPORT ED WITH THE FACTS. THEREFORE, ADDITION WAS MADE. V) AGRICULTURAL INCOME - ` `` ` 1,25,000/-: THE ASSESSEE STATED THAT ASSESSEE OWNS NO AGRICU LTURAL LAND. 4.1 IN THIS CASE, THAT LAND BELONGS TO ASSESSEES FATHER-IN-LAW AND THIS AGRICULTURAL INCOME WAS EARNED FROM AGRICULTUR AL OPERATIONS FROM ITA NO.1911/MDS./2013 :- 5 -: THE SAID LAND AND IT CANNOT BE TREATED AS INCOME FR OM OTHER SOURCES. GOING BY THE ABOVE FACTS OF THE CASE, WE ARE OF THE OPINION THAT THE ASSESSEE HAD GIVEN A BONA FIDE EXPLANATION AND THE DEPARTMENT HAS NOT BROUGHT ANY MATERIAL TO SHOW THAT THE EXPLANATI ON WAS BOGUS OR FALSE. 4.2 REGARDING ADDITION U/S.68 OF THE ACT, WHICH WAS CONFIRMED BY THE TRIBUNAL BECAUSE OF UNSATISFACTORY EXPLANATION GIVEN BY THE ASSESSEE IN SUPPORT OF SUCH CREDIT, BUT IT IS NOT A GOOD CASE FOR IMPOSITION OF PENALTY, SINCE IT RELATES TO LACK OF TENDERING EXPLANATION TO THE SATISFACTION OF THE LD. ASSESSING OFFICER AN D NOT DISPROVING THE CONTENTION OF THE ASSESSEE WITH REGARD TO THE GENUI NENESS OF THE RECEIPTS. AS HELD BY THE CALCUTTA HIGH COURT IN TH E CASE OF DURGA KAMAL RICE MILLS VS. CIT REPORTED IN [2004] 265 ITR 025 RELYING ON M/S.NATIONAL TEXTILES REPORTED IN [2001]249 ITR 125 (GUJ.), THERE IS A DIFFERENCE IN FACTS NOT PROVED AND FACTS DISPRO VED. IT IS FURTHER HELD THAT PENALTY CAN BE LEVIED ONLY FOR THE LATTER . SIMILAR VIEW HAS BEEN TAKEN IN CIT V. VIDYAGAURI NATVERLAL & ORS., R EPORTED IN [1999] 153 CTR 546 (GUJ). BEING SO, IN THE PRESENT CASE, THE EXPLANATION GIVEN BY THE ASSESSEE NOT DISPROVED BY THE LD. ASSE SSING OFFICER, AS SUCH THERE IS NO CONCLUSIVE EVIDENCE TO SHOW THAT A SSESSEE HAS CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCU RATE PARTICULARS OF INCOME. ITA NO.1911/MDS./2013 :- 6 -: 4.3 FURTHER REGARDING AGRICULTURAL INCOME, THE ASSE SSEE MADE AN HONEST PLEA THAT ASSESSEE DOES NOT OWN ANY AGRICULT URAL LAND. IT HAS EARNED FROM THE AGRICULTURAL LAND OWNED BY ASSESSEE S FATHER-IN-LAW. THERE IS NO MATERIAL BROUGHT ON RECORD TO SHOW THAT IT IS BOGUS OR FALSE. BEING SO, WE FIND NO REASON TO LEVY OF PENAL TY U /S.271(1)(C) OF THE ACT, EVEN ON THIS DISCREPANCY. WE ARE INCLINED TO DELETE THE PENALTY IN THIS CASE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED ON 06 TH JULY, 2016, AT CHENNAI. SD/ - SD/ - ( . ) ( G.PAVAN KUMAR ) ! / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 06 TH JULY, 2016 K S SUNDARAM &'(()*( +* / COPY TO: ( 1 . / APPELLANT 3. ( ,(- . / CIT(A) 5. */0 (1 / DR 2. / RESPONDENT 4. ( , / CIT 6. 02(3 / GF