S.P.Swaqminathan, Erode V. ACIT, Coimbatore

ITA 2122/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8439 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 14-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: S SRIDHAR ERODE

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! ,% !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO. 2122/MDS/2016 ( )( / ASSESSMENT YEAR : 2009-10 S.P.SWAMINATHAN, C/O. SHRI S.SRIDHAR, ADVOCATE, 112/1, PERIYAR STREET, ERODE 638001. PAN NO. AHXPS 5015K V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE -2, COIMBATORE. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI S.SRIDHAR, ADVOCATE [ERODE] -.+,/0 / RESPONDENT BY : SHRI SUPRIYO PAL, JCIT 1 /2% / DATE OF HEARING : 09.08.2016 3') /2% / DATE OF PRONOUNCEMENT : 23.09.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A) -3, COIMBATORE DATED 23.05.2016 AND PERTAINS TO ASS ESSMENT YEAR 2009-10 CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFI CER UNDER SECTION 271 (1) (C) OF THE ACT. 2 I.T.A. NO.2122/MDS/2016 2. SHRI S.SRIDHAR, THE LEARNED COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE ASSESSING OFFICER LEVIED A PENALTY OF RS.19,89,777/ - UNDER SECTION 271(1)(C) OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE ASSESSEE WAS IN THE BUSINESS OF PLYING VEHICLES AND IN REAL ESTA TE. THE ASSESSEE CLAIMED AN EXPENDITURE OF RS.1,46,32,609/- IN RESPECT OF REAL ESTATE BUSINESS. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FI ND THAT THE EXPENDITURE CLAIMED BY THE ASSESSEE TOWARDS REAL ESTATE BUSINES S WAS VERY HIGH. ACCORDINGLY, A LUMP SUM OF RS.60,00,000/- WAS DISAL LOWED. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE EXP ENDITURE WAS DISALLOWED ON ESTIMATE BASIS. THEREFORE, THERE CANNOT BE ANY PENA LTY UNDER SECTION 271(1)(C) OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE FU RTHER SUBMITTED THAT THE PENALTY CAN BE LEVIED UNDER SECTION 271(1)(C) FOR F URNISHING INACCURATE PARTICULARS OF INCOME OR FOR CONCEALMENT OF ANY PAR T OF THE INCOME. IN THE CASE BEFORE US, ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS CONCEALED ANY PART OF THE INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE ASS ESSEE INCURRED EXPENDITURE IN REAL ESTATE BUSINESS AND THE SAME WAS CLAIMED AS DEDUCTION IN THE RETURN OF INCOME AFTER FURNISHING ALL THE PARTICULARS. THE AS SESSING OFFICER FOUND THAT THE EXPENDITURE CLAIMED BY THE ASSESSEE WAS HIGHLY EXCE SSIVE AND RESTRICTED THE EXPENDITURE BY DISALLOWING THE CLAIM OF THE ASSESSE E TO THE EXTENT OF RS.60,00,000/-. SINCE THE ASSESSEE HAS FURNISHED AL L THE PARTICULARS AND MERELY BECAUSE OF EXPENDITURE CLAIMED BY THE ASSESSEE WAS PARTLY DISALLOWED BY THE ASSESSING OFFICER, THERE CANNOT BE ANY CONCEALMENT OF INCOME OR FURNISHING 3 I.T.A. NO.2122/MDS/2016 INACCURATE PARTICULARS OF INCOME. THEREFORE, THE PE NALTY LEVIED BY THE ASSESSING OFFICER AS CONFIRMED BY CIT(A) IS NOT CORRECT. 3. THE LEARNED REPRESENTATIVE FOR THE ASSESSEE PLAC ED RELIANCE ON THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS. R ELIANCE PETROPRODUCTS (P) LTD. REPORTED IN 322 ITR 158 (SC). 4. ON THE CONTRARY, SHRI SUPRIYO PAL, THE LEARNED D EPARTMENT REPRESENTATIVE SUBMITTED THAT THE ASSESSEE CLAIMED EXPENDITURE OF RS.1,46,32,609/- FOR THE REAL ESTATE BUSINESS. THE ASSESSING OFFICER FOUND THAT THE EXPENDITURE CLAIMED BY THE ASSESSEE WAS HIGHLY EXCESSIVE AND ACCORDINGLY DISALLOWED THE PORTION OF EXPENDITURE TO THE EXTENT OF RS.60,00,000/-. THE ASSESSING OFFICER FOUND THAT THE EXPENDITURE WAS DI SALLOWED ON ESTIMATE BASIS BECAUSE THE EXACT AMOUNT COULD NOT BE QUANTIFIED. I T DOES NOT MEAN THAT THE ASSESSEE HAS NOT CONCEALED ANY PART OF THE INCOME. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT HE AGREED FOR ADD ITION BEFORE THE ASSESSING OFFICER. THEREFORE, PENALTY CANNOT BE LEVIED. AGREE MENT OR CONCESSION GIVEN BY THE ASSESSEE CANNOT BE A REASON FOR NOT LEVY OF PEN ALTY. WHEN THE ASSESSING OFFICER ESTABLISHED THAT THE ASSESSEE HAS CONCEALED PART OF THE INCOME BY CLAIMING EXCESSIVE EXPENDITURE IN REAL ESTATE BUSIN ESS, IT IS TO BE CONSTRUED THAT THE ASSESSEE HAS CONCEALED PART OF HIS INCOME. THER EFORE, THE ASSESSING OFFICER HAS RIGHTLY LEVIED THE PENALTY. HENCE, THE CIT(A) HAS RIGHTLY CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER. 4 I.T.A. NO.2122/MDS/2016 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSES SING OFFICER HAS DISALLOWED A SUM OF RS.60,00,000/- CLAIMED BY THE ASSESSEE AS EXPENDITURE IN REAL ESTATE BUSINESS AS EXCESSIVE. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS WHICH RESULTED IN UNDERSTATEMENT OF TAXABLE INCOME. THEREFORE, HE LEVIED PENALTY OF RS.19,89,77 7/-. THE FACT REMAINS IS THAT THE ASSESSEE DISCLOSED THE ENTIRE INCOME AND CLAIME D EXPENDITURE IN REAL ESTATE BUSINESS. THE EXPENDITURE CLAIMED BY THE ASS ESSEE WAS PARTLY DISALLOWED BY THE ASSESSING OFFICER. THEREFORE, THE QUESTION ARISES FOR CONSIDERATION IS WHEN THE ASSESSING OFFICER DISALLO WED PART OF THE EXPENDITURE CLAIMED BY THE ASSESSEE IN REAL ESTATE BUSINESS, CA N WE SAY THAT THE ASSESSEE CONCEALED ANY PART OF HIS INCOME OR FURNISHED INACC URATE PARTICULARS OF SUCH INCOME? THIS ISSUE WAS ELABORATELY CONSIDERED BY TH E APEX COURT IN RELIANCE PETRO PRODUCTS (P) LTD. (SUPRA) AND FOUND THAT WHEN THE ASSESSEE HAS FURNISHED ALL THE PARTICULARS OF HIS INCOME AND THE EXPENDITURE MERELY BECAUSE PART OF THE EXPENDITURE CLAIMED BY THE ASSESSEE WAS DISALLOWED, IT CANNOT BE SAID THAT THERE WAS A CONCEALMENT OF ANY INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. IN THIS CASE ALSO, THE ASSES SEE HAS FURNISHED ALL THE PARTICULARS OF HIS INCOME AND THE PART OF THE EXPEN DITURE CLAIMED BY THE ASSESSEE TO THE EXTENT OF RS.60,00,000/- WAS DISALL OWED BY THE ASSESSING OFFICER AS HIGHLY EXCESSIVE. THEREFORE, THIS TRIBUN AL IS OF THE CONSIDERED OPINION THAT THE EXPENDITURE CLAIMED BY THE ASSESSEE TOWARD S REAL ESTATE BUSINESS CANNOT BE CONSTRUED AS CONCEALMENT OF ANY INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE ASSESSEE MADE A CLAIM TO WARDS EXPENDITURE AFTER 5 I.T.A. NO.2122/MDS/2016 FURNISHING ALL PARTICULARS. THEREFORE, BY ANY STRET CH OF IMAGINATION, IT COULD BE SAID THAT THE ASSESSEE FURNISHED INACCURATE PARTICU LARS OF INCOME OR CONCEALED ANY PART OF HIS INCOME. IN OTHER WORDS, THE CLAIM M ADE BY THE ASSESSEE CANNOT BE A BASIS FOR LEVY OF PENALTY UNDER SECTION 271(1) (C) OF THE ACT. THEREFORE, THE PENALTY LEVIED BY THE ASSESSING OFFICER IS NOT JUST IFIED. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE PENALTY LEVIED BY THE ASSESSING OFFICER IS DELETED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED ON 23 RD SEPTEMBER, 2016 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 23 RD SEPTEMBER, 2016. SP. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A) 4. 1 92 /CIT, 5. 7: -2 /DR 6. ;( < /GF.