Sri KV Rayudu, Vijayawada V. The ACIT Circle-1(1) Vijayawada, Vijayawada

ITA 226/VIZ/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56820 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 06-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D KOMALI KRISHNA
• Assessee Lawyers: T V U B S KISHORE BABU
• Keywords: Depreciation
• Section: 40A(3)

Judgement Text

ITA NO226/VIZAG/2011 K V RAYUDU VIJAYAWADA. 1 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO. 226 /VIZAG/ 20 11 ASSESSMENT YEAR : 2006 - 07 K.V. RAYUDU VIJAYAWADA VS. ACIT CIRCLE - 1(1) VIJAYAWADA (APPELLANT) (RESPONDENT) PAN NO.AKWPK 9592K APPELLANT BY: SHRI T.V.U.B.S. KISHORE BABU RESPONDENT BY: SMT. D. KOMALI KRISHNA, SR.DR DATE OF HEAR I NG: 22.8.2011 DATE OF PRONOUNCEMENT: 05 .0 9 .2011 ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) CONFIRMING THE PENALTY LEVIED U/S 271(1)(C) OF THE I.T. ACT 2. THE FACTS IN NARROW COMPASS BORNE OUT FROM THE R ECORD ARE THAT THE PENALTY PROCEEDINGS WERE INITIATED U/S 271(1)(C) IN RESPECT OF FOLLOWING ADDITIONS: (I) DEPRECIATION ` 14,93,470/- (II) U/S 40A(3) ` 22,589/- (III)DISALLOWANCE OF EXPENDITURE ` 80,946/- UNDER WORKSHOP MAINTENANCE 3. THE ASSESSING OFFICER OBSERVED THAT THERE WAS NO COMPLIANCE TO THE PENALTY NOTICES ISSUED ON 30.12.2008 AND 10.6.2009. THE ASSESSEE HAD CLAIMED DEPRECIATION ON LORRIES TO THE EXTENT OF ` 46,05,187/- AND ON EXAMINATION OF R.C. BOOKS IT WAS OBSERVED THAT 12 O UT OF 40 LORRIES WERE REGISTERED IN THE NAME OF SMT. K. RAMA, PROPRIETRIX OF M/S. RITHVIK ITA NO226/VIZAG/2011 K V RAYUDU VIJAYAWADA. 2 ENTERPRISES. AS THE ASSESSEE WAS NOT THE REAL OWNE R OF THE LORRIES, THE DEPRECIATION CLAIMED WAS DISALLOWED. DURING THE PE NALTY PROCEEDINGS, THE ASSESSING OFFICER CONCLUDED THAT THE CLAIM OF DEPRE CIATION CONSTITUTED FURNISHING OF INACCURATE PARTICULARS OF INCOME. AS REGARDS THE DISALLOWANCE OF ` 80,946/- MADE ON THE GROUND THAT VOUCHERS WERE EIT HER SELF-MADE OR UNVERIFIABLE, THE ASSESSING OFFICER CONCLUDED THAT IN THE ABSENCE OF ANY REPLY TO A SHOW CAUSE NOTICE ISSUED, THE ABOVE DISALLOWAN CE ALSO WAS DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED AS PER EXPLANATION 1 TO SECTION 271(1)(C). IN THE ABSE NCE OF PROPER DEFENSE, THE ASSESSING OFFICER HAS LEVIED THE PENALTY U/S 271(1) (C) OF THE ACT AT ` 5,52,951/-. 4. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT( A) BUT THE ASSESSEE DID NOT FIND FAVOUR WITH HIM. 5. NOW THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE US WITH THE SUBMISSION THAT THE ADDITION OF THE QUANTUM ON WHIC H PENALTY WAS LEVIED WAS NOT CHALLENGED BY THE ASSESSEES IN ORDER TO BUY PEA CE WITH THE DEPARTMENT. BUT SO FAR AS PENALTY PROCEEDINGS ARE CONCERNED, TH E ASSESSEE WAS NOT ALLOWED SUFFICIENT OPPORTUNITY TO DEFEND HIS CASE. EVEN THE CIT(A) DID NOT EXAMINE THE CASE ON MERIT AND HAS CONFIRMED THE PEN ALTY. WITH REGARD TO THE ADDITION ON ACCOUNT OF DEPRECIATION, THE LD. CO UNSEL FOR THE ASSESSEE HAS CONTENDED THAT THOUGH THE VEHICLES WERE REGISTERED IN THE NAME OF SMT. K. RAMA, PROPRIETRIX OF M/S. RITHVIK ENTERPRISES BUT T HE ENTIRE FINANCE ON THE VEHICLES WERE REPAID BY THE ASSESSEE ITSELF. THERE FORE, FOR THE SIMPLE REASON THAT THE VEHICLES WERE NOT REGISTERED IN THE NAME O F THE ASSESSEE, THE PENALTY U/S 271(1)(C) CANNOT BE LEVIED. 6. THE LD. D.R. ON THE OTHER HAND HAS SUBMITTED THA T THE ASSESSEE HAS NOT FILED ANY EVIDENCE EITHER BEFORE THE A.O. OR TH E CIT(A) IN SUPPORT OF HIS CONTENTIONS THAT THE ENTIRE FINANCE ON THE IMPUGNED VEHICLES WERE REPAID BY THE ASSESSEES ITSELF. THE LD. D.R. FURTHER CONTEND ED THAT THE PENALTY ITA NO226/VIZAG/2011 K V RAYUDU VIJAYAWADA. 3 PROCEEDINGS ARE INDEPENDENT PROCEEDINGS AND THE ASS ESSEE CAN PUTFORTH HIS COMPLETE DEFENSE BEFORE THE ASSESSING OFFICER DURIN G THE PENALTY PROCEEDINGS AND THE A.O. IS REQUIRED TO ADJUDICATE IT INDEPENDE NTLY. BUT IN THE INSTANT CASE, THE ASSESSEE HAS NOT PLACED ANY EVIDENCE EITH ER BEFORE THE A.O. OR BEFORE THE CIT(A) IN SUPPORT OF HIS CONTENTIONS. T HEREFORE, THE CIT(A) WAS JUSTIFIED IN CONFIRMING THE LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT. 7. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CA REFUL PERUSAL OF THE ORDER OF THE LOWER AUTHORITIES, WE FIND THAT THE AD DITIONS MADE BY THE A.O. WERE NOT CHALLENGED BY THE ASSESSEE. NOT ONLY THAT , THE ASSESSEE DID NOT PRODUCE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CONTENTION THAT THE FINANCE ON LORRIES WERE REPAID BY THE ASSESSEE BEFO RE THE ASSESSING OFFICER. EVEN BEFORE THE CIT(A), NO EVIDENCE IN THIS REGARD WAS FURNISHED. THE LD. COUNSEL FOR THE ASSESSEE SIMPLY ARGUED THAT CIT HAS NOT ADJUDICATED THE APPEAL ON MERIT. DURING THE COURSE OF HEARING, A S PECIFIC QUERY WAS RAISED FROM THE LD. COUNSEL FOR THE ASSESSEE THAT CIT(A) H AS GIVEN FOUR HEARINGS TO THE ASSESSEE AND WHAT EVIDENCE WAS FILED BEFORE THE CIT(A) IN SUPPORT OF HIS CONTENTIONS THAT THE FINANCE ON THE LORRIES WHICH W ERE REGISTERED IN THE NAME OF SMT. K. RAMA, PROPRIETRIX OF M/S. RITHVIK ENTERP RISES WAS IN FACT REPAID BY THE ASSESSEES. THE LD. COUNSEL FOR THE ASSESSEE CO ULD NOT STATE AS TO WHAT EVIDENCE WAS FILED BEFORE THE CIT(A). MOREOVER, NO EVIDENCE IN SUPPORT OF THESE CONTENTIONS WERE PLACED BEFORE US ALSO. HE H AS SIMPLY ARGUED THAT THE MATTER MAY BE REMANDED BACK TO THE A.O. OR CIT(A) T O RE-ADJUDICATE THE PENALTY PROCEEDINGS ON MERIT. 8. WE DO NOT FIND MERIT IN THE CONTENTION OF THE AS SESSEE AS NO EVIDENCE IN SUPPORT OF THIS ASSERTION IS PLACED BEFORE US. IT IS A SETTLED POSITION OF LAW THAT PENALTY PROCEEDINGS ARE INDEPENDENT PROCEEDING S. IF THE ASSESSEE FAILED TO DEMONSTRATE HIS CASE IN ASSESSMENT PROCEEDINGS, HE CAN PLACE THE RELEVANT EVIDENCE BEFORE THE ASSESSING OFFICER IN PENALTY PR OCEEDINGS TO JUSTIFY HIS CLAIM. IN CASE HE FAILS TO PRODUCE BEFORE THE A.O. , HE CAN FILE BEFORE THE CIT(A). BUT IN THE INSTANT CASE, NO EVIDENCE WAS F ILED IN SUPPORT OF HIS CONTENTIONS BY THE ASSESSEE EITHER BEFORE THE A.O. OR THE CIT(A). EVEN ITA NO226/VIZAG/2011 K V RAYUDU VIJAYAWADA. 4 BEFORE US, NOTHING WAS FILED BY THE ASSESSEE IN SUP PORT OF HIS CONTENTION. ONLY ORAL ARGUMENTS ARE RAISED WHICH CANNOT BE RELI ED ON FOR GRANTING A RELIEF TO THE ASSESSEES. SIMILAR WAS THE POSITION OF OTHE R ADDITION OF ` 80,946/- AND ` 22,589/- AS NO EVIDENCE IS PLACED BEFORE US TO JUS TIFY THE CLAIM. SINCE THE ASSESSEE IS BADLY FAILED TO JUSTIFY HIS CLAIM, WE F IND NO INFIRMITY IN THE ORDER OF THE CIT(A), WHO HAS PROPERLY ADJUDICATED THE ISSUE IN THE LIGHT OF WRITTEN SUBMISSIONS FILED BEFORE HIM. WE THEREFORE, CONFIR M HIS ORDER. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 05.09.2011 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 05 TH SEPTEMBER, 2011 COPY TO 1 SRI K.V. RAYUDU, DR.NO.40 - 25 - 19/BT, FLAT NO.401, ANNAPURNA TOWERS, PATAMATALANKA, VIJAYAWADA-520 010. 2 ACIT, CIRCLE - 1(1), VIJAYAWADA 3 THE CI T, VIJ AYAWADA 4 THE CIT (A) , VIJAYAWADA 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM