P. Madhan Mohan, Erode V. ITO, Erode

ITA 2278/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6083 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-07-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 02-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASHISH TRIPATHIJCIT
• Assessee Lawyers: MRS G VARDINI KARTHIK
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Capital asset; Principle of natural justice; Reasonable cause
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI , ! ' . #$ % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.2278/MDS./2016 / ASSESSMENT YEAR : 2008-09 SRI P MADHAN MOHAN, 81,AVVAIYAR STREET, ERODE 638 001. VS. THE INCOME TAX OFFICER, WARD 1(4), ERODE. PAN AGRPM 8759 K ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : MRS.G.VARDINI KARTHIK, ADVOCATE /RESPONDENT BY : MR.ASHISH TRIPATHI,JCIT, DR / DATE OF HEARING : 21 - 09 - 2 017 / DATE OF PRONOUNCEMENT : 27 - 09 - 2017 , / 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)-3, COIMBAT ORE DATED 26.02.2016 PERTAINING TO ASSESSMENT YEAR 2008-09. ITA NO.2278/16 :- 2 -: 2. THERE WAS A DELAY OF 59 DAYS IN FILING THIS APP EAL BY THE ASSESSEE. ON PERUSING THE APPEAL, WE FIND THAT THE ASSESSEE HAD FILED THE APPEAL WITH DELAY OF 59 DAYS DATED 31.07.2016 S EEKING CONDONATION OF DELAY. THE ASSESSEE STATED IN THIS PETITION THAT THE DELAY OF 59 DAYS IN FILING THE APPEAL BEFORE THIS T RIBUNAL IS ON ACCOUNT OF MIXING UP OF PAPERS IN THE OFFICE OF ASSESSEES AUTHORISED REPRESENTATIVE AND IT TOOK TIME TO LOCATE THE SAME AND AS SOON AS LD.A.R TRACED THE RECORDS, HE FILED THE APPEAL ON 02.08.2016. WE HAVE GONE THROUGH THE REASONS ADVANCED BY THE ASSES SEE IN HIS PETITION. IN OUR OPINION, THERE EXISTS REASONABLE CAUSE FOR FILING THE APPEAL BELATEDLY. ACCORDINGLY, WE CONDONE THE DELAY OF 59 DAYS IN FILING THIS APPEAL AND ADMIT THE APPEAL FOR ADJUDIC ATION. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS F OR OUR ADJUDICATION. 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS) IS ERRONEOUS IN LAW AND OPPOSED TO THE FACTS AND CIRCUMSTANCES OF T HE CASE. 2. THE CIT(A) FAILED TO APPRECIATE THAT FACT THAT T HE ASSESSING OFFICER DID NOT INDICATE IN THE NOTICE U/S 274 OF THE ACT, WHETHER THE PENALTY PROPOSED IS FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS. 3. THE CIT(A) OUGHT TO HAVE APPRECIATED THAT THE AD DITION MADE ON ACCOUNT OF UNDISCLOSED INCOME WAS ONLY BECAUSE OF THE ASSES SING OFFICER HAS TAKEN INTO ACCOUNT THE GUIDELINE VALUE AND NOT THAT THE A PPELLANT HAS FAILED TO DISCLOSE ANY AMOUNT WITH AN INTENTION TO EVADE TAX. 4. THE CIT(A) FAILED TO APPRECIATE THE FACT THAT TH E HONBLE TRIBUNAL WHILE DECIDING THE QUANTUM APPEAL HAS GIVEN A CLEAR FINDI NG THAT SEC.69B CAN BE INVOKED BY THE ASSESSING OFFICER IN CASE WHERE THE ASSESSEE HAS RECEIVED THE ITA NO.2278/16 :- 3 -: CONSIDERATION AND NOT IN CASE THE ASSESSEE HAS PAID THE CONSIDERATION FOR ACQUIRING A CAPITAL ASSET, WHICH CLEARLY SHOWS THAT THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL TO SHOW THAT THE ASSESSEE HAS PAID MORE THAN THE AMOUNT SHOWN IN HIS BOOKS TO ALLEGE THAT THERE IS A N UNEXPLAINED INVESTMENT/UNDISCLOSED INCOME. 5. THE CIT(A) FAILED TO SEE THAT WHEN THE HONBLE T RIBUNAL AS WELL AS THE CIT(A) IN THE QUANTUM APPEAL HAS GIVEN A CLEAR FIND ING THAT THE VALUE FIXED BY THE STAMP AUTHORITIES FOR THE PURPOSE OF ASCERTA INING THE STAMP DUTY CANNOT PROVE THAT THE ASSESSEE HAD PAID ANY AMOUNT IN EXCESS OF WHAT WAS RECORDED IN THE BOOKS, LEVY OF PENALTY U/S 271(1)(C ) IS NOT VALID. 6. THE CIT(A) BLINDLY CONFIRMED THE PENALTY FAILING TO SEE THAT THE SAME WAS LEVIED WITHOUT EXAMINING OR ENQUIRING THE SELLER OF THE PROPERTY ON THE ACTUAL AMOUNT PAID BY THE ASSESSEE AND WHICH AMOUNTS TO VI OLATION OF NATURAL JUSTICE 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE HAD FILED HIS RETURN OF INCOME ON 17.03.2010 DECLARING A TOTAL IN COME OF ` 1,11,140/- AND THE ASSESSMENT WAS COMPLETED ON 30.12.2010 MAKI NG AN ADDITION OF ` 25,71,098/- AS UNEXPLAINED INVESTMENT IN THE LAND. AS THE ASSESSEE HAD FAILED TO OFFER ANY EXPLANATION WITH RESPECT TO THE SOURCE FOR ABOVE MENTIONED INVESTMENT, THE LD. ASSESSING OFFICER INI TIATED THE PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT. AGGRIEVED BY THE ORDER OF LD. ASSESSING OFFICER, THE ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A). 4.1 ON APPEAL, THE LD.CIT(A) OBSERVED THAT THE ASSESSEE IS A PURCHASER OF LAND. IN THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAS MADE ADDITION FOR UNEXPLAINED INVESTMENT IN LAND BY TAKING INTO ACCOUNT THE GUIDELINE VALUE. THE GUIDELINE VALUE IS ONLY THE BA SIS OF COMPUTATION OF CAPITAL GAINS U/S 48 AND IS DEEMED AS SALE CONSIDER ATION U/S 50C OF THE ACT. ITA NO.2278/16 :- 4 -: IN THE QUANTUM APPEAL, THE LD.CIT(A) HAS CONFIRMED THE ADDITION BY SCALING DOWN THE ADDITION OF UNEXPLAINED INVESTMENT TO ` 5,76,800/-. THE APPELLANTS CONTENTION THAT ` 5,76,800/- IS NOT UNEXPLAINED INVESTMENT AND THE AD DITION WAS ACCEPTED TO CO-OPERATE WITH THE DEPARTMENT. ANO THER GROUND IS THAT INACCURATE PARTICULARS OR CONCEALMENT IS NOT MADE O UT BY THE ASSESSING OFFICER. UNEXPLAINED INVESTMENT, OR NOT SATISFACTOR ILY EXPLAINED CLEARLY, FALL WITHIN THE MEANING OF INACCURATE PARTICULARS OF INC OME. HERE, THE FINDING OF THE FACT THAT THERE IS ` 5.76 LAKHS IS UNDISCLOSED INVESTMENT HAS BEEN CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEAL S) COIMBATORE. 4.2 BEFORE THE LD.CIT(A) RELATING TO THE PENALTY PROCEEDINGS APPEAL, THE LD.A.R SUBMITTED THE ASSESSEE CAME BEFORE THIS TRIB UNAL ON QUANTUM ADDITION OF RS.5,76,800/- IN ITA NO.732/MDS./2012 F OR ASSESSMENT YEAR 2008-09 VIDE ORDER DATED 27.02.2013 THAT THOUGH CON FIRMED THE ADDITIONS OF RS.5,76,800/-, THE TRIBUNAL OBSERVED IN PARA-8 THAT :- THERE WAS NOTHING IN THE RECORD WHATSOEVER TO SHOW THAT ASSESSEE HAD PAID ANY MONEY IN EXCESS OF WHAT WAS STATED IN THE CONVEYANCE DEED OR IN ITS CASHBOOK. ASSESSING OFFI CER HAD NOT EXAMINED THE SELLER OF THE PROPERTY OR MADE ANY OTH ER ENQUIRIES TO SUBSTANTIATE HIS FINDINGS THAT ACTUAL AMOUNT PAID BY THE ASSESSEE WAS AS PER THE VALUE FIXED BY THE STAMP AUTHORITIES . WE ARE, THEREFORE OF THE OPINION THAT CIT(A) WAS JUSTIFIED IN SCALING DOWN THE ADDITION OF ` 5,76,800/- HOWEVER, THE PENALTY LEVIED BY THE ASSESSING OFFICE R IS CONFIRMED BY THE LD.CIT(A). AGAINST THE ORDER OF LD.CIT(A), NOW THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO.2278/16 :- 5 -: 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY, THE ARGUMENT OF THE ASSESSEE BEFORE THE LD.CIT(A) WAS THAT THERE WAS NO GOOD APPROACH ROAD TO THE PROPERTY AND THERE WAS ONLY AN EIGHT FEET LANE FROM THE MAIN ROAD. AS PER THE ASSE SSEE, THE PROPERTY WAS LOCATED 250 FEET AWAY FROM THE MAIN ROAD. VALUE FI XED BY THE RDO WAS ACCEPTED BY THE ASSESSEE FOR A REASON, THAT DOCUMEN T WAS REQUIRED FOR PRESENTATION BEFORE THE BANK. ARGUMENT OF THE ASSE SSEE WAS THAT ADOPTION OF THE VALUE OF STAMP DUTY AUTHORITY COULD ONLY B E CONSIDERED FOR THE PURPOSE OF ASCERTAINING CAPITAL GAINS, UNDER SECTIO N 50C OF THE ACT. ASSESSING OFFICER HAD INVOKED SEC.69B OF THE ACT. B UT, THERE WAS NOTHING FOUND BY THE ASSESSING OFFICER TO SHOW ANY AMOUNT I N EXCESS OF THE CONSIDERATION MENTIONED IN THE DOCUMENT. ASSESSEE ALSO PRODUCED A COPY OF TRIAL BALANCE BEFORE THE CIT(A) TO SHOW THAT COST O F PROPERTY WAS DULY REFLECTED THEREIN. REMAND REPORT WAS SOUGHT BY THE CIT(A) FROM THE ASSESSING OFFICER. IN SUCH REMAND REPORT, ASSESSI NG OFFICER STATED THAT THE CASH BOOK WAS PREPARED SUBSEQUENTLY AND INVESTMENT SHOWN IN THE CASH BOOK WAS ` 5,76,800/- FOR THE SITE. AS PER ASSESSING OFFICER, BANK STATEMENT PRODUCED BY THE ASSESSEE DID NOT REFLECT THE PURCHA SE COST PAID FOR THE PLOT. LD.CIT(A) WAS OF THE OPINION THAT THERE WAS NOTHING ON RECORD TO SHOW PAYMENT OF ANY AMOUNT OVER AND ABOVE WHAT WAS RECOR DED IN THE PURCHASE DEED. NEVERTHELESS, ACCORDING TO THE LD. CIT(A), THE SUM OF ` 5,76,800/- CLAIMED BY THE ASSESSEE AS INVESTED IN THE SITE, DID NOT TALLY WITH THE BANK STATEMENT. HENCE, ACCORDING TO HIM, C ONSIDERATION PAID FOR ITA NO.2278/16 :- 6 -: PURCHASE OF PROPERTY REMAINED UNEXPLAINED, BUT THE ADDITION HAD TO BE RESTRICTED TO ` 5,76,800/-, AS RECORDED IN THE CASH BOOK OF ASSESSE E. 5.1 THE LD.CIT(A) OBSERVED THAT ONLY AN AMOUNT OF ` 5,76,800/- WAS NOT AT ALL EXPLAINED BY THE ASSESSEE TOWARDS PURCHASE O F THE PROPERTY AND HE CONFIRMED THE ADDITION OF ` 5,76,800/-, WHICH WAS CONFIRMED BY THE TRIBUNAL. HOWEVER, THERE IS NO COGENT MATERIAL TO SHOW THAT E XACT VALUE OF PROPERTY EXCEPT STAMP DUTY FIXED BY THE AUTHORITIES UNDER ST AMP ACT (RDO,STAMPS), COIMBATORE. IN SUCH CIRCUMSTANCES, THE LD.CIT(A) R EDUCED THE ADDITION TO THE EXTENT OF ` 5,76,800/- AND THIS INVESTMENT HAS NOT BEEN EXPLAIN ED BY THE ASSESSEE AS REQUIRED U/S.69B OF THE ACT. THE BURDEN CAST UPON THE ASSESSEE IS NOT AT ALL DISCHARGED, WHICH WAS CONSIDERED AS U NEXPLAINED INVESTMENT, CONSEQUENTLY PENALTY U/S.271(1)(C) IS TO BE LEVIED. BEING SO, WE DO NOT FIND ANY INFIRMITY IN IMPOSING LEVY OF PENALTY U/S.271(1 )(C) OF THE ACT AND THE SAME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED ON 27 TH SEPTEMBER, 2017, AT CHENNAI. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) % / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: 27 TH SEPTEMBER, 2017. K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 3. - 1-!' / CIT(A) 5. /23- 4 / DR 2. / RESPONDENT 4. - 1 / CIT 6. 3&-5 / GF