Yadlapalli kalisree, Eluru V. THE ITO, WARD - 1, Eluru

ITA 234/VIZ/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0177 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2002-2003
• Appeal Filed On: 04-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A NARAYANA RAO
• Keywords: Unexplained investment; Bonafide belief
• Section: 143(3); 133A; 69; 148

Judgement Text

ITA NO.234/VIZAG/2013 YADLAPALLI KALISREE, ELURU 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , . . . . , $ $ $ $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.234/VIZAG/2013 ( / ASSESSMENT YEAR : 2002-03 ) YADLAPALLI KALISREE ELURU VS. ITO WARD - 1 ELURU [ PAN: AAVPK 2058N ] ( & & & & / APPELLANT) ( '(& '(& '(& '(& / RESPONDENT ) & ) / APPELLANT BY : SHRI G.V.N. HARI, AR '(& ) / RESPONDENT BY : SHRI A. NARAYANA RAO, DR ) - / DATE OF HEARING : 16.11.2015 ) - / DATE OF PRONOUNCEMENT : 11.12.2015 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF CIT(A)-11, MUMBAI, CAMP VISAKHAPATNAM DATED 22.2.2013 FOR THE ASSESSMENT YEAR 2002-03. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS IN THE B USINESS OF BROKERAGE AND COMMISSION. A SURVEY U/S 133A OF THE INCOME-TA X ACT, 1961 ITA NO.234/VIZAG/2013 YADLAPALLI KALISREE, ELURU 2 (HEREINAFTER CALLED AS THE ACT) WAS CONDUCTED ON 30.11.2015 IN THE PREMISES OF M/S. LAKSHMI MIRROR INDUSTRIES, ELURU. DURING THE SURVEY IT WAS NOTICED THAT THE ASSESSEE MADE INVESTMENTS IN T HE NAME OF THE FIRM, FROM TIME TO TIME AND THAT SHE WAS NOT FILING THE RETURN OF INCOME. SUBSEQUENTLY, A NOTICE U/S 148 OF THE ACT WAS ISSUE D AND ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 147 OF THE ACT. IN THE ASSESSMENT ORDER, THE A.O. HAS OBSERVED THAT THE ASSESSEE HAS PURCHASED 2.5 ACRES OF AGRICULTURAL LAND FOR RS.1,65,000/- AND PAID STA MP DUTY OF RS.18,200/-. THUS, THE TOTAL INVESTMENT MADE IS RS .1,83,200/-. THE ASSESSEE WAS ASKED SPECIFICALLY TO EXPLAIN THE SOUR CE OF INVESTMENT IN AGRICULTURAL LAND AND ALSO EXPLAIN THE NATURE OF BR OKERAGE AND COMMISSION AND DETAILS THEREOF. 3. THE ASSESSEE IN HER EXPLANATION SUBMITTED BEFORE THE A.O. THAT SHE HAD RECEIVED 2 ACRES OF AGRICULTURAL LAND, 20 S OVEREIGNS OF GOLD AND 5 KGS. OF SILVER ARTICLES AS STRIMULADHANAM AT THE TIME OF HER MARRIAGE THAT TOOK PLACE IN THE YEAR 1998 WITH SRI Y. SUBBA RAO. THE ASSESSEE EXPLAINED THAT THE SOURCE OF INVESTMENT IS OUT OF A GRICULTURAL INCOME ACCUMULATED YEAR AFTER YEAR. HOWEVER, THE A.O. HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT ADMITTED ANY AGRICULTURAL INCOME IN HER RETURN FOR A.Y. 2002-03. THUS, ITA NO.234/VIZAG/2013 YADLAPALLI KALISREE, ELURU 3 HE CAME TO A CONCLUSION THAT THE AMOUNT OF RS.1,83, 200/- IS AN UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. ACCORDI NGLY, THE SAME IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ORDER OF THE A.O. ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE IT AT. THE ITAT IN ITS ORDER VIDE ITA NO.193/VIZAG/2010 DATED 8.10.2010 HA S CONSIDERED THE ISSUE AND RELIEF WAS GRANTED TO THE EXTENT OF RS.50 ,000/- AND REMAINING BALANCE OF RS.1,33,200/- WAS CONFIRMED. SUBSEQUENT LY, THE A.O. HAS INITIATED THE PENALTY PROCEEDINGS BY ISSUING A SHOW CAUSE NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT DATED 29.12.2006 IN RE SPONSE TO THE NOTICE, THE ASSESSEE HAS REITERATED THE SUBMISSIONS WHICH S HE HAS MADE BEFORE THE A.O. AND SUBMITTED THAT PENALTY MAY BE DELETED. HOWEVER, THE A.O. HAS NOT ACCEPTED THE EXPLANATIONS OF THE ASSESSEE O N THE GROUND THAT THERE IS NO EVIDENCE FOR ACCUMULATION OF THE AGRICU LTURAL INCOME AND ALSO NO EVIDENCE IN RESPECT OF 2 ACRES OF AGRICULTURAL L AND RECEIVED AS STRIMULADHANAM. ACCORDINGLY, PENALTY IS LEVIED. O N APPEAL, THE LD. CIT(A) HAS CONFIRMED THE PENALTY ORDER PASSED BY TH E A.O. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE T HE TRIBUNAL. ITA NO.234/VIZAG/2013 YADLAPALLI KALISREE, ELURU 4 5. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE ASSESSEE NEITHER CONCEALED INCOME NOR FILED INACCURATE PARTI CULARS AND SUBMITTED THAT PENALTY MAY BE DELETED. 6. ON THE OTHER HAND, THE LD. D.R. HAS STRONGLY SUP PORTED THE ORDER PASSED BY THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE RECORDS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN THIS CASE THE PENALTY WAS IMPOSED BY THE ASSESSEE ON THE GROUND T HAT THE ASSESSEE HAS PURCHASED AN AGRICULTURAL LAND OF 2.5 ACRES FOR RS.1,65,000/- AND STAMP DUTY IS RS.18,200/-. THE A.O. HAS ASKED THE EXPLANATION FROM THE ASSESSEE AND IT WAS SUBMITTED BEFORE THE A.O. BY TH E ASSESSEE THAT AT THE TIME OF MARRIAGE, SHE HAS RECEIVED AN AGRICULTU RAL LAND TO THE EXTENT OF 2 ACRES, 20 SOVEREIGNS OF GOLD AND 5 KGS. OF SIL VER ARTICLES AS STRIMULADHANAM. HOWEVER, SHE IS NOT ABLE TO ESTABL ISH THAT THE INVESTMENT MADE BY THE ASSESSEE TO PURCHASE 2.5 ACR ES OF AGRICULTURAL LAND WAS OUT OF ACCUMULATED AGRICULTURAL INCOME. A CCORDINGLY, ADDITION WAS MADE U/S 69 OF THE ACT. THE LD. CIT(A) CONFIRM ED THE SAME. HOWEVER, ITAT HAS GRANTED RELIEF TO THE EXTENT OF R S.50,000/- AND REMAINING BALANCE WAS CONFIRMED. THEREAFTER THE A. O. HAS INITIATED THE PENALTY PROCEEDINGS AND SHOW CAUSE NOTICE WAS ISSUE D. THE ASSESSEE ITA NO.234/VIZAG/2013 YADLAPALLI KALISREE, ELURU 5 HAS EXPLAINED IN DETAIL THAT THE SOURCE OF INVESTME NT WAS STRIMULADHANAM RECEIVED BY THE ASSESSEE AT THE TIME OF HER MARRIAGE IN THE YEAR 1988. HOWEVER, SHE WAS NOT ABLE TO ESTABL ISH THE DOCUMENTARY EVIDENCE THAT SHE HAS RECEIVED 2 ACRES OF AGRICULTU RAL LAND AND ACCUMULATED AGRICULTURAL INCOME. THEREFORE, THE A. O. HAS LEVIED PENALTY U/S 271(1)(C) OF THE ACT. THE SAME WAS CONFIRMED B Y THE LD. CIT(A). 8. WE FIND THAT THE ASSESSEE DURING THE COURSE OF AS SESSMENT PROCEEDINGS GAVE A DETAILED EXPLANATION FOR THE SOU RCE OF INVESTMENT IN THE AGRICULTURAL LAND. EVEN DURING THE COURSE OF P ENALTY PROCEEDINGS ALSO, THE SAME WAS EXPLAINED BEFORE THE A.O. THE A .O. WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND LEVIED THE PENALTY, ON ACCOUNT OF NOT SUBSTANTIATING THE EXPLANATION OF TH E ASSESSEE. HOWEVER, AFTER CAREFUL CONSIDERATION OF THE PENALTY ORDER AS WELL AS CIT(A) ORDER, IT IS NOT THE CASE FOR THE AUTHORITIES BELOW THAT T HE EXPLANATION GIVEN BY THE ASSESSEE IS NEITHER FALSE NOR BONAFIDE. 9 . IN THE SIMILAR CIRCUMSTANCES, HONBLE MADRAS HIGH C OURT IN THE CASE OF NAVIN CHEMICALS MANUFACTURING AND TRADING C O. (P) LTD. VS. CIT 259 ITR 111 HAS OBSERVED THAT SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961, IN ITS EXPLANATION REFERS TO THE EXPLANA TION OFFERED BY THE PERSON BEING FOUND TO BE FALSE OR NOT BEING ONE WHI CH THE PERSON ITA NO.234/VIZAG/2013 YADLAPALLI KALISREE, ELURU 6 OFFERING THE EXPLANATION IS ABLE TO SUBSTANTIATE. THE CONSIDERATION OF THE EXPLANATION OFFERED IS, THEREFORE, A DUTY CAST UPON THE OFFICER IMPOSING PENALTY. IN THE ABSENCE OF SUCH CONSIDERATION AND THE FINDING THAT THE EXPLANATION IS FALSE OR THAT THE ASSESSEE HAD FAILE D TO SUBSTANTIATE THE EXPLANATION OFFERED, THE OFFICER CANNOT PROCEED TO HOLD THAT THERE HAS BEEN CONCEALMENT OF INCOME ATTRACTING LEVY OF PENAL TY. IN THE PRESENT CASE, THE ASSESSEE HAS GIVEN A DETAILED EXPLANATION BEFORE THE A.O. EXPLAINING THE REASONS AND BONAFIDE BELIEF OF THE A SSESSEE, THE A.O. WITHOUT EXAMINING THE EXPLANATION, SIMPLY LEVIED TH E PENALTY U/S 271(1)(C) OF THE ACT. THE SAME IS CONFIRMED BY LD. CIT(A). IN VIEW OF THE LAW LAID DOWN BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF NAVIN CHEMICALS (SUPRA), WE ARE OF THE OPINION THAT THIS IS NOT A FIT CASE TO IMPOSE PENALTY U/S 271(1)(C) OF THE ACT. ACCORDING LY, WE DELETE THE PENALTY IMPOSED BY THE A.O. 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11 TH DEC15. SD/- SD/- ( . . . . ) ( . ) ( G. MANJUNATHA) ( (( ( V. DURGA RAO ) )) ) / // / ACCOUNTANT MEMBER / // / JUDICIAL MEMBER /VISAKHAPATNAM: 3 / DATED : 11.12.2015 VG/SPS ITA NO.234/VIZAG/2013 YADLAPALLI KALISREE, ELURU 7 ) ' 4 / COPY OF THE ORDER FORWARDED TO :- 1. & / THE APPELLANT YADLAPALLI KALISREE, D.NO.3B-2-50, NEAR AMBICA THEATRE, WESTERN STREET, ELURU, W.G. DIST., A.P . 2. '(& / THE RESPONDENT ITO WARD-1, ELURU 3. 5 / THE CIT, RAJAHMUNDRY 4. 5 () / THE CIT(A)-11, MUMBAI, CAMP VISAKHPATNAM. 5. ' , , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE / BY ORDER // TRUE COPY // 9: ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM