Shri Vithalbhai R.Patel, Nadiad V. The Income Tax Officer, Ward-4, Nadiad

ITA 2462/AHD/2015

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0550 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 22-07-2019
• Assessment Year: 1999-2000
• Appeal Filed On: 19-08-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Keywords: Business income; Salary income; Corroborative evidences; Revised return
• Section: 271(1)(c); 143(3); 80HHC; 148

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER &SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./I.T.A. NO. 2462/AHD/2015 ( / ASSESSMENT YEAR: 1999-00) SHRI VITHALBHAI R. PATEL DABHAN BHAGOL, NADIAD / VS. ITO WARD-4, NADIAD-387001 ./ ./PAN/GIR NO. : ADO PP1 428 N ( /APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI URVASHI SODHAN, AR / RESPONDENT BY: SHRI L. P. JAIN, SR. DR ! /DATE OF HEARING 22/07/2019 '# ! / DATE OF PRONOUNCEMENT 16/09/2019 $% /O R D E R PER AMARJIT SINGH - AM: THE APPEAL FILED BY THE ASSESSEE FOR A.Y. 1999-00, ARISE FROM ORDER OF THE CIT(A)-2, VADODARA DATED 19.05.2015, IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS FILED AGAINST THE DECISION OF THE LD. CIT(A) IN CONFIRMING THE PENALTY OF RS. 5,28,00 0/- IMPOSED U/S. 271(1)(C) ON DIFFERENT ADDITIONS MADE BY THE AO. IN THIS CASE T HE ASSESSEE HAS FILED RETURN OF INCOME ON 31.12.1999 DECLARING TOTAL INCOME AS UNDE R:- (1) SALARY : RS. 31,000/- (2) INCOME FROM PROFESSION : RS. 5,12,098/- (3) LONG TERM CAPITAL GAIN : RS. 15,830/- (4) INCOME FROM OTHER SOURCES : RS. 86,510/- LESS: DEDUCTION U/S. 80L : RS. 15,000/- TOTAL : RS. 6,31,438/- ITA NO. 2462/AHD/2015 A.Y. 1999-00 2 3. FURTHER THE ASSESSEE HAS DISCLOSED GROSS INCOME AT RS. 5,77,035/- AND AFTER CLAIMING DEDUCTION U/S. 80L FOR RS. 15,000/- THE TO TAL INCOME WAS DECLARED AT RS. 5,62,040/- INSTEAD OF AFORESAID TOTAL INCOME OF RS. 6,31,438/-. ALONG WITH THE RETURN OF INCOME THE ASSESSEE HAS ATTACHED A COPY OF FORM NO. 10CCA HOWEVER THE ASSESSEE HAS NOT CLAIMED DEDUCTION 80HHC FOR RS. 7,52,295/-. THE ASSESSEE HAS ALSO SHOWN AGRICULTURE INCOME AT RS. 76,31,343/-. THEREAFTER, A REVISED RETURN OF INCOME WAS FILED ON 18.02.2000 DECLARING TOTAL INCOME AT RS. 5,86,34 1/- INCLUDING INTEREST INCOME OF RS. 1,95,301/- EARNED ON INVESTMENT OUT OF AGRICULT URE INCOME WHICH WAS NOT DISCLOSED IN THE ORIGINAL RETURN OF INCOME. FURTHE R THE ASSESSEE HAS EXCLUDED AN AMOUNT OF RS. 1,71,000/- BEING RENT RECEIVED FROM T HE FIRM KPH INDUSTRIES/SHREE CHEM INDUSTRIES IN WHICH THE ASSESSEE WAS A PARTNER . IN THE REVISED RETURN OF INCOME THE ASSESSEE HAS SHOWN AGRICULTURE INCOME AT RS. 74 ,36,042/-. THE ASSESSEE HAS FILED ANOTHER REVISED RETURN OF INCOME ON 16.11.2000 DECL ARING TOTAL INCOME AT RS. 42,244/- AND AGRICULTURE INCOME AT RS. 76,81,582/-. IN THIS REVISED RETURN OF INCOME THE ASSESSEE HAS SHOWN BUSINESS INCOME AT LOSS OF RS. 2 9,266/-. SUBSEQUENTLY, THE AO HAS NOTICED THAT INCOME CHARGEABLE TO TAX HAS ESCAP ED WITHIN THE MEANING OF SEC. 147 THEREFORE THE NOTICE U/S. 148 WAS ISSUED ON 08.07.2 003. IN RESPONSE TO THE NOTICE U/S. 148 THE ASSESSEE HAS FILED RETURN OF INCOME ON 09.0 9.2003 DISCLOSING TOTAL INCOME AT RS. 1,76,149/- AND AGRICULTURE INCOME AT RS. 74,36, 042/-. THE HEAD WISE BREAK UP OF INCOME SHOWN IN RETURN OF INCOME FILED IN RESPONSE TO SEC. 148 ARE AS UNDER:- (1) SALARY : RS. 59,000/- (2) INCOME FROM PROPERTY : RS. 6,75,000/- (3) INCOME FROM BUSINESS : RS. (-) 76,180/- (4) LONG TERM CAPITAL GAIN : RS. 15,830/- (5) INCOME FROM OTHER SOURCES : RS. 2,85,624/- IN THIS RETURN OF INCOME THE ASSESSEE HAS ALSO CLAI MED DEDUCTION U/S. 80HHC AT RS. 7,52,295/- WHICH WAS NOT CLAIMED IN THE ORIGINAL RE TURN OF INCOME FILED BY THE ASSESSEE. THE ASSESSMENT U/S. 143(3) R.W.S. 147 OF THE ACT WAS DETERMINED AT TOTAL INCOME AT RS. 79,20,780/- AND AGRICULTURE INCOME WA S DETERMINED AT RS. 4,36,042/-. THE CLAIM OF DEDUCTION U/S. 80HHC TO THE AMOUNT OF RS. 7,52,295/- WAS DISALLOWED. 4. THE ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT (A). THE CIT(A) HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND DIRECTED THE AO TO ALLOW DEDUCTION OF RS. ITA NO. 2462/AHD/2015 A.Y. 1999-00 3 2,28,000/- BEING RENT RECEIVED FROM THE FIRM WHERE THE ASSESSEE WAS A PARTNER AND THE HOUSE PROPERTY INCOME WAS DETERMINED AT RS. 8,46,00 0/-. THE CIT(A) HAS ALSO ALLOWED DEDUCTION OF RS. 3,01,689/- OUT OF INTEREST INCOME OF RS. 3,05,502/- ON INVESTMENT OUT OF AGRICULTURE INCOME. THE CIT(A) HAS ALSO DIRECTED THE AO TO CONSIDER AGRICULTURE INCOME AT RS. 8,00,000/- AND I NCOME FROM OTHER SOURCES AT RS. 66,36,042/-. THE CIT(A) HAS ALSO CONFIRMED THE DIS ALLOWANCE OF CLAIM OF DEDUCTION U/S. 80HHC TO THE AMOUNT OF RS. 7,52,295/-. 5. THE ASSESSEE FILED APPEAL BEFORE THE ITAT. THE ITAT HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND DIRECTED THE AO TO CONSI DER RS. 8,00,000/- AS INCOME FROM OTHER SOURCES AND AMOUNT OF RS. 68,31,343/- AS AGRI CULTURE INCOME. THE AO HAS ALSO INITIATED PENALTY PROCEEDING U/S. 271(1)(C) OF THE ACT WHILE PASSING THE ORDER U/S. 147 R.W.S. 143(3) OF THE ACT. THE AO HAS STATED THAT A SSESSEE HAS CONCEALED THE INCOME TO THE TUNE OF RS. 17,78,409/- AND ITS BREAK UP IS GIV EN AS UNDER: (1) CONCEALMENT OF SALARY INCOME : RS. 27,000/- (2) DISALLOWANCE OF CLAIM OF 80HHC : RS. 7,52,295/- (3) REDUCTION OF INTEREST INCOME : RS. 95,301/- (4) INTEREST ADDITION BY ITAT : RS. 3,813/- (5) CONSIDERING AGRICULTURE INCOME AS INCOME FROM OTHER SOURCE : RS. 8,00,000/- 6. AGGRIEVED ASSESSEE HAS FILED BEFORE THE LD. CIT( A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 7. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED T HE MATERIAL ON RECORD. THE AO HAS MADE VARIOUS ADDITION IN THE ASSESSMENT COMP LETED U/S. 147 R.W.S. 143(3) OF THE ACT. ON THE QUANTUM OF ADDITION WHICH WERE SUS TAINED BY THE ITAT AS SUPRA THE AO HAS IMPOSED PENALTY TO THE AMOUNT OF RS. 5,28,00 0/- U/S. 271(1)(C) OF THE ACT. ON THE PERUSAL OF MATERIAL ON RECORD IT IS OBSERVED TH AT ASSESSEE HAS DISCLOSED ALL THE PARTICULAR PERTAINING TO HIS CLAIM OF DEDUCTION 80H HC TO THE AMOUNT OF RS. 7,52,295/- WHICH WAS NOT CLAIMED IN THE ORIGINAL RETURN OF INC OME, HOWEVER, ASSESSEE HAD FILED FORM NO. 10CCA. CONSIDERING THIS FACT WE OBSERVE T HAT CLAIMING DEDUCTION U/S 80HHC CANNOT BE TREATED AS CONCEALMENT OF INCOME AS THE ASSESSEE HAS FILED ALL THE PARTICULAR PERTAINING TO HIS CLAIM. THEREFORE, ON THIS ACCOUNT LEVYING OF PENALTY IS NOT ITA NO. 2462/AHD/2015 A.Y. 1999-00 4 CORRECT. REGARDING OTHER ADDITION PERTAINING TO ES TIMATION OF INCOME FROM OTHER SOURCES OUT OF AGRICULTURE INCOME TO THE AMOUNT OF RS. 8,00,000/- WE OBSERVE THAT THERE IS A NO CASE OF FURNISHING INACCURATE PARTICU LARS OF INCOME. THE AO HAS ALSO NOT ESTABLISHED WITH ANY RELEVANT SUPPORTING EVIDENCES THAT THERE WAS CASE OF FURNISHING ANY INACCURATE PARTICULAR INCOME IN RESPECT OF ESTI MATION OF INCOME FROM OTHER SOURCES OUT OF AGRICULTURE INCOME. THEREFORE, WE CONSIDER THAT IT IS NOT JUSTIFIED TO LEVY PENALTY ON THE AMOUNT OF RS. 8,00,000/-. SIMILARLY ON THE ADDITION IN RESPECT OF INTEREST INCOME OF RS. 1,95,307/- AND RS. 3,813/- T HE AO HAS NOT ESTABLISHED THAT THERE WAS CASE OF FURNISHING INACCURATE PARTICULAR OF INC OME SO WE CONSIDER THAT NO PENALTY IS REQUIRED TO BE LEVIED ON THE ADDITION MADE ON AC COUNT OF INTEREST EXPENSES. HOWEVER, WE OBSERVE THAT ASSESSEE HAS CONCEALED THE PARTICULAR OF INCOME FOR NOT DISCLOSING THE SALARY INCOME TO THE AMOUNT OF RS. 2 7,000/- WHICH WAS NOT SHOWN IN THE ORIGINAL RETURN OF INCOME, THEREFORE, WE CONSID ER THAT ASSESSEE HAS CONCEALED THE PARTICULAR OF INCOME IN RESPECT OF 27,000/- OF SALA RY INCOME. ACCORDINGLY, AO IS DIRECTED TO RESTRICT THE PENALTY U/S. 271(1)(C) TO THE AMOUNT OF ADDITION MADE ON ACCOUNT OF SALARY INCOME. THEREFORE, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. SD/- SD/- (MAHAVIR PRASAD) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNT ANT MEMBER AHMEDABAD: DATED 16/09/2019 TANMAY TRUE COPY / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. $ / ASSESSEE 3. &' ( / CONCERNED CIT 4. ( - / CIT (A) 5. )*+ ' , ! ' , ,-$&$ / DR, ITAT, AHMEDABAD 6. +. / / GUARD FILE. BY ORDER / $% , 0 / , ! ' , ,-$&$ 1 THIS ORDER PRONOUNCED IN OPEN COURT ON 16 /09/2019