P. Elizebeth, CHENNAI V. ITO, CHENNAI

ITA 2547/CHNY/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4003 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 31-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAHADEVAN JCIT
• Assessee Lawyers: N QUADIR HOSEYN; L NATARAJAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , .. ' #$, & '( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.2547/MDS/2016 * +* / ASSESSMENT YEAR : 2009-10 SMT. P. ELIZABETH, NO.1, LEITH CASTLE ROAD, SANTHOME, CHENNAI - 600 028. PAN : AAMPE 0025 F V. THE INCOME TAX OFFICER, BUSINESS WARD - 1(1), CHENNAI - 600 034. (-./ APPELLANT) (/0-./ RESPONDENT) -. 1 2 / APPELLANT BY : SHRI N. QUADIR HOSEYN, ADVOCATE & SHRI L. NATARAJAN, CA /0-. 1 2 / RESPONDENT BY : SHRI B. SAHADEVAN, JCIT ' 1 3& / DATE OF HEARING : 02.11.2016 45+ 1 3& / DATE OF PRONOUNCEMENT : 23.11.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 2, CHENN AI, DATED 27.06.2016 AND PERTAINS TO ASSESSMENT YEAR 2009-10. 2. SHRI N. QUADIR HOSEYN, THE LD.COUNSEL FOR THE AS SESSEE, SUBMITTED THAT THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 2 I.T.A. NO.2547/MDS/16 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'TH E ACT'). DURING THE YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER FOU ND THAT THE ASSESSEE HAS PURCHASED PROPERTY FOR ` 75,00,000/-. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT A SUM OF ` 70.5 LAKHS WAS RECEIVED AS LOAN FROM 7 RELATIVES. ACCORDING TO TH E LD. COUNSEL, THE ASSESSEE HAS ALSO CLAIMED THAT JEWELS TO THE EXTENT OF ` 5.52 LAKHS WAS SOLD. THE ASSESSEE HAS FILED NOTORISED AFFIDAV IT IN SUPPORT OF THE LOAN TAKEN FROM THE RELATIVES / FAMILY MEMBERS. THE ASSESSING OFFICER FOUND THAT THE SOURCE OF INVESTMENT TO THE EXTENT OF ` 6.75 LAKHS REMAINS UNEXPLAINED. ACCORDING TO THE LD. CO UNSEL, THE ASSESSING OFFICER HAS NOT FOUND THAT THE ASSESSEE H AS CONCEALED ANY PART OF INCOME OR FURNISHED INACCURATE PARTICUL ARS. THE FACT THAT THE PROPERTY WAS PURCHASED FOR ` 75,00,000/- WAS DISCLOSED TO THE ASSESSING OFFICER. UNLESS AND UNTIL THERE IS A CAT EGORICAL FINDING BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS FURNISH ED INACCURATE PARTICULARS OR CONCEALED ANY PART OF HER INCOME, TH E ASSESSING OFFICER CANNOT LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT. ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER ON A CASUAL OBSERVATION THAT THERE ARE LOT OF LOOSE ENDS INVOLV ED IN THE INVESTMENTS MADE BY THE ASSESSEE AND INCONSISTENCY IN THE RETURN OF INCOME, HE LEVIED PENALTY UNDER SECTION 271(1)(C ) OF THE ACT. 3 I.T.A. NO.2547/MDS/16 ACCORDING TO THE LD. COUNSEL, THE PENALTY LEVIED BY THE ASSESSING OFFICER AT ` 8,57,260/- IS NOT JUSTIFIED, THEREFORE, THE CIT(APP EALS) OUGHT TO HAVE DELETED THE SAME. THE LD.COUNSEL PLA CED HIS RELIANCE ON THE JUDGMENT OF MADRAS HIGH COURT IN CI T V. AMPLE PROPERTIES LTD. (2011) 335 ITR 460. 3. ON THE CONTRARY, SHRI B. SAHADEVAN, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE PURCHAS ED A PROPERTY FOR ` 75,00,000/- AND THE SAME WAS SAID TO BE SOLD FOR ` 80,00,000/- SUBSEQUENTLY, THE ASSESSEE HAS PURCHASED ANOTHER PR OPERTY FOR ` 1.16 CRORES. THE ASSESSEE EXPLAINED BEFORE THE ASS ESSING OFFICER THAT ` 70.5 LAKHS WAS BORROWED FROM CLOSE RELATIVES / FAMI LY MEMBERS AND ANOTHER SUM OF ` 5,52,342/- WAS RECEIVED ON SALE OF JEWELS. ACCORDING TO THE LD. D.R., THE ASSESSEE HA S ALSO INCURRED AN EXPENDITURE OF ` 6.75 LAKHS FOR REGISTRATION. IN THE ABSENCE OF ANY MATERIAL TO SUPPORT THE SOURCE OF INVESTMENTS, THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) HAS RIG HTLY CONFIRMED THE SAME. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. FROM THE ORDERS 4 I.T.A. NO.2547/MDS/16 OF THE LOWER AUTHORITIES IT APPEARS THAT THE ASSESS EE PURCHASED A PROPERTY ON 17.09.2008 FOR ` 75,00,000/-. THE VERY SAME PROPERTY WAS SOLD ON 06.10.2008 FOR ` 80,00,000/-. SUBSEQUENTLY, ON 06.03.2009, THE ASSESSEE HAS PURCHASED ANOTHER PROP ERTY FOR ` 1.16 CRORES. THE ASSESSEE EXPLAINED BEFORE THE ASSESSIN G OFFICER REGARDING THE SOURCE FOR INVESTMENT IN THE PROPERTY . THE ASSESSEE HAS EXPLAINED THAT ` 70.5 LAKHS WAS BORROWED FROM CLOSE RELATIVES / FAMILY MEMBERS. TO SUPPORT THIS CLAIM, THE ASSESSE E HAS FILED NOTORISED AFFIDAVIT. THE ASSESSEE FURTHER CLAIMED THAT JEWELS WERE SOLD FOR ` 5,52,342/-. THE ASSESSING OFFICER HAS ALSO FOUND T HAT THE ASSESSEE INCURRED EXPENSES TOWARDS REGISTRATION TO THE EXTENT OF ` 7,20,000/-. THE ASSESSING OFFICER FOUND THAT IN TH E ABSENCE OF ANY SUPPORTING MATERIAL, FOR SALE OF JEWELLERY AND OTHE R FUNDS SAID TO BE BORROWED, THE ASSESSEE CONCEALED THE PARTICULARS OF INCOME. 5. WE HAVE ALSO GONE THROUGH THE PROVISIONS OF SECT ION 271(1)(C) OF THE ACT WHICH READS AS FOLLOWS:- FAILURE TO FURNISH RETURNS, COMPLY WITH NOTICES, CONCEALMENT OF INCOME, ETC. 271 (1) IF THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE PRINCIPAL COMMISSIONE R OR COMMISSIONER IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON 5 I.T.A. NO.2547/MDS/16 (A) . . .. .. .. . . .. (B) . .. .. .. .. .. .. (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, OR 6. THE ASSESSING OFFICER IS EMPOWERED TO LEVY PENAL TY IN CASE THE ASSESSEE FURNISHES INACCURATE PARTICULARS OF IN COME OR CONCEALED ANY PART OF HER INCOME. IN THE CASE BEFO RE US, IT IS NOBODYS CASE THAT THE ASSESSEE HAS FURNISHED INACC URATE PARTICULARS OF HER INCOME. THE ASSESSEE COULD NOT SUBSTANTIATE THE SOURCE FOR MAKING INVESTMENT IN THE PROPERTY. THE ASSESSEE ADMITTEDLY DISCLOSED THE INVESTMENTS. THE ASSESSEE HAS ALSO CLAIMED BEFORE THE ASSESSING OFFICER THAT SHE BORRO WED ` 70.5 LAKHS FROM HER CLOSE RELATIVES AND FAMILY MEMBERS. THE A SSESSEE HAS ALSO FILED NOTARISED AFFIDAVIT IN RESPECT OF BORROW ED FUNDS. APART FROM THIS, THE ASSESSEE HAS ALSO CLAIMED THAT JEWEL S TO THE EXTENT OF ` 5,52,342/- WERE SOLD. WHEN THE ASSESSEE HAS FURNIS HED ALL THE DETAILS OF THE INVESTMENTS, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT MERELY BECAUSE THE ASSESSEE COULD NOT SUBSTANT IATE THE CLAIM, IT CANNOT BE SAID THAT THE ASSESSEE HAS FURNISHED I NACCURATE PARTICULARS OR CONCEALED ANY PART OF HER INCOME. I F THE ASSESSEE 6 I.T.A. NO.2547/MDS/16 COULD NOT EXPLAIN THE SOURCE OF INVESTMENT THAT MAY BE A REASON FOR MAKING ADDITION IN THE ASSESSMENT PROCEEDINGS. HOW EVER, IT CANNOT BE SAID THAT THE ASSESSEE CONCEALED ANY PART OF HER INCOME OR FURNISHED INACCURATE PARTICULARS OF HER INCOME. 7. THE APEX COURT IN CIT V. RELIANCE PETROPRODUCTS PVT. LTD. (2010) 322 ITR 158 EXAMINED AN IDENTICAL SITUATION. IN THE CASE BEFORE THE APEX COURT, THE ASSESSEE CLAIMED EXPENDI TURE, HOWEVER, THE SAME COULD NOT BE SUBSTANTIATED BEFORE THE ASSE SSING OFFICER. THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE APEX COURT AFTER EXAMINING THE MATTER FOU ND THAT ONCE THE ASSESSEE FURNISHED ALL THE DETAILS BEFORE THE ASSES SING OFFICER, MERELY BECAUSE THE CLAIM COULD NOT BE SUBSTANTIATED THAT CANNOT BE A REASON FOR CONCLUDING THAT THE ASSESSEE HAS FURNI SHED INACCURATE PARTICULARS OR CONCEALED ANY PART OF INCOME. IN VI EW OF THE ABOVE JUDGMENT OF APEX COURT IN RELIANCE PETROPRODUCTS PV T. LTD. (SUPRA), THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT BOT H THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN LEVYING PENALTY UNDER SE CTION 271(1)(C) OF THE ACT. 8. IN VIEW OF THE ABOVE DISCUSSION, WE ARE UNABLE T O UPHOLD THE ORDERS OF BOTH THE AUTHORITIES BELOW. ACCORDINGLY, THE SAME ARE SET 7 I.T.A. NO.2547/MDS/16 ASIDE AND PENALTY LEVIED BY THE ASSESSING OFFICER T O THE EXTENT OF ` 8,57,260/- IS DELETED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 23 RD NOVEMBER, 2016 AT CHENNAI. SD/- SD/- ( . . ' #$ ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) & / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 23 RD NOVEMBER, 2016. KRI. 1 /3#8 98+3 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENT 3. ' :3 () /CIT(A)-2, CHENNAI-34 4. PRINCIPAL CIT-1, CHENNAI 5. 8; /3 /DR 6. * < /GF.