V.G.Pannerdas & Co., CHENNAI V. ACIT, CHENNAI

ITA 2621/CHNY/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8722 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 14-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 16-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SRIDHAR
• Section: 143(3); 153A; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . . . , . , % BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.2621/MDS/ 2014 ( / ASSESSMENT YEAR: 2009-10) M/S. V.G. PANNEERDAS & CO. 6, VGP SQUARE, DHARMARAJA KOIL STREET, SAIDAPET, CHENNAI-600 015. VS THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-IV(3), CHENNAI. PAN: AAAFV3395D ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.SRIDHAR, ADVOCATE /RESPONDENT BY : MR. A.V.SREEKANTH, JCIT /DATE OF HEARING : 14 TH JUNE, 2016 /DATE OF PRONOUNCEMENT : 22 ND AUGUST, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THE APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX, APPEALS,(CENTRAL)-I, CHENNAI DATED 25.07.2014 IN I TA NO.123/13-14 PASSED UNDER SECTION 271AAA R.W.S 250 (6) OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS A PPEAL, HOWEVER, THE CRUX OF THE ISSUE IS AS FOLLOWS:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE LEVY OF 2 ITA NO.2621/MDS/2014 PENALTY OF ` 47,516/- UNDER SECTION 271AAA OF THE ACT TOWARDS UNDISCLOSED INCOME. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 DECLARING INCOME OF ` 76,31,652/-. A SEARCH UNDER SECTION 132 OF THE ACT WAS CONDUCTED WITH RES PECT TO THE GROUP CONCERNS OF THE ASSESSEE ON 03.03.2009. THEREAFTER ASSESSMENT WAS FRAMED UNDER SECTION 153A R.W.S. 143(3) OF THE ACT ON 31.12.2010 DETERMINING THE INC OME OF THE ASSESSEE AS ` 85,81,973/-. DURING THE COURSE OF SEARCH IT WAS FOUND THAT THE ASSESSEE WAS SUPPRESSING THE PRO FITS THROUGH INFLATED CLAIM OF LAND DEVELOPMENT EXPENSES . THEREFORE, THE LEARNED ASSESSING OFFICER DISALLOWED 20% OF THE LAND DEVELOPMENT EXPENSES AMOUNTING TO ` 9,50,321/- ON ESTIMATE BASIS AND ALSO INITIATED PENALTY PROCEE DINGS UNDER SECTION 271AAA OF THE ACT AND LEVIED MINIMUM PENALTY OF ` 47,516/- BEING 10% OF THE UNDISCLOSED INCOME OF ` 4,75,160/- SUSTAINED BY THE LD.CIT(A). THE LEARNED ASSESSING OFFICER CAME TO SUCH CONCLUSION BECAUSE F OR THE EARLIER ASSESSMENT YEAR THE ASSESSEE HAD ADMITTED T HE 3 ITA NO.2621/MDS/2014 INFLATION OF LAND EXPENSES, HOWEVER DURING THE RELE VANT ASSESSMENT YEAR THE ASSESSEE DID NOT ADMIT THE FACT THAT LAND DEVELOPMENT EXPENSES WERE INFLATED AND FURTHER THE ASSESSEE COULD ALSO NOT FURNISH ANY EVIDENCE TO SUP PORT ITS CLAIM OF EXPENDITURE. 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESS ING OFFICER AGREEING WITH HIS VIEW, 5. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIV E SUBMITTED THAT THE ENTIRE ADDITION IS MADE ON ESTIM ATE BASIS WHEN GENUINELY THE ASSESSEE HAD INCURRED THE EXPEND ITURE TOWARDS LAND DEVELOPMENT EXPENDITURE. HE FURTHER SU BMITTED THAT DURING THE RELEVANT ASSESSMENT YEAR, THE ASSES SEE HAS NOT INFLATED THE LAND DEVELOPMENT EXPENDITURE. 6. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE ARGUED IN THE SUPPORT OF THE ORDERS OF THE REVENUE. 4 ITA NO.2621/MDS/2014 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM TH E FACTS OF THE CASE, IT IS APPARENT THAT THE REVENUE DID NOT H AVE ANY APPREHENSION THAT THE ASSESSEE HAD NOT INCURRED ANY LAND DEVELOPMENT EXPENSES. FOR WANT OF EVIDENCE, THE LEA RNED ASSESSING OFFICER HAS DISALLOWED 20% OF THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE TOWARDS LAND DEVELOPMENT EXPENDITURE ON ESTIMATE BASIS WHICH WAS FURTHER RESTRICTED BY THE LD.CIT(A) TO 10%. IN THIS SITUATION, WE ARE OF THE CONSIDERED VIEW THAT IN THE CASE OF T HE CASE FOR THE RELEVANT ASSESSMENT YEAR LEVY OF PENALTY IS NOT WARRANTED BECAUSE ADDITION IS MADE MERELY ON SUSPICION THAT T HE ASSESSEE WOULD NOT HAVE INCURRED THE ENTIRE EXPENDI TURE WHICH IT HAD DISCLOSED. FURTHER NO SEIZED MATERIAL S WERE FOUND DURING THE COURSE OF SEARCH PROCEEDINGS IN TH E CASE OF THE ASSESSEE FOR MAKING SUCH ADDITION IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, WE HEREBY DIRECT THE LEARNED ASSESSING OFFICER TO DELETE THE PENALTY OF RS.47,51 6/- IMPOSED BY THE LEARNED ASSESSING OFFICER WHICH WAS FURTHER SUSTAINED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 5 ITA NO.2621/MDS/2014 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 22 ND AUGUST, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 22 ND AUGUST, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF .