P.Shanmugam, Coimbatore V. ITO, Coimbatore

ITA 2842/CHNY/2014

• Counselvise Citation: 284221714 RSA 2014
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 02-11-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 17-11-2014
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: T BANUSEKAR

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY , ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 2842 /MDS/201 4 / ASSESSMENT YEAR :20 1 0 - 11 SHRI P. SHANMUGAM, NO. 11/1, ARUMUGAM LAYOUT, ANNA NAGAR, PEELAMEDU, COIMBATORE. [PAN: A PQPS7331R ] VS. THE INCOME TAX OFFICER , WARD II ( 4 ), C OIMBATO RE . ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI T. BANUSEKAR, C.A. / RESPONDENT BY : SHRI P. RADHAKRISHNAN, J CIT / DATE OF HEARING : 0 2 . 11 .201 5 / DATE OF P RONOUNCEMENT : 27 . 1 1 .201 5 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : TH IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) I , C OIMBATORE , DATED 1 0 . 09 . 20 1 4 RELEVA NT TO THE ASSESSMENT YEAR 20 1 0 - 11 . THE ONLY GROUND RAISED IN THE APPEAL OF THE ASSESSEE IS WITH REGARD TO DELETION OF PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT]. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS INDIVIDUAL , ENGAGED IN BROKERAGE AND REAL ESTATE BUSINESS AND FILED HIS RETURN ADMITTING INCOME OF I.T.A. NO . 2842 /M/ 14 2 .82,539/ - UNDER THE HEAD HOUSE PROPERTY , . 3,31,587/ - AS INCOME FROM OTHER SOURCES AND .74,500/ - AS AGRICULTURAL INCOME. THE ASSESSING OFFICER HAD AIR INFORMATION THAT THE ASSESSEE HAS MADE TOTAL CASH CREDIT OF .25 LAKHS AND INVESTMENTS IN MUTUAL FU NDS TO THE TUNE OF .92,50,000/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AR OF THE ASSESSEE HAS ADMITTED THAT THE ASSESSEE HAS NOT FULLY FURNISHED THE INFORMATION OF HIS INCOME. ACCORDINGLY HE HAS FILED A REVISED STATEMENT INCLUDING INCOME FROM C ONTRACT BUSINESS. ON VERIFICATION OF BANK ACCOUNT STATEMENT, THE ASSESSING OFFICER HAS FOUND THAT DURING THE RELEVANT PREVIOUS YEAR, THE TOTAL CASH CREDIT IN IDBI BANK, KOTAK MAHINDRA BANK AND DHANALAKSHMI BANK WAS .1.76 CRORES. SUBSEQUENTLY, A SURVEY WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE AND DURING THE COURSE OF SURVEY, IT WAS FOUND THAT THE ASSESSEE HAS EARNED INCOME FROM THE COMMISSION RECEIPTS ON THE SALE OF IMMOVABLE PROPERTIES MADE THROUGH HIM AND SUCH COMMISSION RECEIPTS WERE INITIALLY DEPOS ITED IN THE BANK ACCOUNTS AND THEN TRANSFERRED TO SHORT TERM MUTUAL FUNDS. HE HAS THEN UTILIZED THESE AMOUNTS TO ACQUIRE IMMOVABLE PROPERTIES AND IN IMPROVING AND CONSTRUCTING BUILDINGS. AS A RESULT OF SURVEY, THE ASSESSEE HAS ADMITTED BEFORE THE ASSESSING OFFICER THAT HE HAD NOT SHOWN THE INCOME DERIVED FROM THE BROKERAGE ACTIVITIES IN HIS RETURN OF INCOME AND AGREED TO OFFER THE SAME FOR TAX , WHICH WAS NOT DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME FILED ON 05.02.2011 . AFTER WORKING OUT THE TOTAL T RANSACTIONS AND THE CASH CREDITS, THE ADDITIONAL UNDISCLOSED INCOME, WHICH I.T.A. NO . 2842 /M/ 14 3 WAS NOT DISCLOSED IN THE ORIGINAL RETURN FILED BY THE ASSESSEE, WAS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE AND MOREOVER, THE ASSESSEE HAS ALSO NOT PREFERRED ANY APPEAL BEFOR E THE LD. CIT(A) 3. SUBSEQUENTLY, THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WAS INITIATED. BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAS SUBMITTED THAT HE ALONG WITH FEW FRIENDS DID SOME REAL ESTATE DEALS AND THE SURPLUS EARNED OUT OF T HE SAME WAS DEPOSITED IN SOME BANK ACCOUNTS. AS THE INCOME WAS EARNED BY A GROUP OF PEOPLE, THE ASSESSEE WAS UNDER IMPRESSION THAT THE SHARE INCOME IS NOT REQUIRED TO BE INCLUDED IN HIS INDIVIDUAL ACCOUNT . AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE ASSESSING OFFICER HAS OBSERVED THAT THE COMMISSION INCOME EARNED FROM THESE REAL ESTATE TRANSACTIONS HAVE NOT JUST BEEN DEPOSITED IN THE BANK TO BE SHARED AMONG THE GROUP, BUT HAVE BEEN UTILIZED TO INVEST IN MUTUAL FUNDS IN ASSESSEE S OWN NAME AND ALS O TO ACQUIRE IMMOVABLE PROPERTIES IN HIS NAME AND IN THE NAME OF HIS FAMILY MEMBERS. THE ASSESSEE HAS NOT TRIED TO ESTABLISH AT ANY STAGE REGARDING THE GROUP TRANSACTION NOR THE DISTRIBUTION OF PROFITS IN LAND TRANSACTIONS TO HIS FRIENDS, NEITHER HAS HE FU RNISHED ANY EVIDENCE TO ESTABLISH THAT THE TRANSACTIONS WERE A JOINT TRANSACTION. THEREFORE, THE SUBMISSIONS PUTFORTH BY THE AR OF THE ASSESSEE WAS FOUND TO BE FALSE AND IS DEVOID OF MERITS. THE EXPLANATION OFFERED BY THE ASSESSEE WAS NOT FOUND TO BE BONAF IDE AND WAS NOT SUPPORTED BY ANY EVIDENCE AND I.T.A. NO . 2842 /M/ 14 4 DIFFERENT FROM THE STAND OF THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS HELD THAT IT IS A CLEAR CASE OF CONCEALMENT OF CASH DEPOSITS IN THE BANK AND INVESTMENTS IN MUTUAL FUNDS AND FURNISHING OF INCORRECT PARTICULARS IN THE RETURN OF INCOME. ACCORDINGLY, THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE JUST REITERATED THE SUBMISSIONS AS MADE BEFORE THE A SSESSING OFFICER AND COULD NOT PRODUCE ANY EVIDENCE TO ESTABLISH THAT THE REAL ESTATE TRANSACTIONS ARE A JOINT TRANSACTIONS. SINCE IT IS A CLEAR CASE OF CONCEALMENT OF THE CASH CREDITS IN THE BANK AND INVESTMENTS IN MUTUAL FUNDS AND FURNISHING OF INACCURAT E PARTICULARS, THE LD. CIT(A) CONFIRMED THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER. 5. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS SUB MITTED THAT NO NEW MATERIALS TO SUGGEST ADDITIONAL INCOME EARNED OTHER THAN THOSE INCOME S, WHICH WAS VOLUNTARILY OFFERED BY THE ASSESSEE WAS FOUND DURING THE COURSE OF SURVEY. HE HAS STRONGLY CONTENDED THAT THE EXPLANATION OFFERED BEFORE THE AUTHORITIES BE LOW ARE BONAFIDE AND THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL THE MATERIAL PARTICULARS RELATING TO THE TOTAL INCOME. PER CONTRA, THE LD. DR HAS SUBMITTED THAT ONLY AFTER CONDUCTING THE SURVEY IN THE PREMISES OF THE ASSESSEE AND I.T.A. NO . 2842 /M/ 14 5 DURI NG THE COURSE OF SURVEY, THE DEPARTMENT HAS FOUND THAT THE ASSESSEE HAS EARNED INCOME FROM THE BROKERAGE/COMMISSION ON THE SALE OF IMMOVABLE PROPERTIES MADE THROUGH HIM AND SUCH RECEIPTS WERE INITIALLY DEPOSITED IN THE BANK ACCOUNTS AND THEN TRANSFERRED TO SHORT TERM MUTUAL FUNDS. THEREFORE, THERE IS NO QUESTION OF VOLUNTARY DISCLOSURE OF ALL INCOME BY THE ASSESSEE IN THE RETURN OF INCOME FILED BY HIM. 6. I N THE RETURN OF INCOME FILED ON 05.02.2011 , THE ASSESSEE HAS DISCLOSED INCOME OF .82,539/ - UNDER TH E HEAD HOUSE PROPERTY , .3,31,587/ - AS INCOME FROM OTHER SOURCES AND .74,500/ - AS AGRICULTURAL INCOME AND OVER AND ABOVE, THE ASSESSEE HAS NOT FURNISHED ANY OTHER INCOME EARNED DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. BASED ON THE AIR INFORMATIO N THAT THE ASSESSEE HAS MADE TOTAL CASH CREDIT OF .25 LAKHS AND MADE INVESTMENTS IN MUTUAL FUNDS TO THE TUNE OF .92,50,000/ - AND WHEN THE ASSESSEE WAS ASKED TO EXPLAIN D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AR OF THE ASSESSEE HAS ADMITTED THAT THE ASSESSEE HAS NOT FULLY FURNISHED THE INFORMATION OF HIS INCOME. THEREFORE, T HE AR OF THE ASSESSEE HAS FILED A REVISED STATEMENT INCLUDING INCOME FROM CONTRACT BUSINESS. ON VERIFICATION OF BANK ACCOUNT STATEMENT, THE ASSESSING OFFICER HAS FOUND THAT DUR ING THE RELEVANT PREVIOUS YEAR, THE TOTAL CASH CREDIT IN IDBI BANK, KOTAK MAHINDRA BANK AND DHANALAKSHMI BANK WAS .1.76 CRORES. SUBSEQUENTLY, DURING THE COURSE OF SURVEY, IT WAS FOUND THAT THE ASSESSEE I.T.A. NO . 2842 /M/ 14 6 HAS EARNED INCOME BY WAY OF BROKERAGE/ COMMISSION ON THE SALE OF IMMOVABLE PROPERTIES MADE THROUGH HIM AND SUCH RECEIPTS WERE INITIALLY DEPOSITED IN THE BANK ACCOUNTS A ND THEN TRANSFERRED TO SHORT TERM MUTUAL FUNDS. HE HAS THEN UTILIZED THESE AMOUNTS TO ACQUIRE IMMOVABLE PROPERTIES AND IN IMPROVING AND CONSTRUCTING BUILDINGS. AS A RESULT OF SURVEY, AR OF THE ASSESSEE HAS ADMITTED BEFORE THE ASSESSING OFFICER THAT T HE ASS ESSEE HAS NOT SHOWN THE INCOME DERIVED FROM THE BROKERAGE ACTIVITIES IN HIS RETURN OF INCOME AND AGREED TO OFFER THE SAME FOR TAX , WHICH WAS NOT DISCLOSED IN THE RETURN OF INCOME FILED ON 05.02.2011 . BUT FOR SURVEY, THE BROKERAGE RECEIPT/ COMMISSION RECEIPT S ON THE SALE OF IMMOVABLE PROPERTIES WOULD NOT HAVE CAME INTO LIGHT. ACCORDINGLY, THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE HAS VOLUNTARILY DISCLOSED ALL PARTICULARS OF INCOME IS DEVOID OF MERITS AND STANDS DEFEATED. 7. AT NO STRETCH OF IMAGINATION, THE CONTENTION OF THE ASSESSEE COULD BE ACCEPTED THAT THE BROKERAGE/ COMMISSION INCOME EARNED FROM THE REAL ESTATE TRANSACTION PERTAINS TO THE GROUP AND IF IT IS SO, THE ASSESSEE HAS NOT EXPLAINED AS TO HOW HE HAS INVESTED IN THE MU TUAL FUND IN HIS OWN NAME AND SUBSEQUENTLY ACQUIRED IMMOVABLE PROPERTIES IN HIS NAME AND IN THE NAME OF HIS FAMILY MEMBERS. NO BODY IN THE SO - CALLED GROUP WAS PRODUCED BEFORE THE AUTHORITIES BELOW TO CLAIM THAT THE BROKERAGE/ COMMISSION INCOME EARNED FROM TH E REAL ESTATE TRANSACTION PERTAINS TO THE GROUP AND NO I.T.A. NO . 2842 /M/ 14 7 EVIDENCE WAS PRODUCED IN THIS REGARD. WHEN THE ASSESSEE HAD NO OTHER ALTERNATE, HE HAS AGREED FOR TAXATION. 8. UNDER THE ABOVE FACTS AND CIRCUMSTANCES, IT IS A CLEAR CASE OF CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS, ATTRACTS LEVY PENALTY AND THEREFORE, THE ASSESSING OFFICER HAS LEVIED PENALTY, WHICH WAS RIGHTLY CONFIRMED BY THE LD. CIT(A). THUS, WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A) AND ACCORDINGLY, THE PENALTY LEVIED BY THE ASSESSING OFFICER STANDS CONFIRMED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED ON THE 27 TH NOVEMBER , 2015 AT CHENNAI. SD/ - SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICI AL MEMBER CHENNAI, DATED, THE 27 . 1 1 .201 5 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.