K M M Sithi Fousia Beevi, CHENNAI V. ACIT, Coimbatore

ITA 2959/CHNY/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9287 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 08-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN IRS
• Assessee Lawyers: S SRIDHAR
• Keywords: Income from undisclosed sources
• Section: 133A; 131; 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , . , BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBE R AND SHRI. G. PAVAN KUMAR, JUDICIAL MEMBER ./I.T.A. NO. 2959/MDS/2014 / ASSESSMENT YEAR : 2009-2010. K.M.M. SITHI FOUSIA BEEVI, 213, BIG BAZAAR STREET, COIMBATORE 641 001. [PAN AAAPF 6983H] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE III, COIMBATORE. ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : SHRI. S. SRIDHAR, ADVOCATE. $% ! ' # /RESPONDENT BY : SHRI. N. MADHAVAN, IRS, JCIT. & ' ' ( /DATE OF HEARING : 19-05-2016 ) ' ' ( /DATE OF PRONOUNCEMENT : 02-06-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, COIMBAT ORE IN ITA NO.343/13-14, DT 10.10.2014 FOR THE ASSESSMENT YEAR 2009-2010 PASSED ITA NO.2959/MDS/2014. :- 2 -: U/S.271(1)(C) AND 250 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). 2. THE ASSESSEE HAS RAISED ONLY ONE SUBSTANTIVE GROUND THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN C ONFIRMING THE ORDER OF PENALTY LEVIED BY THE LD. ASSESSING OFFICER WITH OUT PROPER REASONS AND JUSTIFICATION EVEN THOUGH ASSESSEE HAS NOT CONCEALE D ANY INCOME NOR SUBMITTED INACCURATE PARTICULARS BUT OFFERED INCOME ON SALE OF PROPERTY AND ACCEPTED THE ADDITION AND NOT CONTESTED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL AND HAVING INCOME FROM HOUSE PROPERTY, BUSINESS INC OME, CAPITAL GAINS AND INCOME FROM OTHER SOURCES AND FILED RETURN OF I NCOME ON 28.09.2009 WITH TOTAL INCOME OF =9,04,460/- AND THE RETURN WAS PROCESSED U/S.143(1) OF THE ACT. SUBSEQUENTLY, UNDER PROVISIONS OF SEC . 131(1A) OF THE ACT STATEMENT WAS RECORDED FROM ASSESSEES HUSBAND. TH E ASSESSEE ALONGWITH HER HUSBAND PURCHASED LAND WITH BUILDING ON 05.09.2008 AT COIMBATORE FOR A CONSIDERATION OF =1,63,58,100/- IN CLUDING STAMP DUTY, REGISTRATION AND OTHER EXPENSES OF =13,58,100/- FRO M C.K. NATARAJAN. THERE WAS SURVEY OPERATIONS U/SEC.133A OF THE ACT ON C.K. NATARAJAN WHO IS IN REAL ESTATE BUSINESS AND REVENUE OBTAINED INFORMATION THAT ON MONEY OF =1,62,00,000/- WAS PAID IN CASH TO C.K. NA TARAJAN FOR PURCHASE OF AFORESAID PROPERTY. SUBSEQUENTLY, THE ASSESSEE HAS SOLD A PART OF THE ITA NO.2959/MDS/2014. :- 3 -: PROPERTY ALONGWITH HER HUSBAND ON 09.01.2009 FOR =3 0,50,000/- BUT AS PER SWORN STATEMENT THE TOTAL CONSIDERATION PAID F OR THE PROPERTY IS =70,00,000/- BUT REGISTERED FOR =30,50,000/- ONLY A ND TREATED AS SALE CONSIDERATION. THE SAID INFORMATION WAS NOT DISCLOS ED BY THE ASSESSEE IN THE RETURN OF INCOME AND LD. ASSESSING OFFICER ISSU ED NOTICE U/S.148 OF THE ACT AND IN RESPONSE TO THE NOTICE, THE ASSESSEE FIL ED A LETTER EXPLAINING AS UNDER:- ' FOR THE ABOVE SAID ASSESSMENT YEAR I HAVE FILED M Y RETURN OF INCOME ON 28-09-2009 VIDE E-FILING ACKNOWLEDGEMENT NO. 93211010280909, WHICH COPY IS ENCLOSED FOR YOUR REA DY REFERENCE. THE SAID RETURN MAY PLEASE BE CONSIDERED IN RESPONSE TO YOUR ABOVE NOTICE ALSO AND FURTHER, / A LSO ADMIT THE FOLLOWING INCOME, TO BE ADDED TO MY INCOME RETU RNED. IN THE SWORN STATEMENT RECORDED WITH MR. SHEIK MOHI DEEN, MY SPOUSE, ON 08- 03-2011, U/S. 131 (1 A) OF THE INCOM E-TAX ACT, 1961, HE VOLUNTARILY OFFERED AN ADDITIONAL INCOME I N RESPECT OF PURCHASE OF A BUILDING AT TATABAD, GANDHIPURAM, FROM MR. C.K. NATARAJAN, WHICH WAS PURCHASED ON 05-09-2008. PART OF THE ABOVE PROPERTY WAS SOLD ON 09-01-2009 FOR WHICH ALSO HE VOLUNTARILY OFFERED AN ADDITIONAL INCOME. THE ABOVE TRANSACTION WERE MADE DURING THE FINANCIAL YEAR REL EVANT TO THE ASSESSMENT YEAR 2009-10. SINCE I AM THE CO-OWNER OF THE ABOVE SAID PROPERTY, I VOLUNTARILY OFFER THE ABOVE ADDITIONAL INCOME FOR THE ABOVE ASSESSMENT YEAR. THE REVISED C APITAL GAIN COMPUTATION STATEMENT IS ENCLOSED FOR YOUR KIN D PERUSAL. BASED ON THE SUBMISSIONS OF THE ASSESSEE THE LD. AS SESSING OFFICER CALCULATED SHORT TERM CAPITAL GAINS ON SALE OF LAND AND AFTER CONSIDERING ITA NO.2959/MDS/2014. :- 4 -: ADMITTED SHORT TERM CAPITAL GAINS FURTHER ADDED =3, 65,139/- IN RESPECT OF SALE OF PROPERTY AND THE ASSESSEE HAS OFFERED 50% O F HER SHARE =81,00,000/- IN PURCHASE OF PROPERTY AT COIMBATORE REFERRED ABOVE AND ADDED TO RETURNED INCOME AND LD. ASSESSING OFFICER COMPLETED ASSESSMENT U/S.143(3) R.W.S 147 OF THE ACT ON 29.03.2013 SUBSE QUENTLY, THE LD. ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS AND THE LD. AUTHORISED REPRESENTATIVE EXPLAINED THE FACTS OF THE CASE AND REASONS FOR ACCEPTING THE ADDITIONS AND SUBMISSIONS MADE IN THE ASSESSME NT PROCEEDINGS. THE LD. ASSESSING OFFICER CONSIDERED THE LETTER FILED BY THE ASSESSEE DATED 11.09.2013 REQUESTING FOR DROPPING PENALTY PROCEEDI NGS ON HEALTH CONDITIONS AND FINANCIAL CONDITIONS BY THE ASSESSEE . THE LD. ASSESSING OFFICER OBSERVED THAT BUT FOR SURVEY THE ASSESSEE C OULD NOT COME FORWARD FOR DISCLOSURE OF ON MONEY PAID AND THERE IS CLEAR INTENTION TO CONCEAL THE INCOME IN TRANSACTION OF PURCHASE AND SALE OF THE P ROPERTY AND LEVIED PENALTY OF =27,82,380/- AND PASSED ORDER U/S.271(1) (C) OF THE ACT DATED 30.09.2013. AGGRIEVED BY THE PENALTY ORDER, THE ASS ESSEE FILED AN APPEAL BEFORE COMMISSIONER OF INCOME TAX (APPEALS). 4. IN THE APPELLATE PROCEEDINGS, THE LD. AUTHORISED RE PRESENTATIVE ARGUED THAT THE ASSESSEE RELIED ON THE STATEMENT OF MR. A. SHAIK MOHIDEEN UNDER U/S.131(1A) OF THE ACT. IN ORDER T O BUY PEACE WITH DEPARTMENT AND AVOID VEXATIOUS LITIGATION OFFERED VOLUNTARILY INCOME ON ITA NO.2959/MDS/2014. :- 5 -: PURCHASE AND SALE OF THE PROPERTY. THE ASSESSEES S POUSE IS SUFFERING FROM DIABETES AND SEVERE HYPERTENISON. THE LD. ASSESSIN G OFFICER WITHOUT CONSIDERING THE FACTS RELIED ONLY ON THE VOLUNTARIL Y SUBMISSIONS OF THE ASSESSEE AND THERE IS NO BONAFIDE EVIDENCE AVAILABL E WITH THE DEPARTMENT EXCEPT STATEMENT AND DOES NOT HAVE ANY CONCLUSIVE MATERIAL EVIDENCE. THE LD. AUTHORISED REPRESENTATIVE SUPPORTED HIS SUB MISSIONS WITH THE DECISION OF SUPREME COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (2001) 251 ITR 9 OBSERVED THAT WHERE THE ASSESSEE OFFERED HIGH INCOM E TO PURCHASE PEACE AND AVOID LITIGATION AND THE DEPA RTMENT SIMPLY RESTED ITS CONCLUSION ON THE ACT OF VOLUNTARY SURRENDER D ONE BY THE ASSESSEE IN GOOD FAITH. THE HIGH COURT WAS JUSTIFIED IN HOLDING THAT NO PENALTY COULD BE LEVIED. THE LD. ASSESSING OFFICER OVERLOOKED T HE SUBMISSIONS OF THE ASSESSEE ON HEALTH GROUND AND FINANCIAL CONDITIONS AND HURRIEDLY LEVIED PENALTY. THE ASSESSEE HAS CO-OPERATED IN INCOME TA X PROCEEDINGS AND THERE IS NO CONTUMACIOUS CONDUCT OF THE ASSESSEE AN D PRAYED FOR DELETION OF PENALTY. THE LD. COMMISSIONER OF INCOME TAX (AP PEALS) CONSIDERED THE SUBMISSIONS AND THE GROUNDS HAS CALLED FOR THE REC ORDS OF SURVEY U/SEC. 133A AND IMPOUNDED DOCUMENTS OBSERVED AT PARA 5 OF HIS ORDER AS UNDER:- 5. I HAVE GONE THROUGH THE SUBMISSIONS MADE BY THE APPELLANT AND ALSO THE ORDER OF THE ASSESSING OFFIC ER REGARDING THE LEVY OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. AFTER GOING THROUGH THE ORDER OF THE ASSESSING OFFI CER, THE ITA NO.2959/MDS/2014. :- 6 -: ASSESSING OFFICER WAS REQUESTED TO SUBMIT THE SURVE Y FOLDER ALONG WITH THE IMPOUNDED DOCUMENTS. AS SEEN FROM TH E SURVEY FOLDER SUBMITTED BY THE ASSESSING OFFICER, A LETTER WAS ADDRESSED BY THE ITO (INV.), COIMBATORE TO THE ACIT , CIRCLE-ILL, COIMBATORE ON 30.03.2011. AS SEEN FROM THIS LETTER, A SURVEY U/S 133A OF THE INCOME TAX ACT, 1961 WAS CONDUCTED ON 06.01.2011 IN THE CASE OF SHRI C. K. NATARAJAN, COIMBATORE, ENGAGED IN REAL ESTATE AND CONSTRUCTION BUSINESS. D URING THE COURSE OF SURVEY PROCEEDINGS; SOME LOOSE SHEETS WER E FOUND AND IMPOUNDED. OUT OF THIS, LOOSE SHEET NO.103 IN ANN/PS/LS/IMP HAD SOME SCRIBBLING REGARDING THE ON- MONEY, BROKERAGE ETC. MADE IN RESPECT OF AN IMMOVABLE PROPERTY. WHEN CLARIFICATION WAS SOUGHT, SHRI C.K. NATARAJAN DEPOSED THAT HE HAD PURCHASED 10 CENTS OF LAND FOR RS.1,50, OO,OOO/- . THIS PROPERTY WAS SOLD ON 05.09.2008 TO SHRI A. S HEIK MOHIDEEN AND SMT. K M M SITHI FOUZIA BEEVI OF COIRNBATORE, FOR A TOTAL AMOUNT OF RS.3,12,70,431/-. THE SALE WA S REGISTERED FOR RS.1,50,00,000/- INVOLVING A HUGE ON-MONEY TO T HE TUNE OF RS.1,62,70,431/-. UNDER THE ABOVE CIRCUMSTANCES, A DISCREET ENQUIRY WAS MADE IN THE CASE OF SHRI SHEIK MOHIDEEN FOR ASCERTAINING THE EXACT AMOUNT OF PAYMENT MADE IN TH E CASE OF SHRI C.K. NATARAJAN. DURING THE COURSE OF ENQUIRY, CLARIFICATION WAS SOUGHT FROM SHRI A. SHEIK MOHIDEEN REGARDING TH E TRANSACTION UNDERTAKEN WITH SHRI C.K. NATARAJAN. HE HAD DEPOSED THAT, HE ALONG WITH HIS WIFE, HAS PURCHASED 10 CENTS OF LAND FOR A REGISTERED VALUE OF RS.1,50,00,000/- AT TATABAD 10 TH STREET, COIMBATORE FROM SHRI C.K. NATARAJAN AND PA ID ON- MONEY TO THE TUNE OF RS.1,62,00,000/-. THIS INVESTM ENT WAS SAID TO BE MADE OUT OF THE UNACCOUNTED INCOME. THE LD.CIT(A) FOUND THAT ASSESSING OFFICER HAS MADE ASSESSMENT OF ON MONEY =81,00,000/- PAID TO C.K. NATARAJAN IN RESPE CT OF PURCHASE OF ITA NO.2959/MDS/2014. :- 7 -: PROPERTY AT COIMBATORE ON MONEY PAYMENT WAS UNEART HERED FROM THE STATEMENT RECORDED AS PER LOOSE SHEETS IMPOUNDED IN THE SURVEY U/S.133A OF THE ACT ON SELLER OF THE PROPERTY C.K. NATARAJAN . THE COMMISSIONER OF INCOME TAX (APPEALS) IS OF THE OPINION THAT THE TOT AL ON MONEY PAYMENT OF =1,62,00,000/- WAS PAID BY ASSESSEE AND HER HUSB AND AND ASSESSEES SHARE OF =81,00,000/- WAS OFFERED IN THE INCOME TAX ASSESSMENT WHICH HAS A CONCLUSIVE PROOF AND EVIDENCE OF CONCEALMENT OF INCOME AND IN RESPECT OF OTHER AMOUNT ON SALE OF THE PROPERTY, TH E LD.CIT(A) OBSERVED THAT THERE IS NO EVIDENCE OF PAYMENT OF ON MONEY A ND CAME TO A CONCLUSION ON VOLUNTARILY DISCLOSURE OBSERVED AT PA RA 7 OF HIS ORDER AS UNDER:- 7. REGARDING THE OTHER AMOUNT ON WHICH CONCEALMEN T PENALTY WAS LEVIED IS REGARDING THE ON-MONEY RECEIV ED ON THE SALE OF 873 SQ.FT OF LAND ON 09.01.2009 BY THE ASSE SSEE. OUT OF THE PROPERTY PURCHASED AT TATABAD, COIMBATORE, 8 73 SQ.FT OF LAND WAS SOLD ON 09.01.2009 FOR RS.30,5O,000/-. THE ASSESSEE ADMITTED THAT THE LAND WAS SOLD FOR RS.70 LAKHS. THUS, THERE WAS AN ON-MONEY OF RS.39,5O,000/- IN TH IS TRANSACTION WHICH WAS ADMITTED BY THE APPELLANT'S H USBAND. AS SEEN FROM THE SURVEY FOLDER, THERE WAS NO EVIDEN CE AVAILABLE REGARDING THE ON-MONEY PAYMENT OF RS.39,5 0,000/- ON THE SALE OF THE PROPERTY. THIS HAS TO BE CONSIDE RED AS VOLUNTARY DISCLOSURE MADE BY THE ASSESSEE DURING TH E COURSE OF ENQUIRY PROCEEDINGS. IN VIEW OF THE ABOVE, THE P ENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF TH E INCOME TAX ACT, 1961 IS CONFIRMED TO THE EXTENT OF CONCEAL ED ITA NO.2959/MDS/2014. :- 8 -: INCOME OF 81 LAKHS. THE ASSESSING OFFICER IS DIRECTED TO DELETE THE PENALTY LEVIED ON RS.39,50,000/-. THE GR OUNDS OF APPEAL ARE PARTLY ALLO WED. AND PARTLY ALLOWED THE APPEAL. AGGRIEVED BY THE C OMMISSIONER OF INCOME TAX (APPEALS) ORDER, THE ASSESSEE ASSAILED AN APPEA L BEFORE TRIBUNAL. 5. BEFORE US, THE LD. AUTHORISED REPRESENTATIVE REITER ATED THE SUBMISSIONS MADE IN THE ASSESSMENT PROCEEDINGS, PEN ALTY PROCEEDINGS AND APPELLATE PROCEEDINGS AND LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN GRANTING PARTIAL RELIEF BY CONFIRMING LEVY OF PENALTY TO THE EXTENT OF =81,00,000/- PAID ON-MONEY AND DIRECTED TO DELET E THE PENALTY LEVIED ON VOLUNTARY DISCLOSURE OF =39,50,000/- ON SALE OF LAND. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS RELIED ONL Y ON ONE SIDE OF THE DISPUTED ISSUE AND HAS CALLED FOR THE SURVEY FOLDER OF THE C.K. NATARAJAN SELLER OF THE PROPERTY AND BASED ON THE IMPOUNDED D OCUMENT OF LOOSE SHEETS FOUND IN SURVEY, CAME TO A CONCRETE CONCLUS ION ON THE ENQUIRY AND CLARIFICATION FROM ASSESSEES HUSBAND. THE LD ASSE SSING OFFICER HAS NOT CONDUCTED ANY ENQUIRY EXCEPT RELYING ON STATEMENT R ECORDED FROM SELLER AND NO PROPER OPPORTUNITY WAS PROVIDED BEFORE PASSI NG THE ORDER AND PRAYED FOR ALLOWING THE APPEAL. ITA NO.2959/MDS/2014. :- 9 -: 6. CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE FINDINGS OF THE LD. ASSESSING OFFICER IN PENALTY PR OCEEDINGS AND ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ADDITION AND FURTHER RELIED ON THE DECISION OF MAK DATA (PVT) LTD. VS. CIT 358 ITR 593 AND OPPOSED THE GROUNDS OF THE ASSESSEE. 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD AND JUDICIAL DECISION CITED. THE LD. AUTHOR ISED REPRESENTATIVE BASIC CONTENTION THAT LD. COMMISSIONER OF INCOME TAX (AP PEALS) HAS GRANTED RELIEF TO THE EXTENT OF =39,50,000/- WERE THE ASSE SSEE HAS OFFERED VOLUNTARILY INCOME AND DIRECTED THE ASSESSING OFFIC ER TO DELETE BUT ON REMAINING =81,00,000/-, THE LD. COMMISSIONER OF INC OME TAX (APPEALS) BASED ON THE ENQUIRY AND SURVEY FOLDER OBSERVED IN HIS ORDER AT PAGE 5 THE SURVEY OPERATION OF C.K. NATARAJAN, WHO IS ENGA GED IN REAL ESTATE BUSINESS AND CONSTRUCTION BUSINESS AND RELIED ON TH E SOME LOOSE SHEET AND SCRIBBLING PAYMENTS IN RESPECT OF IMMOVABLE PRO PERTY AND DEPOSITION OF C.K. NATARAJAN AND CONFIRMED THE PENALTY TO THE EXTENT OF ADDITION =81,00,000/- PRIME FACIE THERE IS NO INDEPENDENT EN QUIRY BY THE LD. ASSESSING OFFICER OR ASSESSEE WAS PROVIDED AN OPPOR TUNITY IN THE APPELLATE PROCEEDINGS TO VERIFY THE INCREMENTING IMPOUNDED DO CUMENTS WHICH ARE AGAINST THE ASSESSEE. SO, CONSIDERING THE APPARENT FACTS, ASSESSMENT PROCEEDINGS AND THE FINDINGS OF THE COMMISSIONER OF INCOME TAX ITA NO.2959/MDS/2014. :- 10 -: (APPEALS) AND SURVEY OPERATIONS, WE ARE OF THE OPIN ION THAT ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY TO EXAMINE AND VERIF Y THE LOOSE SHEET NO.103 AND WITH SCRIBBLING REGARDING ON MONEY PAYME NTS IN RESPECT OF IMMOVABLE PROPERTY. THEREFORE, WE SET ASIDE THE ORD ER OF CIT(A) AND REMIT THE FILE TO THE COMMISSIONER OF INCOME TAX (A PPEALS) TO CONSIDER AND VERIFY THE CLAIM OF ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THURSDAY, THE 2ND DAY OF JUNE, 2016 AT CHENNAI. SD/- SD/- ( . ! ) (A. MOHAN ALANKAMONY) # $% / ACCOUNTANT MEMBER ( & . ' ( ) (G. PAVAN KUMAR) ) $% / JUDICIAL MEMBER *& / CHENNAI + / DATED: 2ND JUNE, 2016. KV ' $'-. /.' / COPY TO: 1 . ! / APPELLANT 2. $% ! / RESPONDENT 3. 0' () / CIT(A) 4. 0' / CIT 5. .3 4 $'5 / DR 6. 4 6 7 & / GF