Usharani, CHENNAI V. ACIT, CHENNAI

ITA 301/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96463 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 12-11-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 04-02-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR U ANJANEYULU IRS
• Assessee Lawyers: M ROSIAH
• Keywords: Wrong claim
• Section: 142(1); 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , ! , ' #$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A. NO.301/MDS/2015 ( / ASSESSMENT YEAR : 2007-2008) USHARANI, OLD NO.33,NEW NO.60, RAGHAVAN COLONY, VADAPALANI, CHENNAI 600 026. [PAN: AAKPU 1483F] ( %& /APPELLANT) VS THE COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE (A) -19, CHENNAI 600 034. ( !'%& /RESPONDENT) / APPELLANT BY : SHRI. M. ROSIAH, C.A. / RESPONDENT BY : DR. U. ANJANEYULU, IRS, CIT. /DATE OF HEARING : 12.11.2015 !' /DATE OF PRONOUNCEMENT : 20.11.2015 ( / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-19, CHENNAI, D ATED 27.11.2014 FOR THE ASSESSMENT YEAR 2007-08. I.T.A.NO.301/MDS/2015 :- 2 -: 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS WI TH REGARD TO CONFIRMING THE LEVY OF PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT AT C1,98,420/- 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED H ER RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 ON 20.2.2008 ADM ITTING A TOTAL INCOME OF C3,72,393/-. THE SOURCE OF INCOME HAS BEE N SHOWN AS INCOME FROM OTHER SOURCES. AS DISCUSSED IN THE CA SE OF SHRI MAINRAJ, AS A RESULT OF THE SURVEY/SEARCH CONDUCTED IN THE CASE OF M/S RAJARATHINAM CONSTRUCTIONS PVT. LTD ON 27.2.2008, I T WAS NOTICED THAT THE ASSESSEE HAD SOLD A PIECE OF LAND MEASURING 3.5 CENTS SITUATED AT PERUMBAKKAM VILLAGE FOR A CONSIDERATION OF C6,75,00 0/-. THE RELEVANT DETAILS OF THIS TRANSACTION ARE AS UNDER: SL.NO NAME OF SELLER EXTENT OF LAND CONSIDERATION C NATURE OF DOCUMENT DATE 01 SMT. USHARANI 3.5 CENTS 6,75,000/- SALE DEED 01.03.2007 IN THIS BACKGROUND, THIS CASE WAS NOTIFIED TO CENTR AL CIRCLE III(2) VIDE NOTIFICATION NO.13/2008-09 DATED 23.12.2008 IN C.NO.6121/CENTRN/2008-9/VI, AS A RESULT OF WHICH A NOTICE U/S 148 WAS ISSUED ON 14.12.2009. SUBSEQUENTLY, NOTICES U/S 143 (2) AND 142(1) WERE ISSUED ON 23.12.2009. THESE NOTICES WERE COMPL IED WITH AS THE I.T.A.NO.301/MDS/2015 :- 3 -: ASSESSEES LD.AR APPEARED AND FILED THE REQUISITE D ETAILS. THE MAIN ISSUE IN THIS CASE IS WITH REGARD TO CAPITAL GAINS ON THE SALE OF PIECE OF LAND. THE ASSESSEE CLAIMED AN EXPENDITURE OF C8,15 ,000/-. OUT OF TOTAL EXPENSES OF C8,15,100/- CLAIMED ON ACCOUNT OF DEALERS COMMISSION AT C5,16,650/-, MARKETING EXPENSES OF C 2,98,450/-. THE LD. CIT(A) HAS ALLOWED C 7 LAKHS BECAUSE THE ENTIR E EXPENSES ARE NOT PROPERLY EXPLAINED. ON APPEAL TO TRIBUNAL, IT WAS H ELD THAT THE DISALLOWANCE WHICH IS ON LOWER SIDE WOULD NOT ENTAI L TRIBUNAL TO INTERFERE IN THE LD. CIT(A)S ORDER, HENCE, THIS IS SUE IS DECIDED AGAINST THE ASSESSEE. MEANWHILE THE ASSESSING OFFICER LEVIE D PENALTY U/S.271(1) (C) OF THE ACT VIDE ORDER DATED 24.02.20 12 ON THE REASON THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICUL ARS OF INCOME AND MADE WRONG CLAIM TOWARDS MARKETING EXPENSES AND DEA LERS COMMISSION AND FAILED TO PRODUCE ANY EVIDENCE TOWAR DS THE SAME. AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE COMMISSIONER OF INCOME TAX (APPEALS). 4. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS ) OBSERVED THAT IT IS AN UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSESSEE HAD MADE THE CLAIM OF DEALERS COMMISSION A ND MARKETING EXPENSES OF C5,16,650/- AND C2,98,450/- RESPECTIVEL Y AGAINST BUSINESS I.T.A.NO.301/MDS/2015 :- 4 -: INCOME, HOWEVER, THE ASSESSEE HAS NOT FURNISHED AN Y DETAILS OF THESE EXPENSES BEFORE THE COMMISSIONER OF INCOME TAX (APP EALS) NOR BEFORE THE ASSESSING OFFICER. IT WAS OBSERVED BY CO MMISSIONER OF INCOME TAX (APPEALS) THAT THE AFORESAID ADDITIONS T O THE INCOME OF THE ASSESSEE, IS APPARENT FROM THE PENALTY ORDER UNDER APPEAL, WHAT UPHELD BOTH BY THE THEN COMMISSIONER OF INCOME TAX (APPEALS) AND THE TRIBUNAL. FROM THE FACTS ON RECORDS, IT IS APP ARENT THAT THE ASSESSEE HAD MADE A WRONG CLAIM OF THE AFORESAID EX PENDITURE WHICH COULD NOT BE PROVEN TO HAVE BEEN INCURRED. THE AFOR ESAID WRONG CLAIM OF EXPENDITURE RESULTED IN FURNISHING OF INACCURATE PARTICULARS OF INCOME OF THE ASSESSEE RESULTING IN CONCEALMENT OF INCOME. THE ASSESSEE HAD NOT BROUGHT ANY MATERIAL OR EVIDENCE O R RECORD EVEN DURING THE COURSE OF PENALTY PROCEEDINGS BEFORE THE ASSESSING OFFICER WITH REGARD TO INCURRING OF THE AFORESAID EXPENSES. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) ALSO THE ASSES SEE HAS NOT BROUGHT ANY MATERIAL OR EVIDENCE ON RECORD TO SHOW THAT THE CLAIM OF THE ASSESSEE WAS A GENUINE CLAIM. IN VIEW OF THESE FACTS OF THE CASE, THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE PENALTY LEVIED BY THE ASSESSING OFFICER. AGAINST THIS, THE ASSESSE E IS IN APPEAL BEFORE US. I.T.A.NO.301/MDS/2015 :- 5 -: 5. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, CONSEQUENT TO SEARCH /SURVEY ACTION IN THE CASE OF M/S. RAJARATHINAM CONSTRUCTIONS P. LTD, THE DOCUME NTS RELATING TO THE PURCHASE OF PROPERTY BY ASSESSEE WAS FOUND AND IT C AME TO KNOW THAT M/S. RAJARATHINAM CONSTRUCTIONS P. LTD PURCHASED L AND LOCATED AT PERUMBAKKAM VILLAGE FOR C6,75,000/- FROM ASSESSEE. HOWEVER, THE ASSESSEE HAD NOT ADMITTED LONG TERM CAPITAL GAINS I N RESPECT OF SALE OF PROPERTY EVEN AFTER ISSUANCE OF NOTICE U/S.148 OF T HE ACT. THE ASSESSEE MADE A WRONG CLAIM TOWARDS DEALERS COMMISSION AT C 5,16,650/- AND MARKETING EXPENSES OF C2,98,450/- RESPECTIVELY FOR WHICH NO NEW EVIDENCE WAS PRODUCED. THIS QUANTUM ADDITION WAS S UBJECT MATTER OF APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEA LS). THE COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED THE EXPENDITURE AT C7,00,000/-. HOWEVER, THE FINDINGS ON THIS ADDITIO N WAS CONFIRMED BY COMMISSIONER OF INCOME TAX (APPEALS) IN ITS ENTIRET Y. ADMITTEDLY, THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE THE CLAIM MAD E BY HER. HOWEVER, THE ASSESSING OFFICER WHILE COMPUTING THE PENALTY CONSIDERED ENTIRE DISALLOWANCE OF C8,15,000 /- THOUGH AT THIS STAGE ADDITION WAS SUSTAINED WAS ONLY C2,15,000/-. TO TH AT EXTENT THE ASSESSEE SHALL GET RELIEF. IN OTHER WORDS, IN VIEW OF THE FAILURE ON THE PART OF THE ASSESSEE TO SUBSTANTIATE THE EXPENDITUR E OF C2,15,000/- I.T.A.NO.301/MDS/2015 :- 6 -: TOWARDS DEALERS COMMISSION AND MARKETING EXPENSES P ENALTY TO BE LEVIED U/S.271(1) (C) OF THE ACT AS THERE IS NO BON AFIDE EXPLANATION FROM THE ASSESSEE TO THIS EFFECT AND THERE IS FURNI SHING OF INACCURATE PARTICULARS OF INCOME. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE PENALTY U/S.271(1)(C) OF THE ACT TOWA RDS THE ADDITIONS SUSTAINED AT C2,15,000/- ONLY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.301/MDS/2015 IS PARTLY ALLOWED . ORDER PRONOUNCED ON FRIDAY, THE 20 TH DAY OF NOVEMBER, 2015, AT CHENNAI. SD/- SD/- ( ! ) (CHALLA NAGENDRA PRASAD) ' / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER #$ /CHENNAI. %& /DATED:20.11.2015. KV &' () *) /COPY TO: 1. + APPELLANT 2. / RESPONDENT 3. , ( )/CIT(A) 4. , /CIT 5. )-. / /DR 6. .0 1 /GF.