C.Harish, Hyd, Hyderabad V. ITO, Ward-6(3), Hyderabad, Hyderabad

ITA 346/HYD/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6278 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 21-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E SUNIL BABU
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained cash credit; Unexplained investment; Search and seizure
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO. 346 & 347/HYD/2016 ASSESSMENT YEAR : 2002-03 & 2003-04 C. HARISH, HYDERABAD. VS. INCOME TAX OFFICER, WARD 6(3), HYDERABAD. PAN: AATPC 3961 D APPELLANT RESPONDENT FOR ASSESSEE: SHRI S. RAMA RAO (AR) FOR REVENUE: SHRI K.E. SUNIL BABU (D.R.) DATE OF HEARING: 21/07/2016 DATE OF PRONOUNCEMENT: 27/07/2016 O R D E R PER: LALIET KUMAR, J.M. : BOTH THE APPEALS ARE BEING FILED BY THE ASSES SEE ARISE AGAINST THE ORDERS DATED 29/01/2015 AND 23/12/2015 PA SSED BY THE LD. CIT(A)-9, HYDERABAD FOR THE A.Y. 2002-03 AND 2003- 04 WHEREBY THE LD. CIT(A) HAS UPHELD THE IMPOSITION O F PENALTY LEVIED AT RS. 33,676/- AND 30,351/-. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN BOTH THE CASES ARE REPRODUC ED AS UNDER:- I.T.A. NO. 346 & 347/HYD/2016 C.HARISH VS ITO :- 2 -: (1) THE ORDER OF THE LD. CIT(A) IS ERRONEOUS BOTH O N FACTS AND IN LAW. (2) THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS. 33,676/- IN THE A.Y. 2002-03 AND RS. 30,351/- IN TH E A.Y. 2003-04 U/S 271(1)(C) OF THE I.T. ACT. (3) THE LD. CIT(A) OUGHT TO HAVE SEEN THAT THERE IS NO CONCEALMENT OF INCOME AND, THEREFORE, OUGHT TO HAVE DELETED THE PENALTY LEVIED. 2. FIRST WE TAKE ITA NO. 346/HYD/2016. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT, 1961 (IN SHO RT THE ACT) WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 19/2/2008. THE ASSESSMENT WAS COMPLETED ON 31/12/200 9 DETERMINING THE TOTAL INCOME OF RS. 6,01,256/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMI TTED THE ACCOUNTS SHOWING RS. 1,19,000/- AS THE ADVANCES RECEI VED DURING THE YEAR. THE ASSESSEE WAS CALLED UPON TO FUR NISH THE DETAILS OF LOAN ALONGWITH CONFIRMATION LETTER. HOWEVER , THE ASSESSEE FAILED TO GIVE THE DETAILS AND CONFIRMATION LE TTER. SINCE THE ORDER HAS FAILED TO PROVE THE GENUINENESS, IDENTITY AND CREDITWORTHINESS OF THE CREDITORS, HENCE, AN AMOUNT O F RS. 1,19,000/- WAS TREATED AS UNEXPLAINED CREDITS AND THE SAME WAS TAXED BY THE LD. A.O. I.T.A. NO. 346 & 347/HYD/2016 C.HARISH VS ITO :- 3 -: 3. BEING AGGRIEVED BY THE ORDER OF THE LD. A.O., THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A). HOWEVER, BEF ORE THE LD. CIT(A), THE LD. AR DID NOT PRESS THE AMOUNT AND ACCORDI NGLY, THE ADDITION OF RS. 1,19,000/- MADE BY THE LD. A.O. WAS C ONFIRMED. 4. THOUGH, THE APPEAL AGAINST THE ORDER PASSED BY THE L D. CIT(A) WAS PREFERRED BEFORE THE ITAT. HOWEVER, THIS G ROUND BEING ALREADY AGREED BY THE AR WAS NOT CHALLENGED BEF ORE THE TRIBUNAL, THEREFORE, THE FINDING OF THE LD. AO BECAME FINAL IN RESPECT OF ADDITION OF RS. 1,19,000/-. 4.1 THE LD. AR, BEFORE US HAS SUBMITTED THAT THE RECORDS BEING VERY OLD AND THEREFORE WAS NOT ABLE TO PRODUCE THE REC ORD DURING THE ASSESSMENT PROCEEDINGS AND APPELLATE PROCE EDINGS. THE LD. AR HAS SUBMITTED THAT THE PENALTY SHOULD. NOT BE LEVIED BY THE AUTHORITIES BELOW AS THE ASSESSEE HAS VOLUNTARILY SURRENDERED THE AMOUNT AND HAS OFFERED THE SAME TO THE TA X DURING THE ASSESSMENT PROCEEDINGS. THE LD. A.O., AFTE R RECORDING THE SUBMISSIONS OF THE ASSESSEE HAS IMPOSED THE PENALT Y OF RS. 33,676/- ON THE ASSESSEE. THE SAME WAS DULY CONFIRM ED BY THE LD. CIT(A) WITH THE FOLLOWING REASONS:- 4.2 DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE ARGUED THAT THE APPELLANT DID NOT MAINTAIN BOOKS OF I.T.A. NO. 346 & 347/HYD/2016 C.HARISH VS ITO :- 4 -: ACCOUNT AND THEREFORE, COULD NOT FURNISH THE DETAIL S OF ADVANCES RECEIVED OF RS. 1,19,000/-. THE ASSESSEE FURTHER ARGUED THAT THE DETAILS COULD NOT BE FURNIS HED DUE TO LAPSE OF TIME AND THAT THIS AMOUNT CANNOT BE CONSIDERED AT CONCEALED INCOME. 4.3 THE CONTENTIONS OF THE ASSESSEE ARE NOT ACCEPTA BLE AS THE ASSESSEE FAILED TO FURNISH ANY DETAILS OR ANY CONFIRMATION LETTER WITH REGARD TO THIS AMOUNT EITH ER DURING THE ASSESSMENT PROCEEDINGS OR DURING THE APPELLATE PROCEEDINGS. THUS, THE ASSESSEE HAS FAILE D TO ESTABLISH THE GENUINENESS, IDENTITY AND CREDITWORTHINESS OF THE CREDITORS. FURTHER HE HAS A LSO NOT CONTESTED THIS ADDITION BEFORE THE APPELLATE AUTHORITIES. IT IS EVIDENT THAT THE ASSESSEE HAD NO EXPLANATION TO OFFER AND NO BASIS TO CONTEST THE ADDITION AS HE WAS WELL AWARE THAT HE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. AS THE ASSESSEE FAILED TO FURNISH EXPLANATION FOR THESE ADVANCES, T HE AMOUNT WAS TREATED AS UNEXPLAINED AND CONSIDERED AS HIS INCOME. THUS, THE ASSESSEE HAS CONCEALED HIS INCOME TO THAT EXTENT. THEREFORE, THE ASSESSEES ARGUMENT THAT HE DID NOT MAINTAIN REGULAR BOOKS OF ACCOUNT AND NOT ABLE TO FURNISH THE DETAILS DUE TO LAPSE OF TIME IS NOT TENABLE, AND THIS DEFINITELY AMOUNTS TO CONCEALMENT OF INCOME. 4.4 I PLACE RELIANCE ON THE FOLLOWING CASE LAWS: (I) LOKNATH CHOWDHARY VS CIT (CAL) 155 ITR 29. I.T.A. NO. 346 & 347/HYD/2016 C.HARISH VS ITO :- 5 -: (II) RAHMAT DEVFT & ENGINEERING CORPORATION VS CIT (CAL) 130 ITR 602. (III) CIT VS RATTAM SINGH GREWAL (P&H) 304 ITR 75. (IV) CHARNDATT H. DANGET VS INCOME TAX OFFICER (ITAT MUMBAI) 126 ITO 483. IN THE ABOVE CASES, IT WAS HELD. THAT UNEXPLAINED INVESTMENT IS DEEMED TO BE INCOME FOR THE PURPOSE O F LEVYING PENALTY IF NO SATISFACTORY EXPLANATION IS OFFERED AND PENALTY IS LEVIABLE. THESE DECISIONS AR E SQUARELY APPLICABLE IN THE ASSESSEES CASE AS HE HA S NOT FURNISHED SATISFACTORY EXPLANATION EITHER DURIN G THE ASSESSMENT PROCEEDINGS OR THE APPELLATE PROCEEDINGS. THEREFORE, I AM OF THE CONSIDERED OPIN ION THAT THE ASSESSING OFFICER IS JUSTIFIED IN LEVYING THE PENALTY AND HENCE THE PENALTY LEVIED OR RS. 33,676/ - IS HEREBY UPHELD. SIMILAR FINDING HAS BEEN GIVEN BY THE LD. CIT(A) FOR THE CASE OF A.Y. 2003-04. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE US. THE LD. AR OF THE ASSESSEE HAS ARGUED THAT THE RECORD PERTAINING TO A.Y. 2 002-03 WAS NOT AVAILABLE ON ACCOUNT OF DELAY AND IT WAS FURTHE R SUBMITTED THAT HE VOLUNTARILY SURRENDERED THE AMOUNT DURIN G THE ASSESSMENT PROCEEDINGS. FURTHER IT WAS SUBMITTED THAT T HE I.T.A. NO. 346 & 347/HYD/2016 C.HARISH VS ITO :- 6 -: EXPLANATION WAS GIVEN BY THE ASSESSEE DURING THE COURS E OF PENALTY PROCEEDINGS. 6. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT NO EXPLANATION WAS GIVEN BY THE LD. AR EITHER BEFORE THE L D. A.O. OR BEFORE THE LD. CIT(A) OR BEFORE THE HONBLE TRIBUNAL. THEREFORE, THE PENALTY IMPOSED BY THE LD. A.O. IS REQUIRED TO BE UPHELD. 7. WE HAVE GONE THROUGH THE RIVAL CONTENTIONS OF BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE ORIGINAL ASSESSMENT ORDER DATED 31/12/2009, NO ADDIT IONS WERE MADE BY THE LD. A.O. HOWEVER, ON ACCOUNT OF THE SEAR CH CONDUCTED IN THE PREMISES OF THE ASSESSEE, THE ADDITION OF RS. 1,19,000/- WAS MADE. NO INCRIMINATING MATERIALS WERE FOUND DURING THE COURSE OF SEARCH RELATABLE TO THE PRESENT ADD ITION. MOREOVER, THE EXPLANATION GIVEN BY THE ASSESSEE THAT ON ACCOUNT OF LAPSE OF TIME IS NOT IN A POSITION TO FURNIS H THE REQUIRED DETAILS BEFORE THE LD A.O. DURING THE PENALT Y PROCEEDINGS, IN OUR VIEW IS A REASONABLE . THE EXPL ANATION GIVEN BY THE ASSESSEE IS PLAUSIBLE AND IS REQUIRED TO BE AC CEPTED FOR THE PURPOSES OF NON-IMPOSITION OF PENALTY. ACCORDING LY, THE PENALTY LEVIED BY THE AUTHORITIES BELOW IS DIRECTED TO BE DELETED. I.T.A. NO. 346 & 347/HYD/2016 C.HARISH VS ITO :- 7 -: 8. IN RESPECT OF APPEAL NO. 347/HYD/2016, THE LD. A.O . HAS MADE THE ADDITION OF RS. 96,354/-. HOWEVER, THE LD. CI T(A) SUSTAINED THE ADDITION OF RS. 96,354/- ON THE GROUND TH AT THE AR OF THE ASSESSEE DID NOT PRESS THE GROUND RELATING TO RS. 96,354/-. ON THE BASIS OF THE ADDITION MADE BY THE LD. A.O., THE PENALTY WAS LEVIED AFTER GIVING A NOTICE TO THE ASSES SE FOR AN AMOUNT OF RS. 30,351/-. SIMILAR ARGUMENT WERE RAISED BEFORE THE LD. A.O. AND LD. CIT(A) FOR IMPOSITION OF PENALTY BY THE ASSESSEE, WHICH ARE MENTIONED HEREINABOVE IN THE ITA NO. 346/HYD/2016. IN THIS CASE ALSO, NO INCRIMINATING MA TERIAL WAS FOUND DURING THE COURSE OF SEARCH, WHICH CALLED FOR ADDITION OF THE IMPUGNED AMOUNT. WE HEREBY ALLOW THE APPEAL OF THE ASSESSEE ON THE SAME ANALOGY BY APPLYING THE SAME LOG IC AS WE HAVE APPLIED IN RESPECT OF ITA NO. 346/HYD/2016. ACC ORDINGLY, THIS APPEAL IS ALSO ALLOWED. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/07/2016. SD/- SD/- ( B. RAMAKOTAIAH ) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 27 TH JULY, 2016 *RANJAN I.T.A. NO. 346 & 347/HYD/2016 C.HARISH VS ITO :- 8 -: COPY FORWARDED TO: 1. C. HARISH, C/O-SRI S RAMA RAO, ADVOCATE, FLAT NO. 102 , SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAYATNAG AR, HYDERABAD-500029. 2. THE ITO, WAD 6(3), HYDERABAD. 3. CIT(APPEALS)-9, HYDERABAD. 4. PR.CIT-4, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.