M. Rajalingam Goud, Hyd, Hyderabad V. ACIT, Central Circle-11(1), Hyd, Hyderabad

ITA 367/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2511 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 22-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAH MAN, ACCOUNTANT MEMBER ITA NOS. 367 & 368/HYD/2016 (AYS 2008 - 09 & 2009 - 10) M. RAJALINGAM GOUD, HYDERABAD. PAN: AARPM 4779 P VS. ACIT, CENTRAL CIRCLE - 11(1), HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE: NONE FOR REVENUE : SHRI SUNKU SRINIVAS, DR DATE OF HEARING : 26 .10 .2017 DATE OF PRONOUNCEMENT : 26 .10 .2017 ORDER PER S. RIFAUR RAHMAN, AM : THESE TWO APPEALS ARE FILED BY ASSESSEE AND THEY PERTAIN TO ASSESSMENT YEARS 2008 - 09 AND 2009 - 10. 2. PENALTY LEVIED U/S 271(1)(C) OF THE ACT HAVING BEEN CONFIRMED BY LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE CASE S WERE POSTED FROM TIME TO TIME BUT , NONE APPEARED FOR ASSESSEE. EVEN THOUGH A NOTICE WAS SERVED UPON THE ASSESSEE, NONE APPEARED TODAY. THEREFORE, WE HAVE NO OTHER ALTERNATIVE EXCEPT TO DISPOSE OF THE APPEAL S , EX - PARTE , QUA ASSESSEE. 3. WE WOULD LIKE TO CLARIFY THAT THOUGH THE ASSESSE E, VIDE GROUND NO.2, SUBMITTED THAT THEY ARE AWAITING FOR THE FATE OF QUANTUM APPEALS PENDING BEFORE ITAT, HYDERABAD, NO INFORMATION WITH REGARD TO DATE OF FILING OF THE APPEALS ETC., WERE PLACED BEFORE US. LD DR, IN GENERAL AS WEL L AS IN THIS SPECIFIC CA SE, WAS OF THE OPINION THAT IN AN APPEAL FILED BY THE ASSESSEE THEY NEED NOT HAVE TO MAKE ANY EFFORT TO OBTAIN THE INCOME TAX APPEAL NOS OR THE FACTS MENTIONED IN QUANTUM PROCEEDINGS. THUS VIRTUALLY WE COULD NOT GET ANY ASSISTANCE FROM LD D R EXCEPT FOR THE FACT THAT HE STRONGLY RELIED UPON ORDERS PASSED BY A.O. AS WELL AS LD. CIT(A). 4. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 07.08.2008 AND THEREAFTER , THE MATTER WAS TAKEN UPON BY REGULAR 2 ASSESSING OFFICER WHEREIN IT WAS NOTICED THAT ASSESSEE CONSTRUCTED A PALATIAL HOUSE BY SHOWING COST OF CONSTRUCTION OF BUILDING AT RS. 35 LAKHS IN THE YEAR 2007 - 08. THE DVO, IN HIS REPORT, ESTIMATED THE COST OF CONSTRUCTION AT RS. 76,14,000/ - . THOUGH THE A SSESSEE OBJECTED TO THE VALUATION, NO MATERIAL WAS PLACED ON RECORD EXCEPT STATING THAT INVESTMENT WAS IN THE NAME OF WIFE. S INCE ASSESSMENT WAS GETTING BARRED BY LIMITATION, A.O. PROCEEDED TO COMPLETE THE ASSESSMENT BY TAKING INTO ACCOUNT THE DVOS VALUA TION AND ACCORDI NGLY ADDED A SUM OF RS. 7,14,000/ - AS UNDISCLOSED INVESTMENT . HE HAS ALSO ADDED A SUM OF RS. 20 LAKHS , REFERABLE TO UNDISCLOSED INVESTMENT IN FIXED DEPOSITS (FD) MADE IN THE FAMILY MEMBERS NAMES , WHICH WAS IN FACT OFFERED TO TAX BY ASSES SEE IN THE STATEMENT RECORDED U/S 132(4) OF TH E ACT. THUS ASSESSMENT FOR A.Y. 2008 - 09 WAS COMPLETED ON A TOTAL INCOME OF RS. 97,51,250/ - . 5. FOR A.Y. 2009 - 10, A.O. NOTICED UNACCOUNTED CASH, UNACCOUNTED JEWELLERY , UNDISCLOSED CAPITAL GAINS ON RELINQUISHMEN T OF RIGHTS AND ACCORDINGLY COMPLETED ASSESSMENT ON A TOTAL INCOME OF RS. 82,48,130/ - AS AGAINST ADMITTED INCOME OF RS. 1,39,000/ - . 6. CONSEQUENTLY , PENALTY PROCEEDINGS WERE INITIATED. IN THE ORDER PASSED U/S 271(1)(C) OF THE ACT FOR THE A.Y. 2008 - 2009, A .O. TOOK NOTE OF THE FACT THAT LD. CIT(A) GAVE RELIEF OF RS. 32 LAKHS OUT OF ADDITION OF RS. 76.14 LAKHS AND FINALLY PENALTY WAS LEVIED BY TAKING INTO ACCOUNT UNDISCLOSED AMOUNT EITHER FROM FDS OR FROM HOUSE PROPERTY I.E., TO THE TUNE OF RS. 64.16 LAKHS , W HICH WAS CONFIRMED BY LD. CIT(A) BY OBSERVING AS UNDER: 6. I HAVE EXAMINED THE FACTS OF THE CASE. WITH RESPECT TO INVESTMENTS MADE IN FIXED DEPOSITS AMOUNTING TO RS . 20 LAKHS, THE ASSESSEE HAS ADMITTED THE INVESTMENTS BUT COULD NOT FURNISH ANY EXPLANATION OR SOURCES, THEREOF DURING THE SEARCH OPERATION AND THEREAFTER. EVEN THOUGH HE HAS OFFERED THE SAID FIXED DEPOSIT AS UNDISCLOSED INCOME DURING THE COURSE OF SEARCH , HE HAS NOT DISCLOSED THE SAME AS RETURNED INCOME IN RESPONSE TO RETURN FILED U/S 153A. THE ASSESSEE ONLY RELIED ON EARLIER RETURN, THUS NO DISCLOSURE WAS MADE IN 153A. WITH RESPECT TO UNDISCLOSED INVESTMENTS IN THE BUILDING THE LD. CIT(A) WHILE DECIDING THE QUANTUM ADDITION HAD REDUCED RS. 32 LAKHS WHICH IS SHOWN IN THE RETURN OF INCOME OF THE WIFE OF THE ASSESSEE. FOR THE REMAINING AMOUNT THERE WAS NO EXPLANATION AND IT WAS ALREADY HELD BY THE LD. CIT(A) AS WELL AS THE A.O. AS THE UNDISCLOSED INVESTMEN TS MADE BY THE ASSESSEE. 7. DURING THE PENALTY PROCEEDINGS BEFORE THE A.O. NO EXPLANATION WAS OFFERED. THE ONLY EXPLANATION GIVEN AS NARRATED BY THE A.O. IS AS FOLLOWS: IN RESPONSE TO THE PENALTY NOTICE, THE ASSESSEE HAS STATED THAT AT THE TIME OF SEARCH ON HIS PREMISES, THE OFFICER HAS PROMISED HIM NOT TO LEVY PENALTY IF HE COOPERATES WITH THEM IN DECLARING THE INCOME AND FURTHER STATED THAT DUE TO THEIR ASSURANCE HE HAD DECLARED THE INCOME. THE REPLY HAD ALREADY BEEN SUBMITTED TO THE THEN A.O. FOR THE NOTICE ISSUED ON 30.12.2010. 3 8. DURING APPELLATE PROCEEDINGS THE APPELLANT DID NOT PROVIDE ANY EXPLANATION. THE HEARING WAS FIXED ON SEVERAL DATES AND THERE ARE REPEATED REQUESTS FOR ADJOURNMENTS. THE HEARING WAS FIXED ON 12.09.2014, 08.10.2014, 20.10. 2014, 10.11.2014, 22.12.2014, 12.01.2015, 20.01.2015, 10.08.2015, 11.11.2015, 29.12.2015 & 22.01.2015. ONLY ON ONE OCCASION, THE AUTHORIZED REPRESENTATIVE HAD SUBMITTED THE WRITTEN SUBMISSION, IN WHICH ONLY CONTENTION OF THE APPELLANT IS THAT THE QUANTUM ADDITION IS PENDING BEFORE THE HONBLE ITAT. HENCE TO KEEP THE PROCEEDINGS IN ABEYANCE, THIS CONTENTION OF THE APPELLANT IS NOT ACCEPTABLE, AND THE CASE IS DECIDED ON THE BASIS OF MERIT. 9. PENALTY U/S 271(1)(C) IS ALWAYS THE OUTCOME OF CONCEALMENT OF INC OME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN THE PRESENT CASE IT IS A CASE OF CONCEALMENT OF INCOME, WHERE SOME INCOME EARNED BY THE ASSESSEE IS TAKEN BACK AND NOT OFFERED FOR TAXATION. THE SEARCH OPERATION LED TO DETECTION OF UNACCOUNTED INC OME OF THE ASSESSEE. THERE ARE POSITIVE FINDINGS OF UNDISCLOSED INVESTMENTS IN FDR AND HOUSE PROPERTY. THERE IS DETECTION OF UNDISCLOSED INVESTMENTS IN FDR CONSEQUENT TO SEARCH & SEIZURE OPERATION. FURTHER, THE UNDISCLOSED INVESTMENTS IN HOUSE PROPERTY W AS ESTABLISHED BY THE ASSESSING OFFICER AND SUBSEQUENTLY, CONFIRMED BY THE CIT (A). DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE FAILED TO EXPLAIN WHY THE PENALTY SHOULD NOT BE LEVIED ON SUCH DETECTION OF CONCEALMENT. HENCE, I CONFIRM THE PENALTY OF RS . 21,66,180/ - AS DETERMINED BY THE A.O. 7. SIMILARLY FOR THE A.Y. 2009 - 10, A.O. TOOK INTO CONSIDERATION THE OBSERVATIONS OF LD. CIT(A) AND ALSO FACTS OF THE CASE TO LIMIT THE PENALTY WITH REGARD TO UNDISC LOSED CAPITAL GAINS OF RS. 64,80,000/ - AND THU S PENALTY OF RS. 14, 68,370/ - WAS LEVIED ON THE GROUND THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME . 8. THIS WAS CONFIRMED BY LD. CIT(A) ON THE GROUND THAT ASSESSEE DID NOT AVAIL SUFFICIENT OPPORTUNITIES GRANTED BY LD. CIT(A) AND NO OTHER EVIDENCE WAS PLACED TO CONTRADICT THE FINDING OF A.O. 9. EVEN BEFORE US, NO EVIDENCE WAS PLACED TO CONTRADICT THE FINDINGS OF A.O. AS WELL AS LD. CIT(A). UNDER THESE CIRCU MSTANCES, WE HAVE NO OTHER ALTERNATIVE EXCEPT TO CONFIRM THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT, BASED ON THE CONCURRENT FINDING S OF A.O. AS WELL AS LD. CIT(A). 10. IN THE RESULT, APPEALS FILED BY ASSESSEE ARE DISMISSED, AS PRONOUNCED IN THE OPEN COUR T. SD/ - SD/ - ( D. MANMOHAN ) ( S. RIFAUR RAHMAN ) VICE PRESIDENT ACCOUNTANT MEMBER HYDERABAD, DATED: 26 TH OCTOBER , 2017 OKK, SR.PS 4 COPY TO 1. M. RAJALINGAM GOUD, PLOT NO.145, IDPL CROSS PUNE, IDPL CROSS ROAD, QUTUBULLAPUR, HYDERABAD. 2. ACIT, CIRCLE - 11(1), HYDERABAD. 3. CIT(A) - 5 , HYDERABAD. 4. PR. CIT - 5 , HYDERABAD . 5. D.R. ITAT A BENCH, HYDERABAD. 6. GUARD FILE