Sai Televisions Ltd., CHENNAI V. ITO, Kolkata

ITA 373/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7849 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-12-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 17-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: R SIVARAMAN
• Keywords: Unexplained investment; Opportunity of being heard; Corroborative evidences
• Section: 147; 69; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . . . , . , % BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NOS.372 & 373/MDS/2015 ( / ASSESSMENT YEAR: 2005-06) M/S. SAI TELEVISIONS LTD. 36, WALLAJAH ROAD, CHENNAI-600 002. VS THE INCOME TAX OFFICER, WARD-3(2), KOLKATTA. PAN:AALCS2587G ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. R.SIVARAMAN, ADVOCATE /RESPONDENT BY : DR.B.NISCHAL, JCIT /DATE OF HEARING : 30 TH DECEMBER, 2015 /DATE OF PRONOUNCEMENT : 4 TH MARCH, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AGGRIE VED BY THE SEPARATE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-15, CHENNAI DATED 13.01.2015 I N ITA NO.1596 &1062/13-14/A-15 PASSED UNDER SECTION 144/ 147 R.W.S.250 AND 271(1)(C) OF THE ACT. ITA NO.372/MDS/2015:- 2. THE ONLY GROUND RAISED BY THE ASSESSEE IN ITS AP PEAL IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN CONFIRMING THE ADDITION OF ` 200,82,00,000/- MADE BY 2 ITA NOS.372 & 373 /MDS/2015 THE LEARNED ASSESSING OFFICER AS UNEXPLAINED INVEST MENT UNDER SECTION 69 OF THE ACT. ITA NO.373/MDS/2015:- 3. THE ASSESSEE IN THIS APPEAL CHALLENGES THE IMPU GNED ORDER ON THE GROUND THAT THE LEARNED COMMISSIONER O F INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE P ENALTY OF ` 72,93,844/- LEVIED BY THE LEARNED ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT. ITA NO.372/MDS/2015:- 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-06 ON 31.10.2005 DECLARING LOSS OF RS.1,58,877/-. SUBSEQU ENTLY, IN PURSUANCE TO THE ORDER OF THE CALCUTTA BENCH OF THE TRIBUNAL DATED 2.2.2012, ASSESSEE WAS GIVEN AN OPPORTUNITY OF BEING HEARD BY THE LEARNED ASSESSING OFFICER TO VERIFY TH E SOURCE OF INVESTMENT MADE BY THE ASSESSEE FOR RS.200,82,00,00 0/- . SINCE THE ASSESSEE DID NOT CO-OPERATE WITH THE REVE NUE AND FAILED TO EXPLAIN THE SOURCE OF INVESTMENT FOR RS.200,82,00,000/-, THOUGH SEVERAL OPPORTUNITIES WE RE PROVIDED, THE LEARNED ASSESSING OFFICER MADE ADDITI ON OF 3 ITA NOS.372 & 373 /MDS/2015 RS.200,82,00,000/- AS UNEXPLAINED INVESTMENT. IN T HE FIRST APPELLATE STAGE ALSO, THE ASSESSEE COULD NOT ESTABL ISH BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) TH E SOURCE OF INVESTMENT FOR THE AFORESAID AMOUNT. HENC E, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIR MED THE ADDITION OF RS.200,82,00,000/- IN THE HANDS OF THE ASSESSEE AS UNEXPLAINED INVESTMENT UNDER SECTION 69 OF THE ACT BY HOLDING AS UNDER:- I HAVE CONSIDERED THE SUBMISSIONS OF THE AR OF THE APPELLANT AS WELL AS THE FINDINGS GIVEN IN THE ASSESSMENT ORDER CAREFULLY. AS STATED IN THE ORDER OF ASSESSMENT, THE AO HAD GIVEN AMPLE OPPORTUNITIES VIDE HIS OFFICE LETTERS DATED 05.11.2012, 24.01.2013 AND 18.02.2013 TO FURNISH THE DETAILS OF THE SOURCES OF INVESTMENTS MADE OF RS.2,00,82,000/- NO COMPLIANCE WAS MADE BEFORE THE AO EVEN IN THE SECOND ROUND OF ASSESSMENT PROCEEDINGS. EVEN BEFORE THE APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT WAS GIVEN NUMEROUS OPPORTUNITIES TO FURNISH THE EVIDENCES IN SUPPORT OF ITS CLAIM MADE IN THE GROUNDS OF APPEAL FILED. NO MATERIAL EVIDENCE WAS ALSO FILED BEFORE T HE UNDERSIGNED TO PROVE ITS CLAIM MADE IN THE GROUNDS OF APPEAL. MERE CLAIM THAT INVESTMENTS WERE MADE PRIOR TO THE FINANCIAL YEAR RELEVANT TO THE A.Y. UN DER CONSIDERATION WITHOUT SUPPORTING EVIDENCES IS NOT SUFFICIENT FOR ALLOWING THE GROUNDS OF APPEAL. EVEN DURING THE COURSE OF THE PRESENT APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT WAS SPECIFICALLY REQUIRED TO FURNISH THE MATERIAL EVIDE NCE TO PROVE ITS CLAIM OF INVESTMENTS MADE PRIOR TO THE FINANCIAL YEAR RELEVANT TO A.Y. UNDER CONSIDERATION . THE AR OF THE APPELLANT STATED ORALLY THAT HE IS UNABLE TO PRODUCE ANY EVIDENCE IN SUPPORT OF ITS CLAIM. THEREFORE, ALL THE GROUNDS OF APPEAL FILED B Y THE APPELLANT ARE REJECTED AS THEY DO NOT HAVE ANY CREDIBILITY. IN THE ABSENCE OF BASIC EVIDENCES 4 ITA NOS.372 & 373 /MDS/2015 FORTHCOMING FROM THE APPELLANT, I AM OF THE CONFIRMED VIEW THAT THE APPELLANT HAD MADE INVESTMENTS OF RS.200,82,00,000/- DURING THE FINANCIAL YEAR RELEVANT TO A.Y. UNDER CONSIDERATION . THEREFORE, I REJECT THE CLAIM OF THE APPELLANT THAT INVESTMENTS WERE MADE PRIOR TO THE FINANCIAL YEAR RELEVANT TO A.Y. UNDER CONSIDERATION. THE EVENTS STARTING RIGHT FROM THE ISSUANCE OF NOTICE U/S 148 TO THE PRESENT APPELLATE PROCEEDINGS PROVE CONCLUSIVELY THAT THE APPELLANT HAD NO SATISFACTORY EXPLANATION ABOUT THE NATURE OF SOURCE OF INVESTMENT OF RS.200,82,00,000/-. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, I FULLY AGREE WITH THE VIEW OF THE AO TO TAX AN AMOUNT OF RS.200,82,00,000/- UNDER THE HEAD UNEXPLAINED INVESTMENT U/S 69 OF THE IT ACT. 5. BEFORE US ALSO, THE LEARNED AUTHORIZED REPRESENT ATIVE COULD NOT FURNISH ANY MATERIALS TO EXPLAIN THE SOUR CE OF INVESTMENT OF THE ASSESSEE FOR RS.200,82,00,000/-. THEREFORE, WE DO NOT HAVE ANY OTHER OPTION BUT TO C ONFIRM THE ORDER OF THE REVENUE ON THIS ISSUE. ACCORDINGLY, WE HEREBY CONFIRM THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER WHICH WAS FURTHER SUSTAINED BY THE LEARNED COMMISSI ONER OF INCOME TAX (APPEALS). ITA NO.373/MDS/2015:- 6. SINCE THE ASSESSEE HAS NOT EXPLAINED THE SOURCE OF INVESTMENT OF RS.200,82,00,000/- BEFORE THE REVENUE , THE LEARNED ASSESSING OFFICER MADE ADDITION UNDER SECTI ON 69 OF 5 ITA NOS.372 & 373 /MDS/2015 THE ACT. SUBSEQUENTLY EVEN IN THE PENALTY PROCEEDI NGS, NO EXPLANATION WAS FURNISHED BEFORE THE REVENUE WITH A NY COGENT EVIDENCE TO EXPLAIN THE SOURCE OF INVESTMENT OF RS.200,82,00,000/- BY THE LEARNED AUTHORIZED REPRESENTATIVE. THEREFORE, THE LEARNED ASSESSING OF FICER LEVIED PENALTY FOR RS. ` 72,93,844/- BEING 100% OF TAX SOUGHT TO BE EVADED. BEFORE THE LEARNED COMMISSIONER OF I NCOME TAX (APPEALS) ALSO THE ASSESSEE HAS NOT COME OUT WI TH ANY EXPLANATION. THEREFORE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE PENALTY IN THE HANDS OF THE ASSESSEE BY OBSERVING AS UNDER:- IN THE COURSE OF APPELLATE PROCEEDINGS FILED AGAINST ORDER OF PENALTY BEFORE THE UNDERSIGNED, NUMEROUS OPPORTUNITIES WERE GIVEN BY THE UNDERSIGNED BY ISSUING NOTICES OF HEARING DATED 09.06.2014, 09.09.2014, 28.10.2014 FIXING HEARINGS ON 19.06.2014, 17.09.2014, 03.11.2014. NONE ATTENDED FOR HEARING, BUT ADJOURNMENT LETTERS WERE RECEIVED VIDE LETTER DATED 19.06.2014. THEREAFTER, FINAL OPPORTUNITIES OF HEARING NOTICES WERE ISSUED BY THE UNDERSIGNED ON 26.11.2014 & 01.01.2015 FIXING HEARINGS ON 15.12.2014 & 12.01.2015. IN THE COURSE OF FINAL HEARING DATED 12.01.2015, THE AR OF THE APPELLANT, SRI A.5.SRIRAMAN, ADVOCATE STATED THAT THE EXPLANATION FURNISHED BY THE APPELLANT IN THE COURSE OF PENALTY PROCEEDINGS BEFORE THE AD WAS BONAFIDE AND RELIED UPON THE RATIO OF THE APEX COUR T DECISION IN THE CASE OF RELIANCE PETRO PRODUCTS (P) LTD. 322 ITR 158. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE AR OF THE APPELLANT AND ALSO FINDINGS OF THE AD IN THE ORDER OF PENALTY DAT ED 6 ITA NOS.372 & 373 /MDS/2015 23.09.2013. I HAVE ALSO PERUSED THE ORDER OF CIT(A) - 15, CHENNAI IN ITA NO.1596/13-14/A-15, DATED 13.01.2015 CONFIRMING THE ADDITION OF RS.200,82,00,000/- MADE BY THE AD IN THE ASSESSMENT ORDER PASSED U/S 144/147/254 DATED 01.03.2013. THE FACTS OF THE ISSUE UNDER CONSIDERATION WAS THAT THE APPELLANT FAILED TO OFFE R SATISFACTORY EXPLANATION ABOUT THE SOURCE OF INVESTMENT OF RS.200,82,00,000/- MADE BY THE APPELLANT WITH VSNL DURING THE YEAR UNDER CONSIDERATION. INSPITE OF NUMEROUS OPPORTUNITIES GRANTED BY THE AO IN THE COURSE OF ASSESSMENT PROCEEDINGS AND ALSO BY THE UNDERSIGNED IN THE COURSE OF APPELLATE PROCEEDINGS IN ITA NO.1596/13- 14/A-15, DATED 13.01.2015, THE APPELLANT FAILED TO OFFER SATISFACTORY EXPLANATION ABOUT THE SOURCE OF INVESTMENT OF RS.200,82,00,000/- MADE DURING THE FINANCIAL YEAR RELEVANT TO THE A.Y. UNDER CONSIDERATION. THE CLAIMS OF THE APPELLANT THAT THE INVESTMENT PERTAINS TO THE FINANCIAL YEAR PRIOR TO THE FINANCIAL YEAR RELEVANT TO THE A.Y. 2005-06 WAS REJECTED BY THE UNDERSIGNED IN MY APPELLATE ORDER DATED 13.01.2015 AS THE APPELLANT WAS UNABLE TO FURNISH THE MATERIAL EVIDENCE IN SUPPORT OF ITS CLA IMS MADE. THE STAND OF THE AR OF THE APPELLANT THAT THE EXPLANATION MADE BY THE APPELLANT DURING THE COURSE OF PENALTY PROCEEDINGS BEFORE THE AO WAS BONAFIDE REQUIRES TO BE REJECTED, AS THE EXPLANATION IS DEVO ID OF MERITS. I FIND THAT THE EXPLANATION FURNISHED BY THE APPELLANT WAS NOT SUBSTANTIATED. NO MATERIAL EVIDENCE WAS EITHER FURNISHED BEFORE THE AO OR BEFORE THE UNDERSIGNED TO PROVE ITS CLAIM THAT THE SOURCE OF INVESTMENT PERTAINS TO DIFFERENT A.Y THAN THE A.Y. UNDER CONSIDERATION. INSPITE OF NUMEROUS OPPORTUNITIES GRANTED BY THE AO IN THE COURSE OF LEVY OF PENALTY PROCEEDINGS AND ALSO DURING THE PRESENT APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT COULD NOT FURNISH THE MATERIAL EVIDEN CE IN SUPPORT OF ITS CLAIM MADE REGARDING THE SOURCE O F INVESTMENT OF RS.200,82,00,000 /- WITH THE VSNL. THE EXPLANATION OFFERED BY THE APPELLANT WAS NOT SUBSTANTIATED. FURTHER, THE EXPLANATION FURNISHED B Y THE APPELLANT WAS NOT BONAFIDE. THE EXPLANATION FURNISHED BY THE APPELLANT HAS NO BASIS AND SAME WAS OFFERED TO ESCAPE FROM LEVY OF PENALTY U/S 271(1)(C) OF THE I.T. ACT. THE CASE OF THE ASSESSEE FALLS UNDER EXPLANATION 1 TO SEC.271(1)(C) OF THE I T ACT. THE RATIO OF THE DECISION RENDERED BY THE APEX 7 ITA NOS.372 & 373 /MDS/2015 COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. CITED BY THE AR OF THE APPELLANT IS NOT APPLICABLE TO THE FACTS OF THE CASE AND SAME IS DISTINGUISHABLE ON FACTS. ON THE OTHER HAND, THE RATIOS OF DECISIONS OF HON'BLE SUPREME COURT OF INDIA RENDERED IN THE CASE OF K.P MADHUSUDHAN VS CIT REPORTED IN 251 ITR 99 (SC), IN THE CASE OF CIT VS ATUL MOHAN BINDAL 317 ITR L(SC), IN THE CASE OF UNION OF INDIA VS DHARMENDRA TEXTILE PROCESSORS REPORTED IN 306 ITR 277(SC), IN THE CASE OF UNION OF INDIA VS RAJASTHAN SPINNING & MILLS REPORTED IN 180 TAXMAN 609(SC), OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF KAMAL BASHA VS CIT REPORTED IN 316 ITR 58, IN THE CASE OF THIRUPATHY KUMAR KHEMKA VS CIT REPORTED IN 163 TAXMAN 591, ARE SQUARELY APPLICABLE TO THE FACT S OF THE CASE FOR THE PURPOSE OF LEVY OF PENALTY. LOOKING INTO THE FACTS AND CIRCUMSTANCE OF THE CASE, I AM OF THE CONSIDERED VIEW THAT ALL THE GROUNDS OF APPEAL FILED BY THE APPELLANT ARE LIABLE FOR REJECTION AND SAME ARE REJECTED ACCORDINGLY. THEREFORE, IN VIEW OF THE ABOVE FACTS OF THE CASE A ND LEGAL POSITION, I AM FULLY CONVINCED WITH THE ACTIO N OF THE AO IN LEVYING PENALTY OF RS.72,93,844/- U/S 271(1)(C) OF THE I.T.ACT. 7. EVEN BEFORE US AT THIS STAGE, THE LEARNED AUTHOR IZED REPRESENTATIVE COULD NOT ADVANCE ANY ARGUMENTS FOR DELETING THE PENALTY LEVIED BY THE REVENUE. IN THESE CIRCUM STANCES, WE DO NOT HAVE ANY OTHER OPTION BUT TO CONFIRM THE PENALTY LEVIED BY THE REVENUE. ACCORDINGLY, WE HEREBY CONFI RM THE PENALTY LEVIED BY THE LEARNED ASSESSING OFFICER WHI CH WAS UPHELD BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 8 ITA NOS.372 & 373 /MDS/2015 8. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 4 TH MARCH, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 4 TH MARCH, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF