V.Raman, CHENNAI V. ITO, CHENNAI

ITA 390/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8210 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-01-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 23-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A B KOLI IRS
• Assessee Lawyers: S SUBRAMANIAN
• Keywords: Agreed addition

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , ! . ! ' # , $#% BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO.390/MDS/2015. $ & !'& / ASSESSMENT YEAR : 2010-2011 SHRI. V. RAMAN, NO.31/2, THIRD CROSS STREET, MANDAVELIPAKKAM, CHENNAI 600 028. VS. THE INCOME TAX OFFICER, INTERNATIONAL TAXATION II, CHENNAI. [PAN AUIPR 4717R ] ( / APPELLANT) ( /RESPONDENT) () * + / APPELLANT BY : SHRI. S. SUBRAMANIAN, C.A. ,-() * + /RESPONDENT BY : SHRI. A.B. KOLI, IRS, JCIT. ' ! * . / DATE OF HEARING : 12-01-2016 /0' * . / DATE OF PRONOUNCEMENT : 20-01-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-16, CHE NNAI IN ITA NO.45-CIT(A)-16/2013-14, DT.28.01.2015 FOR THE ASSE SSMENT YEAR 2010-2011 PASSED U/S.271(1)(C) AND 250 OF THE INCOM E TAX ACT, 1961. ITA NO. 390/MDS/2015 :- 2 -: 2. THE ASSESSEE HAS RAISED THE GROUNDS AGAINST LEVY OF PENALTY BY THE ASSESSING OFFICER WERE THE ASSESSEE HAS VOLUNTARILY ACCEPTED THE ADDITION. 3. THE BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS A NON RESIDENT INDIAN WORKING IN DUBAI FOR THE LAST 22 YE ARS AND FILED RETURN OF INCOME DISCLOSING INCOME FROM HOUSE PROPERTY ON 30.08.2010 ADMITTING TOTAL INCOME OF :3,14,700/-. SUBSEQUENTLY , AS PER THE SCRUTINY NORMS THE CASE WAS SELECTED, AND NOTICE U/ S.143(2) OF THE ACT WAS ISSUED. IN COMPLIANCE TO THE NOTICES A QUESTIO NNAIRE WAS ISSUED BY THE DEPARTMENT. THE ASSESSEE AUTHORISED REPRESE NTATIVE FILED EXPLANATIONS IN THE ASSESSMENT PROCEEDINGS AND APPE ARED FROM TIME TO TIME AND FILED REQUIRED DETAILS. THE LD. ASSESSI NG OFFICER FOUND THAT THE ASSESSEE HAS MADE A CASH DEPOSITS IN ICICI AND HDFC BANKS. IN RESPONSE TO THE CASH DEPOSITS, THE LD. AUTHORISED R EPRESENTATIVE FILED LETTER DATED 12.02.2013 EXPLAINING THAT THE ASSESSE ES WIFE HAS SOLD LAND AT COIMBATORE AND BANK ACCOUNT BEING A JOINT A CCOUNT, THE TOTAL CONSIDERATION RECEIVED :60,00,000/-, INCLUDES :25, 00,000/- BY CHEQUE AND :35,00,000/- IN CASH AND WAS DEPOSITED IN BANK ACCOUNTS. BUT ON VERIFICATION, THE ASSESSING OFFICER IS SATISFIED TH AT OUT OF :70,00,000/- DEPOSITS THE ASSESSEE COULD EXPLAIN ONLY :60,00,000 /- AND TREATED THE DIFFERENCE AS UNDISCLOSED INCOME. FURTHER, IN RESP ONSE TO THE DISPUTED ITA NO. 390/MDS/2015 :- 3 -: AMOUNT, THE ASSESEES AUTHORISED REPRESENTATIVE EXP LAINED THAT :10,00,000/- DEPOSITED AMOUNT RELATED TO REFUND OF ADVANCE FOR PURCHASE OF LAND AND DUE TO SHORT VISIT TO INDIA, T HE ASSESSEE WAS NOT IN A POSITION TO TRACE THE SOURCE. HENCE, TO BUY P EACE WITH THE DEPARTMENT THE ASSESSEE VOLUNTARY ACCEPTED THE ADDI TION OF :10,00,000/- TO THE RETURNED INCOME AND PAID THE TA XES INCLUDING INTEREST :3,24,652/-. AFTER COMPLETION OF THE ASSE SSMENT PROCEEDING, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS , AND ISSUED NOTICES. IN COMPLIANCE TO THE NOTICES, THE LD.AR APPEARED AN D REITERATED THE SUBMISSIONS MADE IN THE ASSESSMENT PROCEEDINGS THAT DUE TO LACK OF TIME AND THE REFUND OF MONEY PERTAINS TO EARLIER PE RIOD WHICH COULD NOT BE TRACED IMMEDIATELY AND ASSESSEE HAS ACCEPTED THE ADDITION. THE LD. AUTHORISED REPRESENTATIVE RELIED ON THE HIG H COURT DECISIONS AND TRIBUNAL DECISIONS AND THE MAIN ISSUE BEING THA T THE ASSESSEE HAS VOLUNTARILY SURRENDERED THE INCOME TO BUY PEACE AND PAID TAXES IN COMPLIANCE OF LAW AND THERE IS NO WANTON ACT OR CON SCIOUS CONCEALMENT FOR LEVY OF PENALTY, FURTHER RELIED ON THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL 251 ITR 9 WERE IT WAS HELD AS PER EXPLANATIONS THERE MUST B E SOME MATERIALS OR CIRCUMSTANCES LEADING TO REASONABLE CO NCLUSION THAT AMOUNT DOES NOT REPRESENTS A CONCEALMENT OF INCOME. THE ASSESSEE HAS VOLUNTARILY ACCEPTED THE ADDITION AND CO-OPERAT ED IN THE ITA NO. 390/MDS/2015 :- 4 -: ASSESSMENT PROCEEDINGS AND PAID THE TAXES BEFORE CO MPLETION OF ASSESSMENT. THE MAIN CONTENTION OF THE ASSESSEE BE ING TO BUY PEACE WITH THE DEPARTMENT AND HAS ACCEPTED THE ADDITION AND PAID TAXES AND ALSO NOT FILED APPEAL AGAINST THE ASSESSMENT OR DER. BUT THE ASSESSING OFFICER ON VERIFICATION OF THE WITHDRAWAL IN BANK ACCOUNT SUSPECTED THE AMOUNT AS UNDISCLOSED INCOME, INSPITE OF ASSESSEE FILED REVISED STATEMENT OF INCOME AND PAID THE TAXES; THE LD. ASSESSING OFFICER HOWEVER LEVIED PENALTY OF :2,33,060/- BY OV ERLOOKING THE SUBMISSIONS. AGGRIEVED BY THE ORDER OF THE ASSESSI NG OFFICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONE R OF INCOME TAX (APPEALS). 4. IN THE APPELLATE PROCEEDINGS, THE LD. AUTHORISED REPRESENTATIVE REITERATED HIS SUBMISSIONS MADE BEFO RE THE LOWER AUTHORITIES. THE LD. AUTHORISED REPRESENTATIVE MAD E SUBMISSIONS ON THE GROUNDS THAT THE VOLUNTARILY SURRENDER OF INCOM E TO BUY PEACE WITH DEPARTMENT AND PAYMENT OF TAXES IS NOT A CONSCIOUS CONCEALMENT AND NO PENALTY IS LEVIABLE AND RELIED ON JUDICIAL DECIS IONS. BUT THE COMMISSIONER OF INCOME TAX (APPEALS) RELIED ON THE FINDINGS OF THE ASSESSING OFFICER ON THE DISPUTED ISSUE AND WAS OF THE OPINION THAT UNLESS THERE WAS A SCRUTINY, SAID AMOUNT WOULD HAVE ESCAPED FROM DEPARTMENT PURVIEW AND RELIED ON THE JUDICIAL DECIS IONS AGAINST THE ASSESSEE AND CONFIRMED THE PENALTY LEVIED BY THE AS SESSING OFFICER. ITA NO. 390/MDS/2015 :- 5 -: AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TA X (APPEALS) , THE ASSESSEE ASSAILED AN APPEAL BEFORE THE TRIBUNAL. 5. BEFORE THE TRIBUNAL, THE ASSESSEE HAS RAISED THE GR OUNDS THAT THERE WAS NO WILLFUL CONCEALMENT OF INCOME AND AGREED TO OFFER INCOME DUE TO EMPLOYMENT AT FOREIGN COUNTRY AND LA CK OF TIME AND FURTHER WAS NOT IN A POSITION TO TRACE THE DOCUMENT ARY EVIDENCE TOWARDS SOURCE OF CASH DEPOSITS TO THE EXTENT OF :1 0,00,000/- AND ALSO TO SHOWED THE BONAFIDES BY PAYING TAX OF :3,24,652 /- INCLUDING INTEREST BEFORE COMPLETION OF ASSESSMENT. THE LD. AUTHORISED REPRESENTATIVE DEMONSTRATED AND MADE REFERENCE TO T HE PAPER BOOK CONTAINING THE BANK STATEMENTS, CORRESPONDENCES AN D TAX PAYMENTS DETAILS OF THE ASSESSEE ALONGWITH JUDICIAL DECISION S OF TRIBUNAL ON THE CANCELLATION OF PENALTY. THE ASSESSEE IN ORDER TO B UY PEACE WITH DEPARTMENT HAS COME FORWARD VOLUNTARILY TO OFFER IN COME FOR TAXATION AND THERE IS NO CONSCIOUS CONCEALMENT ON THE PART O F THE ASSESSEE. CONSIDERING THE GENUINE CIRCUMSTANCES, THE LD. AUTH ORISED REPRESENTATIVE PLEADED FOR DELETION OF PENALTY. 6. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTAT IVE RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND OBJECTED TO THE SUBMISSIONS OF THE LD. AUTHORISED REPRESENTATIVE. ITA NO. 390/MDS/2015 :- 6 -: 7. WE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES, PERUSED THE MATERIAL ON RECORD AND ALSO JUDICIAL DECISIONS CITED. THE ASSESSEE BEING A NRI AND REGULARLY FILING INCOME TAX RETURN IN NON RESIDENT STATUS AND DUE TO AIR INFORMATION THE CASE WAS SELE CTED FOR SCRUTINY. IN ASSESSMENT PROCEEDINGS, THE LD. AUTHORISED REPRE SENTATIVE EXPLAINED THAT THE AMOUNT DEPOSITED IN BANKS PERTAI NS TO SALE PROCEEDS OF LAND SOLD BY ASSESSEE WIFE AND WAS DEPO SITED IN JOINT ACCOUNT. THE ASSESSING OFFICER HAVING SATISFIED WI TH THE SOURCE OF CASH DEPOSIT TO THE EXTENT OF :35,00,000/- BUT FOR ADDITIONAL :10,00,000/- CASH DEPOSIT ISSUED SHOW CAUSE NOTICE AND LD. AUTHORISED REPRESENTATIVE EXPLAINED THAT AMOUNT PE RTAINS TO REFUND OF ADVANCE MADE FOR PURCHASE OF PROPERTY. THE ASSES SEE BEING A NRI AND IN EMPLOYMENT AT DUBAI FOR MORETHAN 20 YEARS DU E TO HIS SHORT VISIT TO INDIA COULD NOT SUBMIT ANY DOCUMENTARY EVI DENCE, BUT TO BUY PEACE WITH THE DEPARTMENT CO-OPERATED IN ASSESSMENT PROCEEDINGS AND PAID THE TAXES BEFORE COMPLETION OF ASSESSMENT ON THE AGREED ADDITION. THE COMMISSIONER OF INCOME TAX (APPEALS) CONCURRED WITH THE FINDINGS OF THE ASSESSING OFFICER WITHOUT CONSI DERING THE FACTS THAT THERE IS NO CONSCIOUS SUPPRESSION ON THE PART OF T HE ASSESSEE CONSIDERING THE FACTS AND CIRCUMSTANCES, THE PENALT Y PROCEEDINGS AND ASSESSMENT PROCEEDINGS ARE TWO SEPARATE LIMBS. WE R ELY ON THE PRINCIPLES LAID DOWN IN THE CASE OF CIT VS. MANJUNATHA COTTON & ITA NO. 390/MDS/2015 :- 7 -: GINNING FACTORY 359 ITR 565 (KAR) WHERE THE LORDSHIP HAVE HELD THAT THE PENALTY PROCEEDINGS ARE DISTINCT AND NOT AUTOMA TIC. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENAL TY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.390/MDS/2015 IS ALLOWED. ORDER PRONOUNCED ON WEDNESDAY, THE 20TH DAY OF JA NUARY, 2016 AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! ' # ) (G. PAVAN KUMAR) /JUDICIAL MEMBER / CHENNAI 1 / DATED: 20.01.2016. KV 2 * ,$.34 54'. / COPY TO: 1 . () / APPELLANT 3. ' 6. () / CIT(A) 5. 4!9: ,$.$ / DR 2. ,-() / RESPONDENT 4. ' 6. / CIT 6. :;& < / GF