Smt. Kiran Agarwal, Lucknow V. ACIT, Lucknow

ITA 471/LKW/2010

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6092 (ITAT-LUCKNOW)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-09-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 05-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SHEFALI SWARUP
• Assessee Lawyers: M L AGRAWAL
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A-BENCH, LUCKNOW. BEFORE SHRI H.L.KARWA, HONE VICIE PRESIDENT AND SHRI B.R.KAUSHIK, ACCOUNTANT MEMBER I.T.A.NO.471(LUC.)/2010 A.Y. : 2005-06 SMT.KIRAN AGRAWAL, VS. THE ACIT, RANGE IV, 13, SARIA MILL, TILAK NAGAR, LUCKNOW. LUCKNOW. PAN ABMPA 2573M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.L.AGRAWAL, ADVOCATE RESPONDENT BY : MRS. SHEFALI SWARUP, D.R. O R D E R PER B.R.KAUSHIK, A.M. IN THIS APPEAL, THE ASSESSEE HAS OBJECTED TO THE O RDER OF THE CIT(A)-II, LUCKNOW DATED 31.5.2010. THE LD.CIT(A), AS PER THE IMPUGNED ORDER, HAD PARTLY CONFIRMED THE PENALTY LEVIED BY THE AO AS PE R HER ORDER UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT,1961 DATED 27.6.200 8. 2. DURING THE COURSE OF HEARING BEFORE US, THE LD. COUNSEL SUBMITTED THAT THE ADDITION IN QUESTION WAS MADE ON ESTIMATE BASI S, WHICH WAS ACCEPTED BY THE ASSESSEE BECAUSE OF THE LOW TAX EFFECT AND IN ORDER TO BUY PEACE OF MIND. IT IS SEEN FROM THE ASSESSMENT ORDER THAT THE ASSES SEE HAD DECLARED AGRICULTURAL INCOME AT RS.75,000. THE AO, ON ESTIMA TE BASIS, DISALLOWED 50% OF THE CLAIM OF THE ASSESSEE AND MADE AN ADDIT ION OF RS.37,500. THE AO FURTHER OBSERVED THAT THE ASSESSEE HAS NOT SHOWN THE INCOME FROM THE 2 PROPERTY AT NADAN MAHAL ROAD ON THE PLEA THAT IT IS IN RUIN CONDITION AND VACANT DURING WHOLE OF THE YEAR, BUT THE ASSESSEE H AS NOT FURNISHED ANY EVIDENCE IN THIS REGARD. THEREFORE, THE AO ALSO AD DED THE ANNUAL LETTING VALUE OF THIS PROPERTY AT RS.24,000 TO THE INCOME O F THE ASSESSEE. THE AO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)( C) OF THE ACT AND ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY THE PEN ALTY UNDER SECTION 271(1)(C) MAY NOT BE IMPOSED. THE ASSESSEE FILED WR ITTEN REPLY STATING THAT THE ADDITIONS DID NOT TANTAMOUNT TO CONCEALMENT OF INCOME. HOWEVER, AFTER CONSIDERING THE ASSESSEES REPLY, THE AO HELD THAT THE CONCEALMENT PENALTY WAS ATTRACTED REGARDING THE ADDITION OF RS.24,000 R EPRESENTING THE ANNUAL LETTING VALUE OF PROPERTY AT NADAN MAHAL ROAD AND REGARDING THE ADDITION OF RS.37,500 MADE AS INCOME FROM OTHER SOURCES BY WAY OF DISALLOWANCE OF 50% OF AGRICULTURAL INCOME SHOWN AT RS.75,000 BE CAUSE THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE OF AGRICULTURAL ACT IVITIES. THEREFORE, THE AO WAS OF THE VIEW THAT THE ASSESSEE WAS LIABLE FOR P ENALTY U/S 271(1)(C) OF THE ACT AND IMPOSED A PENALTY OF RS.18,000. ON APPEAL, THE LD.CIT(A) HELD THAT THE CONCEALMENT PENALTY WAS NOT ATTRACTED AS REGAR DS THE ESTIMATED NOTIONAL INCOME FROM PROPERTY AT NADAN MAHAL, WHICH WAS STA TED TO BE IN RUIN CONDITION AND VACANT DURING THE RELEVANT YEAR. THE LD.CIT(A) FURTHER HELD THAT THE ADDITION WAS ESTIMATED ONE AND NOTIONA L AND NO MATERIAL WAS BROUGHT BY AO ON RECORD TO SUGGEST THAT THE ASSES SEE ACTUALLY RECEIVED ANY INCOME FROM THE SAID PROPERTY, WHICH WAS NOT DISCLO SED TO THE DEPARTMENT. THE LD.CIT(A),THEREFORE, DIRECTED THE AO NOT TO LEV Y PENALTY REGARDING THIS ADDITION. HOWEVER, THE LD.CIT(A) SUSTAINED THE PENA LTY WITH REFERENCE TO THE ADDITION OF RS.37,500 REPRESENTING INCOME FROM OTH ER SOURCES AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 3 3. THE LD.D.R. RELIED ON THE ORDER OF THE LD.CIT(A) . 4. ON A CAREFUL CONSIDERATION OF FACTS, MATERIAL PL ACED ON RECORD AND RIVAL SUBMISSIONS, WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION WAS MADE BY THE AO ONLY ON ESTIMATE BASIS. THE LD.COUNSEL H AS CLAIMED THAT THE ASSESSEE OWNED 15 BIGHAS OF LAND AND SIMILAR CLAIM OF AGRICULTURAL INCOME IN EARLIER YEARS AND SUBSEQUENT YEAR HAD BEEN ACCEPTED BY THE DEPARTMENT. IT IS SEEN FROM THE CHART FILED THAT IN ASSESSMENT YEAR 2 006-07, A CLAIM OF RS.60,000 ON AGRICULTURAL INCOME HAS ALSO BEEN ACCE PTED BY THE DEPARTMENT. THE ADDITION BY THE AO IS ONLY FOR THE REASON THAT THE ASSESSEE HAD FAILED TO GIVE ANY DETAILS IN SUPPORT OF HIS CLAIM OF AGRICUL TURAL INCOME MADE BY HIM, BUT SHE HAS FAILED TO GIVE ANY EVIDENCE EITHER IN THE ASSESSMENT ORDER OR IN THE PENALTY ORDER TO PROVE THAT THE ACTION OF THE A SSESSEE WAS SUCH AS TO PROVE THAT THE ASSESSEE HAD KNOWINGLY FILED INACCUR ATE PARTICULARS OF INCOME OR CONCEALED THE PARTICULARS OF INCOME. THE PENALTY UNDER SECTION 271(1)(C) CONFIRMED BY THE LD.CIT(A) ON THE ADDITION OF RS.37 ,500 ON ACCOUNT OF REJECTION OF CLAIM OF THE AGRICULTURAL INCOME OF T HE ASSESSEE CANNOT BE SUSTAINED BECAUSE THE CLAIM OF THE ASSESSEE WAS RE JECTED PARTLY ON ESTIMATE BASIS DESPITE THE FACT THAT SIMILAR CLAIM OF THE A SSESSEE IN EARLIER YEARS AND IN SUBSEQUENT ASSESSMENT YEAR 2006-07 HAD BEEN ACCE PTED. THE ORDER OF THE LD.CIT(A) IS, THEREFORE, VACATED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.9.2010. SD. SD. (H.L.KARWA) (B.R.KAUSHIK) VICE PRESIDENT ACCOUNTANT MEMBER SEPTEMBER 15TH ,2010. 4 COPY TO THE : 1. APPELLANT 2. RESPONDENT 3. CIT(A) (4) CIT 5.DR. A.R.,ITAT, LUCKNOW. SRIVASTAVA.