S.V.Murugesan, CHENNAI V. ITO, CHENNAI

ITA 507/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9312 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 07-03-2016
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN JCITD R
• Assessee Lawyers: G BASKAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI , . !' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.507/MDS./2016 / ASSESSMENT YEAR : 2007-08 MR.S.V.MURUGESAN, PROP.GANESH STORES, 72,THIRUVALLUVAR SALAI, ALWARPET, CHENNAI 600 018. VS. THE INCOME-TAX OFFICER, NON-CORPORATE WARD-3(4), CHENNAI. [PAN AJFPM 0804 J ] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : MR.G.BASKAR,ADVOCATE /RESPONDENT BY : MR.P.RADHA KRISHNAN,JCIT,D.R / DATE OF HEARING : 10 - 05 - 201 6 !' / DATE OF PRONOUNCEMENT : 12 - 05 - 2016 ' / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-4, CHENNAI DATED 31.12.2015 PERTAINING TO ASSESSMENT YEAR2007-08. ITA NO.507/MDS./2016 :- 2 -: 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS F OR ADJUDICATION. 1. THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APP EALS) CONFIRMING THE LEVY OF PENALTY WHICH IS WRONG, ILLEGAL AND OPPOSED TO FACTS. 2. THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED I N PASSING THE IMPUGNED ORDER WITHOUT CONSIDERING THE SUBMISSIONS MADE BEFORE HIM BOTH ORAL AND WRITTEN. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS) WENT WR ONG IN PROCEEDINGS TO DISPOSE OF THE APPEAL ON THE BASIS OF WRONG AND INCOMPLETE FACTS RECORDED BY THE ASSESSING OFFICER BOTH IN THE ASSES SMENT ORDER AND THE PENALTY ORDER. 4. THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED I N RELYING ON CERTAIN DECISIONS WHICH ORE NOT APPLICABLE TO THE FACTS OF THE CASE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL, FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2007 -08 ON 14.11.2007 ADMITTING TOTAL INCOME OF ` 6,90,155/-. SUBSEQUENTLY, THE AO COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT ON 3 0.12.2009 BY ASSESSING A TOTAL INCOME OF ` 14,96,360/-. THE MAIN ADDITIONS WERE ON ACCOUNT OF FRESH CAPITAL OF ` 7,50,000/- INTRODUCED BY WAY OF CASH WHICH HAD NOT BEEN RETURNED FOR THE PURPOSE OF TOTA L INCOME AND THE COMPOUNDING FEE OF ` 56,200/- PAID BY THE ASSESSEE FOR THE PURCHASE OF PROPERTY, WHICH HAD NOT BEEN ACCOUNTED FOR. 3.1 THERE WAS A SURVEY AT THE PREMISES OF M/S.GANE SH STORES, PROPRIETARY CONCERN OF THE ASSESSEE, ON 22.02.2007. DURING THE COURSE OF SURVEY, INVENTORY OF STOCK AND OTHER INVE STMENTS WERE TAKEN. ON PERUSAL OF THE INVESTMENTS MADE BY THE ASSESSEE, IT WAS NOTICED THAT THERE WAS AN INVESTMENT OF ` 59,33,360/- IN PROPERTY AT OLD ITA NO.507/MDS./2016 :- 3 -: NO.111 & 112 , NEW NO.52,ACHARAPPAN STREET, CHENNAI -1. DURING THE COURSE OF SURVEY, THE ASSESSEE HAD STATED IN HIS SW ORN STATEMENT THAT HE HAD AVAILED A LOAN FOR ` 40 LAKHS FROM CITI BANK AND THE REMAINING WAS MET FROM HIS SAVINGS AND DRAWING. HOWEVER, AS T HERE WERE NO DRAWINGS TO THIS EFFECT IN HIS STATEMENT OF ACCOUNT , THE ASSESSEE AGREED TO DISCLOSE THE CASH OF ` 7,50,000/- ON THIS ACCOUNT. THE SAME WAS CONSIDERED IN THE ASSESSMENT ORDER FOR ADDITION BY THE AO. HOWEVER, THE ASSESSEE DID NOT FILE THE RETURN OF IN COME IN ACCORDANCE WITH THE DISCLOSURE MADE BY HIM DURING THE COURSE O F SURVEY PROCEEDINGS OR THE FINDINGS THERETO. THE ASSESSEE HAD EFFECTIVELY RETRACTED FROM THE ADMISSIONS MADE BY HIM AT THE TI ME OF SURVEY. BUT AS THE ASSESSMENT PROCEEDINGS PROGRESSED THE ASSESS EE FILED A LETTER DATED 29.12.2009 WHEREIN HE AGREED TO THE ADDITION OF THE ABOVE TWO AMOUNTS OF ` 7,50,000/- AND ` 56,200/- TOTALING TO ` 8,06,200/- FOR TAX PURPOSES. THE ASSESSEE ALSO REQUESTED THAT AS THE O FFER WAS MADE VOLUNTARILY, THE PENAL PROCEEDINGS MAY BE WAIVED OF F. 3.2 HOWEVER, THE AO INITIATED THE PENALTY PROCEEDIN GS U/S.271(1)(C) OF THE ACT. IN RESPONSE, THE ASSESSEE FILED A REPLY VIDE LETTER DATED 18.01.2010 THAT HE HAD VOLUNTARILY AGREED FOR THE A DDITION FOR ` 8,06,200/-, THEREFORE,, PLEADED THAT THE PENAL PROC EEDINGS CONTEMPLATED MAY BE DROPPED. CONSIDERING THE SUBMIS SIONS, THE AO OBSERVED THAT IN THIS CASE THE ENTIRE DISCLOSURE OR ADDITIONS HAVE ARISEN ITA NO.507/MDS./2016 :- 4 -: OUT OF A PRIMARY ACT VIZ. THE SURVEY AND THERE WAS NO ELEMENT OF ANY VOLUNTARILY SURRENDER ON THE PART OF THE ASSESSEE. THE AO CONTENDED THAT DESPITE THE SURVEY FINDINGS AND THE SWORN STAT EMENT BY THE ASSESSEE, THE ASSESSEE HAS NOT CONSIDERED THE ESCAP ED INCOME FOR FINALIZING HIS TOTAL INCOME. THE SAME HAS BEEN OFFE RED ONLY TOWARDS THE FAG END OF THE ASSESSMENT PROCEEDINGS. THEREFOR E, IT WAS HELD THAT THE ASSESSEE HAD FAILED TO DISCHARGE THE ONUS BY FI LING A TRUE ACCOUNT OF HIS AFFAIRS OF BUSINESS AND THE ACTUAL INCOME DE RIVED FROM HIS BUSINESS. HENCE, KEEPING IN VIEW OF THE FACTS OF T HE CASE, THE AO IMPOSED THE PENALTY OF ` 2,89,091/- U/S.271(1)(C) OF THE ACT WHICH IS 100% OF THE TAX SOUGHT TO BE EVADED. AGGRIEVED BY T HE ORDER OF AO, THE ASSESSEE CARRIED THE APPEAL BEFORE LD.CIT(A). 4. ON APPEAL, THE LD.CIT(A) HAS NOT CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE HIM AT THE TIME OF ADJU DICATION. IT IS ALSO BROUGHT TO OUR NOTICE THAT THE ADDITION IN THE ASSE SSMENT IS ONLY BASED ON CONFESSION OR OFFERED MADE BY THE ASSESSEE AND I T IS NOT BASED ON ANY POSITIVE MATERIAL FOUND DURING THE COURSE OF SU RVEY. THE ASSESSEE HAS GIVEN EXPLANATION WITH SUPPORTING DETAILS BEFOR E THE AO AS WELL AS THE CIT(A), WHICH IS NOT AT ALL COMMENTED BY THEM. HENCE, THE ORDER PASSED BY THE CIT(A) WITHOUT CONSIDERING THE SUBMIS SIONS FILED BEFORE HIM IS NOT APPROPRIATE. ACCORDINGLY, WE REMIT THE ENTIRE ISSUE TO THE ITA NO.507/MDS./2016 :- 5 -: FILE OF CIT(A) TO PASS A SPEAKING ORDER AFTER CONSI DERING THE SUBMISSIONS OF THE ASSESSEE IN ITS ENTIRETY AND IN ACCORDANCE WITH LAW. THE APPEAL OF ASSESSEE IS REMITTED BACK TO THE FILE OF LD.CIT(A) WITH FRESH CONSIDERATION. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH MAY, 2016, AT CHENNAI. SD/ - SD/ - ( . ) ( G.PAVAN KUMAR ) / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 12 TH MAY, 2016 K S SUNDARAM &'(()*( +* / COPY TO: ( 1 . / APPELLANT 4. ( , / CIT 2. / RESPONDENT 5. *-. (/ / DR 3. ( ,(0 1 / CIT(A) 6. .2(3 / GF