Sri MVB Gupta, Narasaraopeta V. The ITO, Ward-1, Narasaraopeta

ITA 534/VIZ/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 2824 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-09-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 03-12-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D S SUNDER SINGH
• Assessee Lawyers: WRITTEN SUBMISSIONS FILED
• Section: 133A

Judgement Text

ITA 534 OF 2009 MVB GUPTA OF NARASARAOPETA PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.534/VIZAG/2009 ASSESSMENT YEAR: 2005-06 MVB GUPTA, NARASARAOPETA VS. ITO WARD-1, NARASARAOPETA (APPELLANT) PAN NO: AFSPM 5849 Q (RESPONDENT) APPELLANT BY: WRITTEN SUBMISSIONS FILED RESPONDENT BY: SHRI D.S. SUNDER SINGH, (DR) ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 14-08- 2009 PASSED BY LEARNED CIT(A), GUNTUR AND IT RELATE S TO THE ASSESSMENT YEAR 2005-06. 2. THE PENALTY OF RS.1,15,000/- LEVIED BY THE ASSES SING OFFICER U/S 271(1)(C) OF THE ACT, HAVING BEEN CONFIRMED BY THE LEARNED CI T (A), THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE FILED HIS RETURN OF INCOME DECLARING A TOTAL INCOME OF RS.2,1 9,530/-, WHICH CONSISTED OF INCOME FROM HOUSE PROPERTY AND INCOME FROM BUSINESS . CONSEQUENT TO A SURVEY OPERATION CONDUCTED U/S 133A OF THE ACT, IT CAME TO THE NOTICE OF THE DEPARTMENT THAT THE ASSESSEE HAS UNDERSTATED THE RENTAL INCOME RECEIVED BY HIM, BESIDES HIDING THE INTEREST AND COMMISSION INCOME EARNED BY HIM. CONSEQUENT TO THE SURVEY, THE ASSESSEE FILED A REVISED STATEMENT OF T OTAL INCOME OFFERING THE COMMISSION INCOME OF RS.3.00 LAKHS; INTEREST INCOM E OF RS.5580/- AND DIFFERENTIAL RENTAL INCOME OF RS.59,530/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT AT RS.7,48,012/- BY ADDING THE ITEMS OF INCOME STATED ABOVE. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS AND LEVIED A PENALTY OF RS.1,15,000/-. THE SAME WAS CONFIRMED BY THE LEARNED CIT (A). AGGRIEVED, THE A SSESSEE IS IN APPEAL BEFORE US. ITA 534 OF 2009 MVB GUPTA OF NARASARAOPETA PAGE 2 OF 3 4. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENT ATIVE AND ALSO PERUSED THE RECORD AND THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE. IN OUR VIEW, THE LEARNED CIT (A) HAS ANALYSED THE ISSUE IN PROPER PE RSPECTIVE. WE EXTRACT BELOW THE RELEVANT OBSERVATIONS MADE BY LEARNED CIT (A): 7. I HAVE CONSIDERED THE FACTS OF THIS CASE. IN TH IS CASE, THERE WAS A CLEAR CASE OF CONCEALMENT BOTH ON ACCOUNT OF SHOR T DECLARATION OF RENTAL INCOME AS WELL AS NON DECLARATION OF COMMISS ION EARNED BY THE APPELLANT. THESE CAME TO LIGHT ONLY AS A RESULT OF THE SURVEY CONDUCTED ON THE APPELLANTS PREMISES WHEN DOCUMENT S INDICATING SUCH CONCEALMENT, NAMELY, LEASE DEED AND PROMISSORY NOTES WERE FOUND. AFTER IT WAS ESTABLISHED THAT THESE AMOUNTS WERE NOT REFLECTED IN THE BOOKS OF THE APPELLANT OR OFFERED AS INCOME, THE APPELLANT WAS LEFT WITH NO CHOICE BUT TO OFFER IT A S INCOME. THE HYDERABAD BENCH OF THE ITAT HAS CONSIDERED IN THE C ASE OF M K REDDY AND OTHERS VS. ITO 11(2), HYDERABAD (ITA NO.522/523/HYD/07 FOR THE A.YS 2003-04 & 2004-05, T HE LEVIABILITY OF PENALTY UNDER SECTION 271(I) (C) WHERE THE APPEL LANT HAS DECLARED TO BUY PEACE. IN THAT CASE, THE ITAT REL IED ON THE DECISION OF THE SUPREME COURT IN THE CASE OF K P MA DHUSUDAN VS. CIT (251 ITR 99) AND ALSO STATED, IN THE CASE BEFO RE THE APEX COURT, THE ASSESSEE MADE A SIMILAR CONTENTION THAT THE ASSESSEE AGREED FOR THE ADDITION TO BUY PEACE AND, THEREFORE , THE AMOUNT THAT WAS AGREED TO BE ADDED DID NOT FORM PART OF CO NCEALED INCOME. THE APEX COURT, WHILE CONSIDERING THIS CONT ENTION, FOUND THAT IN VIEW OF EXPLANATION TO SEC.271, A PENALTY C AN BE LEVIED. AFTER REFERRING TO THE EARLIER JUDGMENT OF THE APEX COURT IN THE CASE OF SIR SHADILAL SUGAR AND GENERAL MILLS LTD., V. CI T (1987) 168 ITR 705, THE APEX COURT OBSERVED THAT IN VIEW OF THE EX PLANATION TO SEC. 271, THE VIEW TAKEN BY THE APEX COURT IN THE C ASE OF SIR SHADILAL SUGAR AND GENERAL MILLS LTD., (SUPRA) CAN NO LONGER BE SAID TO BE APPLICABLE. THE APEX COURT IN THE CASE OF SIR SHADILAL SUGAR AND GENERAL MILLS LTD., HAD TAKEN A SIMILAR VIEW AS THAT TAKEN IN THE CASE OF SURESH CHANDRA MITTAL (SUPRA). THEREFORE, I N VIEW OF EXPLANATION TO SEC. 271, EVEN IN RESPECT OF AN ADDI TION MADE ON THE BASIS OF AGREEMENT WITH AN INTENTION TO PURCHAS E PEACE, PENALTY CAN BE LEVIED. THEREFORE, WE DO NOT FIND AN Y MERIT IN THE CONTENTION OF THE ASSESSEE. 8. AS STATED EARLIER, IT WAS ONLY AFTER THE SURVEY THAT THE APPELLANT CAME FORWARD TO REVISE THE STATEMENT OF INCOME BY O FFERING ADDITIONAL INCOME. THE MATERIALS FOUND DURING THE S URVEY POINTED CLEARLY TOWARD SPECIFIC AREAS WHERE THE INCOME HAD NOT BEEN DECLARED AT ALL OR HAD NOT BEEN FULLY DECLARED. THE INCOME THAT WAS SUBSEQUENTLY OFFERED TO TAX IS ONLY ON ACCOUNT OF I T BEING UNEARTHED IN THE SURVEY, AND WAS NOT A VOLUNTARY ACT ON THE P ART OF THE APPELLANT. IN ANY CASE, EVEN WHERE ADDITIONAL INCOM E WAS DECLARED TO BUY PEACE THE SUPREME COURT HAS HELD THAT PENA LTY UNDER SECTION 271(1) (C) OF THE ACT IS ATTRACTED. THIS DE CISION HAS ALSO BEEN FOLLOWED BY THE ITAT IN THE DECISION CITED SUP RA. FOLLOWING THIS DECISION, I HOLD THAT THE LEVY OF PENALTY UNDE R SECTION 271(1)(C) IS IN ORDER. THE PENALTY OF RS.1,15,000/- LEVIED BY THE ASSESSING OFFICER IS CONFIRMED AND THE APPELLANTS APPEAL IS DISMISSED. ITA 534 OF 2009 MVB GUPTA OF NARASARAOPETA PAGE 3 OF 3 5. IN THE WRITTEN SUBMISSION FILED, THE ASSESSEE HA S PLACED RELIANCE ON THE FOLLOWING CASE LAW: A) CIT VS. SURESH CHANDRA MITTAL (241 ITR 124) (S C ) B) V V PROJECTS & INVESTMENTS P LTD., VS. DCIT (300 ITR 40) (AP) C) A V R PRASAD VS. ITO (97 ITD 325) (HYD) WE HAVE GONE THROUGH THE ABOVE SAID CASE LAW AND IN OUR VIEW THE DECISIONS RENDERED IN THE CASE LAW DO NOT APPLY TO THE FACTS OF THE CASE. IN THE PRESENT CASE, THE ASSESSEE HAS FILED ONLY A STATEMENT OF IN COME AFTER THE SURVEY. HENCE, IN OUR VIEW THE LEARNED CIT (A) HAS CONSIDERED THE FACTS OF THE CASE IN A PROPER PERSPECTIVE AND HAS RENDERED HIS DECISION IN ACCORD ANCE WITH THE LAW. ACCORDINGLY WE UPHOLD THE ORDER OF THE CIT (A). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON 24 TH SEPTEMBER, 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE: 24-09-2010 COPY TO 1 SHRI M.V.B. GUPTA, 6 - 3 - 269, SATTENAPALLI, NARASARAOPET 2 THE ITO WARD - 1, NARASARAOPET 3 4. THE CIT GUNTUR THE CIT(A), GUNTUR 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM