S.Kiruthigan Lokesh, Namakkal V. ITO, Namakkal

ITA 578/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6378 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-08-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 07-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NETHRA PAL
• Assessee Lawyers: S SRINIRANJINI
• Section: 131

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI , ! ' ! # . $% & '( BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.578/MDS./2017 / ASSESSMENT YEAR : 2011-12 MR.S.KIRUTHIGAN LOKESH , R K S BUILDING, PARAMATHI ROAD, NAMAKKAL 637 001. VS. THE INCOME TAX OFFICER, WARD -1(1), NO.138/3,LMR SHOPPING ARCADE, SALEM MAIN ROAD, NAMAKKAL. 637 001 PAN AXOPK 2697 J ] ( )* / APPELLANT) ( +,)* /RESPONDENT) / APPELLANT BY : MS.S.SRINIRANJINI,ADVOCATE /RESPONDENT BY : MR.NETHRA PAL, JCIT, DR / DATE OF HEARING : 17 - 08 - 2017 / DATE OF PRONOUNCEMENT : 23 - 08 - 2017 - / 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), SALEM DATED 09.01.2017 PERTAINING TO ASSESSMENT YEAR 2011-12 PASSED UNDER SECTION 271(1)(C) OF THE ACT. ITA NO.578/ MDS./17 :- 2 -: 2. THE ASSESSEE HAS RAISED SIX GROUNDS IN ITS APPE AL. HOWEVER, THE CRUX OF THE ISSUE IS THAT THE ASSESSEE IS AGGRI EVED BY THE ORDER OF THE LD. CIT (A) WHO HAD SUSTAINED THE PENALTY LEVIE D AT ` 1,23,410/- U/S. 271(1)(C) OF THE ACT. 3. THE BRIEF FACTS OF THE CASE IS THAT AS PER AIR INFO RMATION DURING THE FINANCIAL YEAR 2010-11, THE ASSESSEE HAS MADE C ASH DEPOSITS OF ` 1,24,26,080/- INTO HIS SB ACCOUNT MAINTAINED WITH IDBI BANK, NAMAKKAL BRANCH. SUMMON U/S 131 WAS ISSUED TO THE ASSESSEE A ND SWORN STATEMENT RECORDED FROM HIM. IT IS STATED IN THE PENALTY ORDE R THAT THE ASSESSEE HAS STATED THAT HIS MOTHER SMT. S. RAJARAJESWARI AND SM T. V. MYTHILI ARE PARTNERS IN A BUSINESS FIRM NAMELY M/S. STAR EGG TRADERS AND HIS MOTHER IS THE MANAGING PARTNER IN M/S. STAR EGG TRADERS WHICH IS CARRYING ON THE BUSINESS OF PURCHASE AND SALE OF EGGS ON WHOLE SALE. IT IS F URTHER STATED IN THE PENALTY ORDER THAT SUMMON U/S 131 WAS ISSUED TO SMT. S. RAJ ARAJESWARI, MANAGING PARTNER OF M/S. STAR EGG TRADERS, NAMAKKAL AND SHE HAS CONFIRMED THAT MOST OF THE CASH DEPOSITS FOR EGG SALE PROCEEDS WERE MAD E IN HER SONS SB ACCOUNT AT IDBI BANK LTD. NAMAKKAL AND WITHDRAWN FR OM HER SONS ACCOUNT FOR PAYMENTS TO THE POULTRY FARMERS & EGG BROKERS. THE ASSESSING OFFICER HAS ALSO STATED THAT SHE HAS PRODUCED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 TOGETHER WITH DATE-WISE BRE AK-UP DETAILS OF CASH DEPOSITS TO THE TUNE OF ` 69,48,910/- RELATED TO THE BUSINESS FIRM M/S. STAR EGG TRADERS NAMAKKAL IN THE ASSESSESS SB MAINTAIN ED WITH IDBI BANK LTD. IT IS FURTHER STATED IN THE PENALTY ORDER THAT FOR THE REMAINING CASH DEPOSITS ITA NO.578/ MDS./17 :- 3 -: OF ` 62,27,813/- THE ASSESSEE HAS EXPLAINED THAT HIS MOT HER HAD MADE CASH DEPOSITS OUT OF SALE PROCEEDS FROM HER OWN EGG TRAD ING BUSINESS AND THE ASSESSEE HAS AGREED TO OFFER THE INCOME AT 8% OF TH E CASH DEPOSITS OF ` 62,27,813/- WHICH WORKED OUT TO ` 4,98,225/-. THE ASSESSING OFFICER FURTHER STATED IN THE PENALTY ORDER THAT NEITHER THE ASSESS EE NOR HIS MOTHER SMT. RAJESWARI HAS OFFERED INCOME, OUT OF THE CASH DEPOS ITS MADE INTO BANK TO THE TUNE OF ` 62,27,813/- AS TURNOVER FROM HER OWN EGG TRADING BU SINESS FOR THE FINANCIAL YEAR 2010-11. HENCE THE ASSESSING OFF ICER HAS COME TO CONCLUSION THAT THE ASSESSEE HAD CONCEALED THE INCO ME OF ` 4,98,225/- WHICH WAS ARRIVED FROM THE DEPOSITS MADE INTO BANK TO THE TUNE OF ` 62,27,813/- AND LEVIED MINIMUM PENALTY OF ` 1,23,410/-. 3.1 AGGRIEVED BY THE ORDER OF LD. ASSESSING OFFICE R, THE ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A). THE LD.CI T(A) CONFIRMED THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT BY PLACING RELIANCE IN THE JUDGEMENT OF SUPREME COURT IN THE CASE OF MAK DATA P. LTD. VS. CIT REPORTED IN 358 ITR 595(SC) WHEREIN HELD THAT THE V OLUNTARY DISCLOSURE DOES NOT RELEASE THE ASSESSEE FROM THE MISCHIEF OF THE PENAL PROCEEDINGS AND THE LAW DOES NOT PROVIDE THAT WHEN ASSESSEE MAKES A VOLUNTARY DISCLOSURE OF HIS CONCEALED INCOME, HE HAD TO BE ABSOLVED FROM PENALTY. AGAINST THE ORDER OF LD.CIT(A), NOW T HE ASSESSEE IS IN APPEAL BEFORE US. ITA NO.578/ MDS./17 :- 4 -: 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE THERE IS NO DISPUTE THAT THE CASH DEPOSITED INTO ASSESSEES BANK ACCOUNT IS FROM EGG TRADING BUSINES S OF ASSESSEES MOTHER. IN THE ASSESSMENT PROCEEDINGS, THE SAME WA S TREATED AS INCOME OF ASSESSEE. THEREAFTER, THE AO LEVIED PENA LTY TOWARDS THESE DISCREPANCIES NOTICED BY HIM. IN OUR OPINION, THE QUANTUM ADDITION IS ITSELF DEBATABLE WHETHER SUCH ADDITION TO BE MADE I N THE HANDS OF ASSESSEE, OR NOT, AS IS EVIDENT FROM THE FACTS NARR ATED ABOVE. IN SUCH CIRCUMSTANCES, IT IS NOT APPROPRIATE TO LEVY OF PEN ALTY ON SUCH DISCREPANCIES NOTICED BY THE AO. ACCORDINGLY, WE A RE INCLINED TO DELETE THE PENALTY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED ON 23 RD AUGUST, 2017, AT CHENNAI. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) & / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: 23 RD AUGUST, 2017. K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 3. - 1-!' / CIT(A) 5. /23- 4 / DR 2. / RESPONDENT 4. - 1 / CIT 6. 3&-5 / GF