DCIT, Cir-5(1), Hyderabad V. P. Srinivas Reddy, Hyderabad

ITA 597/HYD/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3210 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 08-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V SRINIVAS; T DIWAKAR PRASAD
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.595/HYD/2011 : ASSESSMENT YEAR 2003-0 4 ITA NO.596/HYD/2011 : ASSESSMENT YEAR 2004-0 5 ITA NO.597/HYD/2011 : ASSESSMENT YEAR 2005-0 6 ITA NO.598/HYD/2011 : ASSESSMENT YEAR 2006-0 7 DY. COMMISSIONER OF INCOME- TAX CIRCLE 5(1), HYDERABAD VS SHRI P.SRINIVASA REDDY, HYDERABAD. (PAN AECPP 6016 M) (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI V.SRINIVAS & T.DIWAKAR PRASAD RESPONDENT BY : NONE O R D E R PER G.C.GUPTA, VICE PRESIDENT: THESE APPEALS BY THE REVENUE FOR THE ASSESSMENT Y EARS 2003-04 TO 2006-07 ARE DIRECTED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS). THESE ARE BE ING DISPOSED OFF WITH THIS CONSOLIDATED ORDER. 2. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE RESPONDENT, AND THEREFORE, THESE APPEALS OF THE REVENUE ITA NO.7595 TO 598/HYD/2011 SHRI P.SRINIVASA REDDY, HYDERABAD. 2 ARE BEING DISPOSED OFF EX-PARTE QUA THE ASSESSEE- ON MERITS, AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE . ITA NO.595/HYD/2011 : ASSESSMENT YEAR 2003-04 3. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESEN TATIVE. WE FIND THAT THE PENALTY UNDER S.271(1)(C) OF THE A CT WAS LEVIED IN THIS CASE ON THE GROUND THAT SOME ADDITIONAL INCOME WAS ADMITTED BY THE ASSESSEE AND ALSO ON THE GROUND THAT THE ASSESS ING OFFICER RESTRICTED THE AGRICULTURAL INCOME TO A CERTAIN FIG URE, AND THE BALANCE AMOUNT WAS TREATED AS INCOME FROM OTHER SOURCES. WE FIND THAT THERE IS NO MATERIAL BROUGHT ON RECORD ON BEHALF O F THE REVENUE, TO SUGGEST THAT THE DEPARTMENT WAS IN POSSESSION OF A NY INCRIMINATING EVIDENCE OR MATERIAL TO NAIL THE ASSESSEE, DUE TO W HICH THE ASSESSEE WAS FORCED TO ADMIT THE ADDITIONAL INCOME. THE CLAI M OF THE ASSESSEE WAS THAT IT HAS ACCEPTED THE ADDITIONAL INCOME VOLU NTARILY AND THE PART OF AGRICULTURAL INCOME WAS TREATED AS INCOME F ROM OTHER SOURCES BY THE ASSESSING OFFICER ONLY ON ESTIMATE BASIS. T HIS CLAIM OF THE ASSESSEE COULD NOT BE CONTROVERTED BY THE ASSESSING OFFICER. THE CIT(A) HAS GIVEN A FINDING THAT THE EXAMINATION OF THE FACTS OF THE CASE REVEAL THAT THE ASSESSEE HAS NOT CONCEALED ANY FACT NOR WAS ANYTHING DISCOVERED BY THE ASSESSING OFFICER BEYOND THE RETURN OF INCOME AND ON THE OTHER HAND, THE ASSESSEE VOLUNTAR ILY HAD ADMITTED THE ADDITIONAL INCOME IN THE REVISED RETURN OF INCO ME. IN RESPECT OF THE ADDITION TOWARDS AGRICULTURAL INCOME, WHICH IS BASED ON ESTIMATION, WE FIND THAT THERE IS NO DETECTION ON THE PART OF THE DEPARTMENT IN THIS CASE AND THE ADDITION HAS BEEN M ADE ON ESTIMATE BASIS ONLY, AND THEREFORE, THERE WAS NO MISTAKE IN THE ORDER OF THE ITA NO.7595 TO 598/HYD/2011 SHRI P.SRINIVASA REDDY, HYDERABAD. 3 CIT(A) IN HOLDING THAT THERE IS NO DEFAULT ON THE PART OF THE ASSESSEE WARRANTING PENALTY UNDER S.271(1)(C) OF THE ACT, AN D IN CANCELLING THE PENALTY LEVIED ON THE ASSESSEE. ACCORDINGLY, TH E ORDER OF THE CIT(A) IS CONFIRMED AND THE GROUNDS OF THE REVENUE IN THIS APPEAL ARE REJECTED. ITA NO.596/HYD/2011 : ASSESSMENT YEAR 2004-0 5 4. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESEN TATIVE. WE FIND THAT PENALTY UNDER S.271(1)(C) OF THE ACT W AS LEVIED IN RELATION TO THE ADDITION MADE BY THE ASSESSING OFFI CER ;BY INVOKING THE PROVISIONS OF S.50C OF THE ACT AND ADOPTING THE VALUE AS PER THE STAMP VALUATION AUTHORITY FOR THE PURPOSE OF PAYME NT OF STAMP DUTY AND ALSO ON ACCOUNT OF RESTRICTION OF AGRICULTURAL INCOME TO CERTAIN FIGURE, TREATING THE BALANCE AGRICULTURAL INCOME CL AIMED BY THE ASSESSEE AS HIS INCOME FROM OTHER SOURCES. WE FIND THAT THERE WAS NO INCRIMINATING MATERIAL OR EVIDENCE AVAILABLE WIT H THE DEPARTMENT TO ENHANCE THE SALE VALUE OF THE PROPERTY, EXCEPTIN G INVOKING THE DEEMING PROVISIONS OF S.50C OF THE ACT. IT IS WELL SETTLED THAT PENALTY UNDER S.271(1)(C) IS NOT IMPOSABLE ON ADDITIONS MAD E ON INVOKING THE DEEMING PROVISION OF LAW. PART OF THE AGRICULT URAL INCOME HAS BEEN TREATED AS INCOME FROM OTHER SOURCES BY WAY OF ESTIMATE ONLY. WE FIND THAT THE CIT(A) HAS GIVEN A FINDING THAT TH E ADDITION OUT OF AGRICULTURAL INCOME WAS BASED ONLY ON ESTIMATION AN D THEREFORE, THERE WAS NO DEFAULT ON THE PART OF THE ASSESSEE WA RRANTING PENALTY UNDER S.271(1)(C) OF THE ACT. ALL THE MATERIAL FAC TS WERE PLACED ON RECORD BY THE ASSESSEE AT THE TIME OF ASSESSMENT B EFORE THE ASSESSING OFFICER. IN THESE FACTS OF THE CASE, WE ARE OF THE CONSIDERED ITA NO.7595 TO 598/HYD/2011 SHRI P.SRINIVASA REDDY, HYDERABAD. 4 VIEW THAT THERE IS NO MISTAKE IN THE ORDER OF THE C IT(A) IN HOLDING THAT THERE WAS NO DEFAULT ON THE PART OF THE ASSESS EE UNDER S.271(1)(C) OF THE ACT, AND IN CANCELLING THE PENAL TY LEVIED ON THE ASSESSEE FOR THIS YEAR. ACCORDINGLY, THE ORDER OF T HE CIT(A) IS CONFIRMED AND THE GROUNDS OF THE REVENUE IN THIS AP PEAL ARE REJECTED. ITA NO.597/HYD/2011 : ASSESSMENT YEAR 2005-0 6 5. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESEN TATIVE. THE ONLY GROUND ON WHICH PENALTY UNDER S.271(1)(C) WAS LEVIED WAS ON ACCOUNT OF THE ADDITION MADE BY THE ASSESSING OF FICER, BY RESTRICTING THE AGRICULTURAL INCOME TO A CERTAIN F IGURE AND TREATING THE BALANCE AS INCOME FROM OTHER SOURCES. WE FIND THAT THE DEPARTMENT IS NOT IN POSSESSION OF ANY INCRIMINATING MATERIAL OR EVIDENCE TO SUGGEST ANY INFLATION OF AGRICULTURAL INCOME ON THE PART OF THE ASSESSEE. THE ADDITION MADE ON ACCOUNT OF AGRICULTU RAL INCOME BY THE ASSESSING OFFICER WAS BASED ON ESTIMATE ONLY. IN T HESE FACTS OF THE CASE, WE HOLD THAT THE CIT(A) WAS JUSTIFIED IN CONC LUDING THAT THE ADDITION WAS BASED ONLY ON ESTIMATION AND THEREFORE , THERE WAS NO DEFAULT ON THE PART OF THE ASSESSEE WARRANTING PENA LTY UNDER S.271(1)(C) OF THE ACT, AND ACCORDINGLY IN CANCELLI NG THE PENALTY LEVIED BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDER OF THE CIT(A) IS CONFIRMED AND THE GROUNDS OF THE REVENUE IN THIS APPEAL ARE REJECTED. ITA NO.7595 TO 598/HYD/2011 SHRI P.SRINIVASA REDDY, HYDERABAD. 5 ITA NO.598/HYD/2011 : ASSESSMENT YEAR 2006-0 7 6. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESEN TATIVE. WE FIND THAT THE PENALTY LEVIED UNDER S.271(1)(C) O F THE ACT WAS CANCELLED BY THE CIT(A) ON THE GROUND THAT THE ADDI TION IN QUESTION ON THE BASIS OF WHICH THE PENALTY UNDER S.271(1)(C) WAS LEVIED, HAS BEEN DELETED IN APPEAL BY THE CIT(A) IN ITA NO.521/ CC-6.HYD/ CIT(A)-I/07-08 DATED 15.7.2008, AND THEREFORE, THER E WAS NO QUESTION OF LEVYING OR SUSTAINING ANY PENALTY ON T HAT ADDITION. WE FIND THAT SINCE THE VERY BASIS FOR THE LEVY OF PENA LTY UNDER S.271(1)(C) OF THE ACT DOES NOT EXIST, AS THE ADDI TION IN QUESTION HAS BEEN DELETED IN FIRST APPEAL BY THE CIT(A), THE PEN ALTY LEVIED UNDER S.271(1)(C) OF THE ACT WAS RIGHTLY CANCELLED BY THE CIT(A). HOWEVER, WE MAKE IT CLEAR THAT WE ARE NOT GOING INTO THE MER ITS OF THE ISSUE OF VALIDITY OF PENALTY IMPOSED UNDER S.271(1)(C) ON AC COUNT OF THE ADDITION FOR UNEXPLAINED INVESTMENT IN THE PROPERTY , FOR THE REASON THAT SINCE THE ADDITION ITSELF HAS BEEN DELETED, TH ERE REMAINS NO BASIS FOR SUSTAINING THE PENALTY. ACCORDINGLY, THE GROUN DS OF APPEAL OF THE REVENUE ARE REJECTED. 7. IN THE RESULT, ALL THE FOUR APPEALS OF THE REVE NUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 15.7.2011 SD/- SD/- (CHANDRA POOJARI) (G.C. GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DATED 15 TH JULY, 2011 ITA NO.7595 TO 598/HYD/2011 SHRI P.SRINIVASA REDDY, HYDERABAD. 6 COPY FORWARDED TO: 1. SHRI P.SRINIVASA REDDY, 5-8-149, NAMPALLY, HYDERABA D. 2. DY. COMMISSIONER OF INCOME - TAX(APPEALS) 5(1), HYDERABAD 3. CIT(A)-V, HYDERABAD . 4. COMMISSIONER OF INCOME-TAX-IV, HYDERABAD 5. THE D.R., ITAT, HYDERABAD. B.V.S.