Sri Kaki Srihari., Visakhapatnam V. The ITO, Ward-1(3), Visakhapatnam

ITA 75/VIZ/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6998 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 25-01-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G S S GOPINATH
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.50/VIZAG/2007 ASSESSMENT YEAR : 2004-05 ITO WARD-1(3) VISAKHAPATNAM KAKI SRIHARI VISAKHAPATNAM (APPELLANT) VS. (RESPONDENT) PAN NO.AIVPK 6898H ITA NO.75/VIZAG/2008 ASSESSMENT YEAR : 2004-05 KAKI SRIHARI VISAKHAPATNAM ITO WARD-1(3) VISAKHAPATNAM (APPELLANT) VS. (RESPONDENT) APPELLANT BY: SHRI G.S.S. GOPINATH, DR RESPONDENT BY: SHRI G.V.N. HARI, CA ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- ITA NO.50 OF 2007: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 19.1.2007 PASSED BY THE CIT (A)-I, VISAKHAPATNAM, A ND IT PERTAINS TO THE ASSESSMENT YEAR 2004-05. 2. BOTH THE PARTIES HAVE AGREED THAT THE REVENUE EF FECT IN THIS CASE IS LESS THAN RS.2,00,000/- AND AS SUCH THE SAME ARE LIABLE TO BE DISMISSED IN VIEW OF JUDGEMENT OF THE JURISDICTIONAL HIGH COURT IN THE C ASE OF C.I.T. VS A. RAJENDRA PRASAD (299 ITR 227) . IN THE SAID DECISION, HONBLE COURT HAS HELD THA T THE CBDT INSTRUCTIONS FIXING MONETARY LIMITS FOR FILING APPEALS ARE STATUTORY IN NATURE AS THEY WERE ISSUED BY THE CBDT IN EXERCISE OF POWERS UNDER SECTION 119 OF THE INCOME TAX ACT AND THE REVENUE HAS TO NE CESSARILY FOLLOW THEM AND IF A CASE FALLS UNDER ONE OF THE EXCEPTIONS PRO VIDED IN THE CIRCULARS, A SPECIFIC GROUND SHOULD BE RAISED IN THAT REGARD. A DMITTEDLY, THE REVENUE HAS 2 NOT RAISED A SPECIFIC GROUND TO SHOW THAT THE CASE FALLS WITHIN THE EXCEPTIONS PROVIDED IN THE CIRCULARS OF CBDT. 3. UNDER THE CIRCUMSTANCES, BY RESPECTFULLY FOLLOWI NG THE DECISION OF THE HONBLE ANDHRA PRADESH HIGH COURT CITED SUPRA, WE D ISMISS THE APPEAL AS UN- ADMITTED ON THE GROUND THAT IT IS CONTRARY TO THE P OLICY DECISION TAKEN BY THE CBDT. ITA NO.75 OF 2008: 4. THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) ON A SOLITARY GROUND THAT CIT(A) IS NOT JUST IFIED IN UPHOLDING THE PENALTY U/S 271(1)(C) OF THE I.T. ACT. DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE ORDER OF THE TRIBUNAL IN THE CASE OF D. VENKATA RAMANA VS. ITO IN ITA NO. 76 OF 2008 WITH THE SUBMISSIONS THAT IN THIS CASE THE PENALTY WAS LEVIE D ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PROPERTY. THIS PROPE RTY WAS JOINTLY OWNED BY THE ASSESSEE AS WELL AS SHRI D. VENKATA RAMANA. IN BOTH THE CASES THE REVENUE HAS LEVIED THE PENALTY U/S 271(1)(C) OF THE ACT. IN THE CASE OF D. VENKATA RAMANA, THE TRIBUNAL HAS ADJUDICATED THE IS SUE AND HELD THAT UNDER THE GIVEN CIRCUMSTANCES, THE PENALTY U/S 271(1)(C) CANNOT BE LEVIED. THE OBSERVATION OF THE TRIBUNAL ARE EXTRACTED HEREUNDER : THE LD. CIT(A), AFTER EXTRACTING HIS DECISION ON TH E QUANTUM APPEAL, CAME TO THE CONCLUSION THAT THE ASS ESSEE HAS FAILED TO DISCHARGE THE BURDEN PLACED UPON HIM UNDE R THE EXPLANATION TO SECTION 271 AND ACCORDINGLY CONFIRME D THE PENALTY. IT IS WELL ESTABLISHED THAT THE ENTIRE MATTER HAS T O BE CONSIDERED AFRESH DURING THE COURSE OF PENALTY PROCEEDINGS EVE N THOUGH THE FINDINGS GIVEN IN THE ASSESSMENT PROCEEDINGS WOULD OFFER GOOD GROUND IN TAKING THE DECISION. WE NOTICE FROM THE RECORD THAT THE ASSESSEE HAS CONTESTED THE THREE ISSUES BY OFFERING CERTAIN EXPLANATIONS. WITH REGARD TO THE FIRST ADDITION, T HE ASSESSEE HAS STATED THAT HE WITHDREW THE AMOUNT FROM THE FIRM IN WHICH HE IS PARTNER AND LATER REPAID THE SAME. IT WAS ALSO SUB MITTED THAT THE PROPERTY WAS PURCHASED BY THE FIRM IN THE NAME OF T HE PARTNERS AND HENCE THE TRANSACTIONS WITH THE FIRM SHOULD NOT BE SUSPECTED. WITH REGARD TO THE NEXT ADDITION, WE NOTICE THAT TH E SAME HAS BEEN MADE WITHOUT VERIFYING THE CREDITORS FROM WHOM THE ASSESSEE CLAIMED TO HAVE AVAILED THE LOAN. WITH REGARD TO T HE THIRD ADDITION, THE TAX AUTHORITIES HAVE VERIFIED THE WITHDRAWALS M ADE ONLY IN THE 3 IMPUGNED ASSESSMENT YEAR AND HAVE ARRIVED AT THE CO NCLUSIONS. THOUGH THE ASSESSEE COULD NOT SUBSTANTIATE HIS CONT ENTIONS WITH CONCRETE EVIDENCES, EQUALLY THE TAX AUTHORITIES DID NOT HAVE ANY EVIDENCE TO DISPROVE THE CONTENTIONS OF THE ASSESSE E. HENCE, IN OUR OPINION, THESE THREE ADDITIONS COULD NOT LEAD T O LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. ACCORDINGLY, WE DIRECT T HE ASSESSING OFFICER TO DELETE THE PENALTY OF RS.81,183/- LEVIED U/S 271(1)(C) OF THE ACT. 5. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTEND ED THAT SINCE THE TRIBUNAL HAS DELETED THE PENALTY IN THE HANDS OF TH E CO-OWNER OF THE PROPERTY UNDER THE SIMILAR SET OF FACTS, THE PENALTY U/S 271 (1)(C) IS NOT SUSTAINABLE IN THE ASSESSEES CASE. THE LD. D.R. ON THE OTHER HA ND HAS SUPPORTED THE ORDER OF THE CIT(A). 6. HAVING CAREFULLY EXAMINED THE ORDER OF THE LOWER AUTHORITIES AND THE ORDER OF THE TRIBUNAL IN THE CASE OF CO-OWNER OF TH E PROPERTY AND WE FIND THAT TRIBUNAL HAS DELETED THE PENALTY IN THE CASE OF CO- OWNER OF THE PROPERTY UNDER THE SIMILAR CIRCUMSTANCES. WE THEREFORE FIND NO REASON TO TAKE A CONTRARY VIEW IN THIS APPEAL. WE ACCORDINGLY, FOLL OWING THE ORDER OF THE TRIBUNAL IN THE CASE OF D.V. RAMANA SET ASIDE THE O RDER OF THE CIT(A) AND DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED AND THAT OF REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 19-3-2010 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 19 TH MARCH, 2010 4 COPY TO 1 THE ITO, WARD-1(3), VISAKHAPATNAM 2 SRI KAKI SRIHARI, PR. M/S. SREENIJA CONSTRUCTIONS , D.NO.49-30-6/1, MADHURANAGAR, VISAKHAPATNAM. 3 THE CIT-1, VISAKHAPATNAM 4 THE CIT(A)-I, VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM