ACIT Central Circle 2, Madurai V. R.Thilagavathy, Sivakasi

ITA 866/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4264 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 12-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment
• Section: 271(1)(c)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.866/CHNY/2018 ' (' / ASSESSMENT YEAR : 2014-15 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, MADURAI. V. SMT. R. THILAGAVATHY, NO.3, CHAIRMAN ARUNACHALAM NADAR ROAD, SIVAKASI-626 123. PAN : ABUPT 7219 D (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI AR.V. SREENIVASAN, JCIT ,-*+ . / / RESPONDENT BY : NONE 0 . 1$ / DATE OF HEARING : 01.05.2019 2!( . 1$ / DATE OF PRONOUNCEMENT : 10.05.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -19, CHENN AI, DATED 14.12.2017, DELETING THE PENALTY LEVIED BY THE ASSE SSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') FOR THE ASSESSMENT YEAR 2014-15. 2 I.T.A. NO.866/CHNY/18 2. NO ONE APPEARED FOR THE ASSESSEE EVEN THOUGH THE DATE OF HEARING WAS TAKEN NOTE BY THE LD. REPRESENTATIVE FO R THE ASSESSEE BY SIGNING IN THE APPEAL FOLDER. THEREFORE, WE HEA RD THE LD. DEPARTMENTAL REPRESENTATIVE AND PROCEEDED TO DISPOS E THE APPEAL ON MERIT. 3. SHRI AR.V. SREENIVASAN, THE LD. D.R. SUBMITTED T HAT THERE WAS A SEARCH IN THE PREMISES OF THE STANDARD FIREWO RKS PVT. LTD. ACCORDING TO THE LD. D.R., THE ASSESSEE IS ONE OF T HE DIRECTORS IN THE COMPANY AND PARTNER IN OTHER GROUP COMPANIES. APART FROM THIS, THE ASSESSEE IS ALSO RUNNING A PROPRIETARY CO NCERN IN THE NAME OF THILAGAM HIRE PURCHASE. DURING THE COURSE OF SE ARCH OPERATION ON 16.10.2014, ACCORDING TO THE LD. D.R., EXCESS GO LD JEWELLERY TO THE EXTENT OF 2290.423 GRAMS, DIAMOND JEWELLERY TO THE EXTENT OF 49.270 CARATS AND FIXED DEPOSIT RECEIPTS WERE FOUND . ACCORDING TO THE LD. D.R., THE ASSESSEE ADMITTED 78,00,000/- IN THE RETURN FILED UNDER SECTION 153C OF THE ACT AND PAID THE TAXES AL SO. SINCE THE AMOUNT ADMITTED IN THE RETURN FILED WAS FOUND TO BE UNEXPLAINED INVESTMENT, THE ASSESSING OFFICER LEVIED PENALTY UN DER SECTION 271(1)(C) OF THE ACT. HOWEVER, ON APPEAL BY THE AS SESSEE, THE CIT(APPEALS) DELETED THE PENALTY. ACCORDING TO THE LD. D.R., THE 3 I.T.A. NO.866/CHNY/18 ASSESSEE COULD NOT EXPLAIN THE SOURCE FOR INVESTMEN T IN THE GOLD JEWELLERY, DIAMOND JEWELLERY AND FIXED DEPOSITS. T HE CIT(APPEALS) FOUND THAT THE BILLS FOR PURCHASE OF JEWELLERY WERE MISPLACED, THEREFORE, THE SAME WERE NOT ACCOUNTED IN THE BOOKS OF ACCOUNT. ACCORDING TO THE LD. D.R., THE FACT REMAINS THAT TH E ASSESSEE HAS NOT ACCOUNTED THE JEWELLERY AS ADMITTED BY HER, THE REFORE, THE CIT(APPEALS) IS NOT JUSTIFIED IN DELETING THE PENAL TY. 4. HAVING HEARD THE LD. D.R., WE ALSO PERUSED THE R ELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THERE WA S A SEARCH ON 16.10.2014. THE ASSESSING OFFICER, AFTER CONSIDERI NG THE WEALTH TAX RETURN FILED FOR THE ASSESSMENT YEAR 2013-14, FOUND THAT THE ASSESSEE HAS ADMITTED ONLY 6078.387 GRAMS OF GOLD J EWELLERY AND 202.500 CARATS OF DIAMOND JEWELLERY AND EXCESS GOLD JEWELLERY WAS FOUND TO BE 2290.423 GRAMS AND EXCESS DIAMOND JEWEL LERY WAS FOUND TO BE 49.270 CARATS. IT IS NOT IN DISPUTE TH AT THE ASSESSEE DISCLOSED THE VALUE OF EXCESS GOLD JEWELLERY TO THE EXTENT OF 2290.423 GRAMS AND EXCESS DIAMOND JEWELLERY OF 49.2 70 CARATS AND FIXED DEPOSIT TO THE EXTENT OF 78,00,000/- AND PAID TAXES. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT SHE AND HER HUSBAND HAD PERSONAL DRAWINGS TO THE EXTENT OF 50,62,776/- IN THE 4 I.T.A. NO.866/CHNY/18 HANDS OF THE ASSESSEE AND 39,61,665/- IN THE HANDS OF HER HUSBAND. THE ASSESSEE ALSO CLAIMED THAT SOME OF TH E JEWELLERY PURCHASED IN THE EARLIER YEAR COULD NOT BE ACCOUNTE D ON ACCOUNT OF MISPLACEMENT OF PURCHASE BILLS. THE FACT REMAINS T HAT THERE WAS A PERSONAL WITHDRAWALS OF MONEY TO THE EXTENT OF 50,62,776/- AND 39,61,665/- IN THE LAST FIVE YEARS. THEREFORE, THI S TRIBUNAL IS OF THE CONSIDERED OPINION THAT SUBSTANTIAL AMOUNT FROM PER SONAL WITHDRAWALS MIGHT HAVE BEEN USED FOR PURCHASING JEW ELLERY. THE FACT REMAINS THAT THE ASSESSEE IS MAINTAINING ACCOU NTS FOR JEWELLERY AND ALSO FILING WEALTH-TAX RETURN REGULARLY. SOME OF THE JEWELLERY WAS NOT ACCOUNTED AND THE ASSESSEE CLAIMS THAT THIS IS BECAUSE OF MISPLACEMENT OF BILLS. THIS TRIBUNAL IS OF THE CON SIDERED OPINION THAT WHEN THE ASSESSEE HAD PERSONAL WITHDRAWALS AS EXPLAINED ABOVE AND FILED THE RETURN OF INCOME CONSEQUENT TO THE SEARCH UNDER SECTION 153C OF THE ACT ADMITTING THE VALUE O F JEWELLERY AND FIXED DEPOSITS, IT CANNOT BE SAID THAT THERE WAS CO NCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. THEREFORE, THE CIT(APPEALS) HAS RIGHTLY DELETED THE PENALTY LE VIED BY THE ASSESSING OFFICER. THIS TRIBUNAL DO NOT FIND ANY R EASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDING LY THE SAME IS CONFIRMED. 5 I.T.A. NO.866/CHNY/18 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE COURT ON 10 TH MAY, 2019 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESA N) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 10 TH MAY, 2019. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-19, CHENNAI 4. PRINCIPAL CIT, CENTRAL-2, CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.