Mr Chaudhari Prabhakar Sambhu, Dhule V. ITO Ward 3 (2), Dhule,

ITA 943/PUN/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0747 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-09-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 10-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K JADHAV
• Keywords: Business income; Source of fund; Revised return
• Section: 131; 148

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . . , # BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM ITA NO.943/PN/2012 ASSESSMENT YEAR : 2005-06 MR. CHAUDHARI PRABHAKAR SAMBHU, KALPANA TALKIES MAIN ROAD, TALODA, DIST. NANDURBAR, DHULE 425 413. PAN : AAMPC0246L . APPELLANT VS. THE INCOME TAX OFFICER, WARD 3(2), DHULE. . RESPONDENT / APPELLANT BY : NONE / DEPARTMENT BY : SHRI S.K. JADHAV, JCIT / DATE OF HEARING : 28.12.2015 / DATE OF PRONOUNCEMENT: 31.12.2015 / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 19.09.2011 OF THE CIT(A)-II, NASHIK RELATING TO ASS ESSMENT YEAR 2005-06. 2. ALTHOUGH, A NUMBER OF GROUNDS IN APPEAL HAVE BEE N RAISED BY THE ASSESSEE, THESE RELATE TO THE ORDER OF THE CIT(A) IN CONFIRMI NG THE PENALTY OF RS.99,329/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1 )(C) OF THE I.T. ACT. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE WHEN THE NAME OF THE ASSESSEE WAS CALLED. NO ADJOURNMENT APPLICATION HAS BEEN F ILED BY THE ASSESSEE SEEKING ADJOURNMENT OF THE HEARING. THEREFORE, THE APPEAL IS BEING DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE. 2 ITA NO.943/PN/2012 4. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND DERIVES INCOME FROM COUNTRY LIQUOR ON RETAIL BASIS AND CINE MA THEATRE. HE FILED HIS ORIGINAL RETURN OF INCOME ON 24.03.2006 DECLARING TOTAL INCO ME OF RS.77,862/- AND AGRICULTURAL INCOME OF RS.3,07,300/-. THE ADIT (IN VESTIGATION), NASHIK HAS CONDUCTED OPEN ENQUIRIES. DURING THE COURSE OF SUC H ENQUIRY, THE ASSESSEE HAD FURNISHED THE COPIES OF 7/12 EXTRACTS IN RESPECT OF AGRICULTURAL LAND HELD BY HIM. THE ASSESSEE WAS HOLDING 4 HEC. 05 R. OF AGRICULTUR AL LAND. IT WAS SEEN FROM THE 7/12 EXTRACT AND COPIES OF SALE PATTIES OF AGRICULT URAL PRODUCE SUBMITTED BY THE ASSESSEE THAT THE AGRICULTURAL PRODUCE MENTIONED IN 7/12 EXTRACT DID NOT MATCH WITH THE SALE PATTIES PRODUCED BY THE ASSESSEE. LOOKING TO THE HOLDING OF AGRICULTURAL LAND THE AGRICULTURAL INCOME SHOWN WAS ALSO CONSIDE RED TO BE EXCESSIVE. THE ASSESSEE IN HIS STATEMENT RECORDED UNDER SECTION 13 1 ADMITTED THAT THERE WAS UNEXPLAINED INCOME OF RS.3,00,000/- DURING THE YEAR UNDER CONSIDERATION WHICH WAS SHOWN BY HIM AS AGRICULTURAL INCOME IN THE RETU RN OF INCOME AND ACCORDINGLY THE SAME WAS OFFERED BY HIM AS UNEXPLAINED INCOME. THE ASSESSEE ACCORDINGLY FILED A REVISED RETURN OF INCOME ON 03.10.2007 DECL ARING TOTAL INCOME OF RS.3,77,862/- AND AGRICULTURAL INCOME OF RS.3,07,30 0/- TO REGULARIZE THE RETURN FILED BY HIM EARLIER. THE ASSESSING OFFICER ISSUED NOTIC E UNDER SECTION 148 ON 26.03.2008 AND THEREAFTER COMPLETED THE ASSESSMENT BY ACCEPTING THE INCOME DECLARED AT RS.3,77,860/-. 5. SUBSEQUENTLY, THE ASSESSING OFFICER INITIATED PE NALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE I.T. ACT. IT WAS EXPLAINE D BY THE ASSESSEE THAT ADDITIONAL INCOME WAS DECLARED TO BUY PEACE AND TO AVOID PROTR ACTED LITIGATION. IT WAS SUBMITTED THAT THE REVISED RETURN SHOWING HIGHER IN COME WAS FILED ON THE BASIS OF WHICH NOTICE FOR REOPENING WAS ISSUED. THE INCOME ADDED HAS NO JUSTIFICATION AND IS ESTIMATED. IT WAS FURTHER SUBMITTED THAT THE AS SESSING OFFICER HAS DISCRETION TO LEVY OR NOT TO LEVY THE PENALTY. NO SATISFACTION I S GIVEN IN THE ASSESSMENT ORDER AND NO MENS REA IS FOUND OUT AND WAS ABSENT. 3 ITA NO.943/PN/2012 6. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. HE NOTED THAT THE UNEXPLAINED INC OME OF RS.3,00,000/- SHOWN BY THE ASSESSEE AS AGRICULTURAL INCOME HAS BEEN OFF ERED BY THE ASSESSEE IN THE REVISED RETURN AFTER ENQUIRIES WERE CONDUCTED BY TH E DEPARTMENT. THE SOURCE OF FUNDS OF RS.3,00,000/- COULD NOT BE PROVED BY THE A SSESSEE EITHER DURING THE COURSE OF ENQUIRIES CONDUCTED BY THE DEPARTMENT OR DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSEE WAS NOT ABLE TO EXPLAIN THE SOURCES OF FUND. IT IS CLEAR THAT THE ASSESSEE HAS MISAPPROPR IATED HIS REGULAR INCOME EARNED BY WAY OF VARIOUS SOURCES OF INCOME INTO AGRICULTUR AL INCOME IN THE BOOKS OF ACCOUNT TO AVOID THE TAX LIABILITY. BY OFFERING OF RS.3,00,000/- AS UNEXPLAINED INCOME IN THE STATEMENT RECORDED BY THE DEPARTMENT ON OATH UNDER SECTION 131, THE ASSESSEE HAS ADMITTED THAT HE HAS COMMITTED DEF AULT OF CONCEALMENT OF PARTICULARS OF HIS INCOME. THE ASSESSEE DELIBERATE LY FILED THE INACCURATE PARTICULARS OF HIS INCOME IN HIS ORIGINAL RETURN OF INCOME. TH EREFORE, THE ASSESSEE KNOWINGLY AND WILLFULLY FILED INACCURATE PARTICULARS OF HIS I NCOME AND THEREBY CONCEALED THE INCOME. REJECTING THE VARIOUS DECISIONS CITING BEF ORE HIM, THE ASSESSING OFFICER LEVIED PENALTY OF RS.99,329/- U/S.271(1)(C) OF THE I.T. ACT, 1961 BEING 100% OF TAX SOUGHT TO BE EVADED. 7. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT H E HAS FILED THE RETURN OF INCOME VOLUNTARILY AND BEFORE SERVICE OF NOTICE UND ER SECTION 148 WHICH WAS ISSUED TO REGULARIZE THE RETURN FILED. THE ASSESSEE HAS O FFERED OF RS.3,00,000/- FOR TAXATION TO BUY PEACE AND TO AVOID PROTRACTED LITIG ATION. THE ASSESSING OFFICER HAS NOTHING ON RECORD TO ARRIVE AT THAT THE INCOME IS U NDISCLOSED INCOME EXCEPT THE STATEMENT OF THE ASSESSEE ESTIMATING THE INCOME OF RS.3,00,000/- OUT OF THE AGRICULTURAL INCOME. IT WAS FURTHER SUBMITTED THAT IN ABSENCE OF INCRIMINATING MATERIAL WITH REGARD TO THE INCOME DISCLOSED, THE D ISCLOSURE IS LIABLE TO BE TREATED AS VOLUNTARY HAVING BEEN MADE WITHOUT ANY COMPULSIO N OR CONSTRAINT OF EXPOSURE TO ADVERSE ACTION BY THE DEPARTMENT. REGARDING THE VA RIOUS DECISIONS, IT WAS 4 ITA NO.943/PN/2012 SUBMITTED THAT THE ASSESSING OFFICER IS NOT JUSTIFI ED IN LEVYING PENALTY OF RS. 99,329/-. HOWEVER, THE LD. CIT(A) WAS ALSO NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND CONFIRMED THE PENALTY BY OBSERVING AS UNDER :- 6. I HAVE CAREFULLY GONE THROUGH THE SUBMISSION OF THE APPELLANT, PENALTY ORDER, ASSESSMENT ORDER AND MATERIAL ON REC ORD. IT IS AN UNDISPUTED FACT THAT THE APPELLANT IN HIS STATEMENT RECORDED U/S 13 1 OF THE IT ACT ON OATH BY ADIT (INV-IL), NASHIK ON 19/09/2007, INTER ALIA CON FESSED THAT THE AGRICULTURAL INCOME OF RS.3,07,300/- SHOWN BY HIM IN AY 2005-06, FROM THE SALE OF AGRICULTURAL PRODUCE DID NOT MATCH WITH THE AGRICUL TURAL CROPS SHOWN IN 7/12 EXTRACTS. THE APPELLANT WAS HOLDING ONLY 4 HA 0.5 R OF AGRICULTURAL LAND AND THE AGRICULTURAL INCOME SHOWN IN AY 2005-06 WAS ON A VE RY HIGHER SIDE TAKING INTO CONSIDERATION THE SIZE OF THE AGRICULTURAL LAND HOL DING. DURING THE ENQUIRIES CONDUCTED BY THE ADIT(INV-II), NASHIK, THE APPELLAN T DECLARED THE SAID AGRICULTURAL INCOME AS BUSINESS INCOME AND REVISED THE RETURN. T HE APPELLANT'S CONTENTIONS THAT THE AO DID NOT WRITE SATISFACTION NOTE AND THAT HE REVISED THE RETURN ON HIS OWN ARE FACTUALLY INCORRECT. THE AO H AS DULY RECORDED HIS SATISFACTION IN REGARD TO INITIATION OF PENALTY PRO CEEDINGS U/S 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME. SIMILA RLY, THE APPELLANT REVISED THE RETURN ONLY AFTER ENQUIRIES WAS MADE BY ADIT(INV) A ND HE WAS CONFRONTED ON THE ISSUE OF GENUINENESS OF AGRICULTURAL INCOME. TH E DECLARED ADDITIONAL INCOME IS NOT ON ESTIMATED BASIS. IT IS THE APPELLANT'S UN EXPLAINED BUSINESS INCOME WHICH WAS SHOWN AS AGRICULTURAL INCOME IN THE ORIGI NAL RETURN. THE FACTS OF VARIOUS CASES CITED BY THE APPELLANT ARE NOT APPLIC ABLE IN THIS CASE. THERE IS NO DOUBT THAT THE APPELLANT FURNISHED INACCURATE PARTI CULARS OF INCOME IN THE ORIGINAL RETURN WITH A MALA FIDE INTUITION TO EVADE TAX. THE APPELLANT CONCOCTED THE SALE RECEIPTS OF THE AGRICULTURAL PRODUCE. THE APPELLANT KNEW FROM THE VERY BEGINNING THAT HIS CLAIM WAS NOT GENUINE. THE HON'B LE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS RAKESH SURI (2011) 331 ITR 458 ( ALL) HAS HELD THE LEVY OF PENALTY U/S 271(1)(C) JUSTIFIABLE WHERE THE ASSESSE E HAD SURRENDERED HIS INCOME AFTER THE AO HAD MADE SUBSTANTIAL PROGRESS IN THE I NVESTIGATION. THE HIGH COURT HAS HELD THAT SUCH SURRENDER CANNOT BE HELD TO BE V OLUNTARY NOR MADE BONA- FIDE, SO AS TO AVOID PENALTY. IN THIS CASE THE APPE LLANT HAD FILED THE REVISED RETURN WITH THE KNOWLEDGE THAT THE DEPARTMENT HAD D ETECTED THE DISCREPANCIES IN THE 7/12 EXTRACTS VIS-A-VIS SALE BILLS OF VARIOU S AGRICULTURAL PRODUCE FOR WHICH AGRICULTURAL INCOME WAS SHOWN IN THE ORIGINAL RETUR N. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED V IEW THAT THE APPELLANT FURNISHED INACCURATE PARTICULARS OF THE INCOME INTE NTIONALLY TO EVADE TAX AND THE AO WAS JUSTIFIED IN LEVYING PENALTY U/S 271(1)( C) FOR FURNISHING INACCURATE PARTICULARS. THE SAME IS HEREBY CONFIRMED. 8. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUP PORTED THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE RETURN FILED BY THE ASSESSEE CANNOT BE SAID AS VOLUNTARY BECAUSE ONLY AFTER THE ENQUIRY WAS CONDU CTED BY THE ADIT (INVESTIGATION), NASHIK THAT THE ASSESSEE DECLARED THE SAID INCOME AS BUSINESS INCOME IN THE REVISED RETURN. SINCE THE ORDER OF T HE CIT(A) UPHOLDING THE PENALTY LEVIED BY THE ASSESSING OFFICER IS EXHAUSTIVE, THER EFORE, THE SAME SHOULD BE UPHELD. HE SUBMITTED THAT UNLESS THE PENALTY IS LE VIED IN SUCH TYPES OF CASES THEN THERE WILL BE BLATANT MIS-UTILIZATION OF THE PROVIS IONS OF THE ACT. 5 ITA NO.943/PN/2012 9. WE HAVE CONSIDERED THE ARGUMENTS ADVANCED BY THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL AVAILABLE O N RECORD. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE IN HIS STATEMENT RECO RDED UNDER SECTION 131 ON OATH BY THE ADIT (INVESTIGATION), NASHIK ON 19.09.2007 H AD CONFESSED THAT THE AGRICULTURAL INCOME OF RS.3,07,300/- SHOWN BY HIM D URING THE ASSESSMENT YEAR 2005-06 FROM SALE OF AGRICULTURAL PRODUCE DID NOT M ATCH WITH THE AGRICULTURAL CROPS SHOWN IN THE 7/12 EXTRACTS. THE RELEVANT QUESTION AND ANSWER OF THE STATEMENT READ AS UNDER :- QUE NO.25 YOU HAVE FILED RETURN OF INCOME FOR A.Y. 05/06 & A.Y. 06/07 IN THE SAID RETURN YOU HAVE SHOWN AGRICULTURE INCOME OF RS .307300/- & RS.86250/- RESPECTIVELY IN ADDITION EXTRACT 7/12 IS ALSO ENCLO SED BUT IN 7/12 EXTRACT FOOD GRAIN SHOWN IS DIFFER OTHER THAN SHOWN IN THE BOOKS OF AC COUNT. THIS IS NOT TALLY. WHY? ANS : YES IT IS CERTAIN THAT THERE IS DIFFERENCE IN THE AGRICULTURE INCOME HENCE I DECLARE MY ADDITION INCOME AS A BUSINESS INCOME FOR A.Y. 05/06 & A.Y. 06/07 OF RS.300000/- & RS.50000/- RESPECTIVELY THAT THE SAID AGRICULTURE LAND IS OWNED BY ME & I GOT THE AGRICULTURE INCOME. 10. FROM THE ABOVE, IT IS CLEAR THAT THE ASSESSEE H AD NO PLAUSIBLE EXPLANATION TOWARDS THE SOURCE OF RS.3,00,000/- WHICH HE HAD IN TRODUCED IN HIS BUSINESS AS AGRICULTURAL INCOME. ALTHOUGH THE ASSESSEE HAS FIL ED THE REVISED RETURN BY DISCLOSING THE ADDITIONAL INCOME OF RS.3,00,000/- T HE SAME CANNOT BE SAID TO BE VOLUNTARY BECAUSE THE RETURN WAS FILED ONLY AFTER T HE ENQUIRIES WERE CONDUCTED BY THE DEPARTMENT AND THE ASSESSEE WAS UNABLE TO SUBST ANTIATE THE SOURCE OF THE SAME FOR WHICH HE DECLARED THE ADDITIONAL INCOME. 11. AS PER THE PROVISIONS OF SECTION 271(1)(C) OF T HE ACT, PENALTY IS LEVIABLE IF THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOM E OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IN THE INSTANT CASE, T HE ASSESSEE BY DECLARING BUSINESS INCOME AS AGRICULTURAL INCOME IN THE RETURN OF INCO ME HAS CONCEALED THE PARTICULARS OF HIS INCOME AND FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THEREFORE THE PROVISIONS OF SECTION 271(1)(C) ARE CLEARLY ATTRACT ED. VARIOUS DECISIONS RELIED UPON BY THE ASSESSEE BEFORE THE CIT(A) ARE DISTINGUISHAB LE AND ARE NOT APPLICABLE TO THE 6 ITA NO.943/PN/2012 FACTS OF THE PRESENT CASE. WE THEREFORE UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE AND THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSE D. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THIS 31 ST DAY OF DECEMBER, 2015. SD/- SD/- ( SUSHMA CHOWLA ) ( R.K. PANDA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE ; DATED : 31 ST DECEMBER, 2015. % &() *) / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, NASHIK; 4) THE CIT-II, NASHIK; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. / BY ORDER , ' # //TRUE COPY// $% # ' / SR. PRIVATE SECRETARY ', / ITAT, PUNE