DCIT, Circle-1(3), Hyd, Hyderabad V. A V Gurava Reddy, Hyd, Hyderabad

MA 55/HYD/2016

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5410 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 08-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U MINICHANDRAN
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Search and seizure
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER M.A. NO. 55/HYD/2016 (ARISING OUT OF ITA NO. 1119/HYD/2014) ASSESSMENT YEAR: 2007-08 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(3), HYDERABAD VS SHRI A.V. GURAVA REDDY, HYDERABAD [PAN: ADDPA6981E] (APPLICANT) (RESPONDENT) FOR REVENUE : SMT. U. MINICHANDRAN, DR FOR ASSESSEE : SHRI S. RAMA RAO, AR DATE OF HEARING : 27-01-2017 DATE OF PRONOUNCEMENT : 08-02-2017 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS A MISCELLANEOUS APPLICATION FILED BY REVEN UE AGAINST THE COMMON ORDER OF THE ITAT IN ITA NO. 1119/HYD/2014 FOR AY. 2007-08 AND ITA NO. 1120/HYD/2014 FOR AY. 2008-09, CONFIRMING THE ORDERS OF THE LD.CIT(A) DELETING THE PENALTIES. RE VENUE RAISED THE MISCELLANEOUS APPLICATION FOR AY. 2007-08 AS UND ER: IN THIS CASE, FOR AY.2007-08, THE APPEAL OF THE ASS ESSEE WAS ADMITTED BY HON'BLE ITAT IN APPEAL NO.1119/HYD/2014 . SUBSEQUENTLY, HON'BLE ITAT VIDE COMBINED ORDER DATED 06.01.2016 D ECIDED THE APPEALS FOR A.YRS.2007-08 & 2008-09 IN ITA NOS.1119 & 1120/ HYD/2014. IN THIS CASE, THE ASSESSEE DISCLOSED A SUM OF RS.25,50,000/ - AS DIFFERENCE IN COST OF CONSTRUCTION FOR AY.2007-08 BUT DURING ASSESSMEN T PROCEEDINGS, IN 2 M.A. NO. 55/HYD/2016 RESPONSE TO SHOW CAUSE NOTICE ISSUED BY AO, FILED R EVISED RETURNS OF INCOME FOR AY.2004-05 TO 2008-09 ADMITTING ADDITION AL AMOUNTS RELATING TO COST OF CONSTRUCTION AND REDUCED THE SAME FROM A Y.2007-08. ACCORDINGLY AO ASSESSED LOWER TOTAL INCOME THAN THE RETURNED INCOME. IN RESPECT OF UNEXPLAINED INVESTMENT IN THE PROPERTY O F RS.45 LAKHS, THE ASSESSEE REITERATED THAT THIS RELATED TO AY.2007-08 AND NO REVISED COMPUTATION OF INCOME WAS FILED AS HE DID IN RESPEC T OF COST OF CONSTRUCTION. THE HON'BLE ITAT ERRED IN UPHOLDING T HE DECISION OF THE LD.CIT(A) IN DELETING THE PENALTIES LEVIED BY THE A O AS THE ASSESSEE DID NOT HAVE A CONSISTENT APPROACH AT EACH APPELLATE ST AGE. THE INCRIMINATING MATERIAL UNEARTHED ESTABLISHED THE CONCEALED INCOME OF ASSESSEE IN ACQUIRING PROPERTY. THE SAME HAS BEEN ACCEPTED AND ASSESSEE FILED RETURN OF INCOME. TAKING ALTERNATE PLEAS AT VARIOUS LEVELS OF PROCEEDINGS WHEN SUCH AN ISSUE WAS NEVER RAISED BEFORE THE AO WAS NO T CONSIDERED BY THE ITAT AT ALL. OTHERWISE THE AO COULD HAVE MADE ADDIT IONS IN THE EARLIER YEARS. 2. THE FACTS LEADING TO THE PRESENT MISCELLANEOUS APPL ICATION ARE THAT THERE WERE SEARCH AND SEIZURE OPERATIONS IN THE CASE OF ASSESSEE. HE FILED RETURN OF INCOME DECLARING INCOM E RS. 1,56,15,550/- AND CONSEQUENT TO THE SEARCH AND SEIZURE OPERATIONS CONDUCTED ON 20-08-2009, ASSESSEE ADMITTED AN INCOME OF RS. 2,31,62,130/-, THEREBY ADMITTING ADDITIONAL INC OME OF RS. 75 LAKHS FOR THE AY. 2007-08. HOWEVER, IN THE ASSESSME NT THE AO HAS QUANTIFIED AN AMOUNT OF RS. 45 LAKHS, BASED ON CERTAI N SALE DEEDS IMPOUNDED, AS UNEXPLAINED INVESTMENT FOR AY. 2007-0 8. AO FINALLY ASSESSED THE TAXABLE INCOME AT RS. 2,12,57,442 /- AS AGAINST THE RETURNED INCOME OF RS. 2,31,62,130/-. IN THE PENA LTY PROCEEDINGS, THE AO CONSIDERED THE AMOUNT OF RS. 45 LA KHS FOR LEVY OF PENALTY U/S. 271(1)(C) AND IMPOSED THE PENAL TY. LD. CIT(A) NOTICING THAT AO ASSESSED LESS THAN THE INCOME ADMITTED A ND ALSO ON THE REASON THAT THE SAID INVESTMENTS WERE MADE IN EAR LIER ASSESSMENT YEARS, DELETED THE PENALTY. HE ALSO NOTED THAT IF AT ALL PENALTY HAS TO BE LEVIED IN RESPECT OF THE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS, IT HAS TO BE DON E IN THE YEAR OF 3 M.A. NO. 55/HYD/2016 MAKING THE INVESTMENT AND NOT IN THE YEAR OF REGISTRATI ON OF THE PROPERTY OR ADMISSION OF INCOME BY THE APPELLANT. IT IS NOT IN SPIRIT OF EXPLANATION 5A OF SECTION 271(1)(C) OF THE ACT. MER E ADMISSION OF INCOME DOES NOT JUSTIFY PENALTY MORE SO AND THE AL LEGED INVESTMENT IN THE PROPERTY WAS MADE OUT OF THE DISCLOSED/UNDISCLOSED INCOME IN THE EARLIER YEARS AN D NOT IN THE YEAR UNDER CONSIDERATION. THIS OPINION OF THE LD. CIT (A) WAS UPHELD BY THE ITAT AS NO OTHER EVIDENCE WAS BROUGHT O N RECORD TO DISTURB THE FINDINGS OF THE LD. CIT(A). THE REVENUE H AS NOW PREFERRED A MISCELLANEOUS APPLICATION AS RAISED ABO VE. 3. LD. DR REITERATED THE SUBMISSIONS MADE IN THE MIS CELLANEOUS APPLICATION, WHEREAS LD. COUNSEL OBJECTED TO STATE THAT IN THE GUISE OF MISCELLANEOUS APPLICATION, AO NOW WANTS TO REVIEW THE ASSESSMENT COMPLETED ALREADY AND NOT THE PENALTY REFE RRED TO IN THE APPEAL. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE RECORD. IN FACT THE CONTENTIONS OF THE AO MAY BE RELEVA NT FOR COMPLETION OF ASSESSMENT BUT NOT FOR CONSIDERING THE PE NALTY U/S. 271(1)(C), WHICH WAS LEVIED AFTER CONCLUSION OF ASS ESSMENT. IT IS A FACT THAT AO BROUGHT TO TAX AN AMOUNT OF RS. 45 LAKHS, OUT OF RS. 75 LAKHS ADMITTED IN RETURN OF INCOME. IT IS ALSO A FA CT THAT THIS AMOUNT WAS PERTAINING TO INVESTMENTS MADE IN EARLIER YEA RS, BUT BROUGHT TO TAX BASED ON THE REGISTRATION OF DOCUMENTS IN TH E IMPUGNED YEAR. AO COULD HAVE VERY WELL CONSIDERED TH E INVESTMENTS IN THE YEAR OF PAYMENTS/ INVESTMENTS BUT HE CH OSE TO BRING IT TO TAX IN AY. 2007-08. IT IS ALSO FACT THAT ASSES SEE ADMITTED MORE INCOME IN THE PROCEEDINGS U/S. 153A THAN THAT WAS ASSESSED 4 M.A. NO. 55/HYD/2016 BY THE AO. FOR THESE REASONS, LD. CIT(A) FELT THAT THERE IS NO SCOPE FOR LEVY OF PENALTY, MORE SO CONCEALMENT PENALTY AS STATED ABOVE. AS NO CONTRARY INFORMATION WAS FILED ON RECORD TO CONT ROVERT THE FINDINGS OF THE CIT(A), ITAT AFFIRMED THE FINDINGS O F THE LD. CIT(A) IN THE REVENUE APPEAL SO FILED. THE MISCELLANEOUS AP PLICATION PREFERRED BY THE AO, AS APPROVED BY THE LD.PR.CIT (CE NTRAL) HYDERABAD, HAS NO RELEVANCE AT ALL FOR THE PENALTY PR OCEEDINGS DECIDED IN THE IMPUGNED APPELLATE ORDER. IN VIEW OF THAT, WE DISMISS THE MISCELLANEOUS APPLICATION AS NOT MAINTAINA BLE. THERE IS NO ORDER AS TO THE COSTS. 5. IN THE RESULT, MISCELLANEOUS APPLICATION IS DISMISS ED. PRONOUNCED IN THE OPEN COURT ON 8 TH FEBRUARY, 2017 SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 8 TH FEBRUARY, 2017 TNMM COPY TO : 1. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCL E-1(3), HYDERABAD. 2. SHRI A.V. GURAVA REDDY, # 4-C, PHASE-II, ROAD NO . 12, FILM NAGAR, JUBILEE HILLS, HYDERABAD. 3. CIT (APPEALS)-1, HYDERABAD. 4. CIT(CENTRAL), HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.