T.Prashanthreddy, Hyderabad V. ACIT, Hyderabad

ITA 1063/HYD/2010

• Counselvise Citation: [2011] 100 COUNSELVISE.COM (IT) 2180 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 02-08-2010

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NOS.1061 TO 1063 OF 2010 ASSESSMENT YEAR 2004-05, 2005-06 & 2006-07 SHRI T. PRASHANTH REDDY, HYDERABAD (PAN ABZPT 5776 E) VS THE ACIT, CIRCLE 4(1), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.V. RAGHURAM RESPONDENT BY : SHRI AMLAN TRIPATHY O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THESE THREE APPEALS PREFERRED BY THE ASSESSEE AR E DIRECTED AGAINST THE DIFFERENT ORDERS PASSED BY THE CIT(A) V, HYDERABAD AND PERTAINS TO ASSESSMENT YEARS 2004-05, 2005-06 & 200 6-07 WITH REGARD TO LEVY OF PENALTY U/S 271(1)(C ) OF THE ACT. 2. BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND FILED ITS RETURN OF INCOME ORIGINALLY AS FOLLOW S: ASSESSMENT YEARS DATE OF FILING AMOUNT OF INCOME DECLARED 1. 2004-05 28.9.04 RS.5,70,950 2. 2005-06 27.9.05 RS.7,91,562 RS.1,95,000 (AGRI INCOME) 3. 2006-07 21.7.06 RS.13,37,415 RS.2,36,500 (AGRI INCOME) ITA NOS.1061 TO 1063/H/2010 SHRI T. PRASHANTH REDDY, HYD. 2 2 3. THERE WAS A SURVEY CONDUCTED U/S 133A OF THE A CT IN THE PREMISES OF THE ASSESSEE ON 15.11.2006 AND ONE UNDI SCLOSED BANK ACCOUNT FOUND WHEREIN CERTAIN DEPOSITS HAS BEEN MA DE WHICH HAD ESCAPED FROM ASSESSMENT: THE TOTAL CASH DEPOSITS ON VARIOUS DATES DURING THE PERIOD FROM : 1. 16.2.04 TO 31.3.04 RS.31,24,326/- PEAK CASH DEPOSIT RS.18 LAKHS ON 27.2.04 2. 1.4.04 TO 31.3.2005 RS.1,24,35,740/- WITH PEAK CASH DEPOSIT RS.9 LAKHS ON 4.2.05 3. 1.4.2004 TO 31.3.2006 RS.32,86,852/- WITH PEAK CASH DEPOSIT RS.13 LAKHS ON 10.10.0 5 4. LATER A NOTICE WAS ISSUED U/S 148 WAS ISSUED A ND THE ASSESSMENT YEARS WERE REOPENED FOR THE ASSESSMENT Y EARS 2004-05 AND 2005-06. FOR THE ASSESSMENT YEARS 2004-05 THE ASSE SSEE FILED REVISED RETURN ON 11.12.2007 DECLARING INCOME AT RS.23,70,9 50/- AND ONCE AGAIN ON 27.12.07 FILED REVISED RETURN DECLARING INCOME A T RS.35,13,770/-. WHICH COVERS PEAK CASH DEPOSIT OF RS.18 LAKHS AND D IFFERENCE IN VALUATION IN THE CONSTRUCTION OF BUILDING AT MEGHA HILLS, GUT TALA VILLAGE, BEGUMPET. 5. FOR THE ASSESSMENT YEAR 2005-06, THE ASSESSEE FILED ORIGINAL RETURN ON 27.9.2005 ADMITTING INCOME OF RS.7,91,562 /- AND AGRICULTURAL INCOME OF RS.1.95 LAKHS. AFTER SURVEY, NOTICE U/S 148 WAS ISSUED ON 14.8.2007 THE ASSESSEE FILED REVISED RETURN ON 11. 12.2007 ADMITTING INCOME OF RS.30,20,120/- INCLUDING ADDITIONAL INCOM E OFFERED AT RS.22,68,560/- TOWARDS PEAK DEPOSIT IN BANK ACCOUNT AND DIFFERENCE TOWARDS COST OF CONSTRUCTION OF PROPERTY. AGAIN, ON 27.12.2007 FILED A REVISED RETURN ADMITTING INCOME OF RS.18,77,297/- A FTER APPORTIONING DIFFERENCE IN VALUATION BETWEEN THE ASSESSMENT YE AR 2004-05 AND 2005- 06. ITA NOS.1061 TO 1063/H/2010 SHRI T. PRASHANTH REDDY, HYD. 3 3 6. FOR THE ASSESSMENT YEAR 2006-07, THE ASSESSEE FILED RETURN OF INCOME ON 21.7.2006 AT RS.13,37,415/- AND AGRICULTU RAL INCOME OF RS.2,36,500/-. THERE IS NO NOTICE U/S 148 OF THE A CT. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT OF THESE ASSESSMENT YEARS AS FOLLOWS: ASSESSMENT YEAR 2004-05 INCOME ORIGINALLY ADMITTED RS.5,70,950 INCOME OFFERED VIDE RETURN ON 11.12.07 RS.18 LAKHS FURTHER ADDITIONAL INCOME VIDE RETURN DT. 27.12.03 RS.11,42,770 ADDITION MADE RELATING TO CLAIM OF A) LOAN FROM HUF FOR WANT OF EVIDENCE DISALLOWED RS.1,8 LAKHS B) TOWARDS LOW DRAWING RS.1 LAKH TOTAL INCOME RS.37,93,770 ASSESSMENT YEAR 2005-06 INCOME ORIGINALLY ADMITTED RS.7,91,562 INCOME OFFERED 11.12.2007 RS.9 LAKHS FURTHER ADDITIONAL INCOME OFFERED VIDE RETURN DT.27.12.07 RS.1,85,735 ADDITIONS MADE CLAIM OF LOAN RS.1.85 LAKHS LOW DRAWINGS RS.1 LAKHS TOTAL RS.21,62,300 ASSESSMENT YEAR 2006-07 INCOME FROM PROPERTY RS.13,37,415 ORIGINALLY ADMITTED ADDITIONS MADE U/S 68 RS.23.50 LAKHS ADDITIONS DISALLOWANCE OF EXPENSES RS.1.50 LAKHS LOW DRAWINGS RS.50,000 ITA NOS.1061 TO 1063/H/2010 SHRI T. PRASHANTH REDDY, HYD. 4 4 TOTAL RS.38,87,415 LESS DEDUCTION U/S 80C RS.1 LAKHS TOTAL RS.37,87,415 AGRICULTURAL INCOME RS.2.36 LAKHS 7. FURTHER, THE ASSESSING OFFICER LEVIED PENALTY IN ALL THESE ASSESSMENT YEARS FOR CONCEALING THE INCOME WITH REG ARD TO AMOUNT LYING IN THE BANK ACCOUNTS OF THE ASSESSEE AS FOLLOWS: 2004-05 RS.5,94,000/- 2005-06 RS.3,02,940/- 2006-07 RS.7,91,010/- 8. THE ASSESSEE CARRIED THE APPEAL TO THE CIT(A) WHO HAVE CONFIRMED THE ORDER OF THE ASSESSING OFFICER. AGAI NST THIS THE ASSESSEE IS IN APPEAL BEFORE US. 9. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A REAL ESTATE AGENT AND FACILITATING THE REAL ESTATE TRANSACTIONS AND THE ASSESSEE RECEIVES THE C ASH IN THE NORMAL COURSE OF ITS BUSINESS AND IN THE COURSE OF ITS BUS INESS, THE ASSESSEE ADVANCES AND DEPOSITS TO THE BANK. THE SAME WAS TR EATED AS INCOME. THE PEAK CREDIT OF THE BANK ACCOUNT HAS OFFERED AS INCO ME TO BUY PEACE. THE ASSESSEE RECEIVED THE ADVANCE FROM THE PROSPECTIVE CUSTOMERS TO FACILITATE THE TRANSACTIONS. HE SUBMITTED THAT THE ASSESSEE WAS CARRIED THE CASH TO NEGOTIATE DEAL IN ORDER NOT TO LOSE THE TRANSACTION S TO GET IT AT BETTER PRICE. SINCE KEEPING OF THE CASH ON HAND IS A VERY RISKY A FFAIR, THE ASSESSEE DEPOSITED THE CASH INTO THE BANK AND THE MONEY IS N OT BELONGING TO THE ASSESSEE. ITA NOS.1061 TO 1063/H/2010 SHRI T. PRASHANTH REDDY, HYD. 5 5 10. THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE RELIED ON THE ORDER OF THE TRIBUNAL DATED 31.8.2010 IN ITA NOS.17 7 TO 182, 567, 568 & 278 TO 283/H/2010 DR. T. RAVI KUMAR, NELLORE BS. ACIT, NELLORE WHEREIN IT WAS HELD AS FOLLOWS: 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT IN VIEW OF OUR DECISION IN THE ASSESSEE'S APPEALS FOR THESE VERY ASSESSMENT YEARS, HOLDING THAT NO PENALTY UNDER S.271(1)(C) WAS LEVI ABLE ON THE ASSESSEE IN THESE CASES, FOR THE REASONS DISCUSSED AT LENGTH I N PARA 5 OF THIS ORDER IN THAT CONTEXT, WE HOLD THAT THERE IS NO MERIT IN THE PRES ENT APPEALS PREFERRED BY THE REVENUE. EVEN OTHERWISE, THE CIT(A) HAS MERELY DIRE CTED THE ASSESSING OFFICER TO REDUCE THE QUANTUM OF PENALTIES IMPOSED TO THE AMOUNTS OF TAX SOUGHT TO BE EVADED AFTER GIVING EFFECT TO THE DIRE CTIONS OF THE TRIBUNAL IN THE QUANTUM APPEALS OF THE ASSESSEE. THERE IS NO MISTA KE WHATSOEVER IN THE ORDER OF THE CIT(A) IN GIVING DIRECTIONS TO GIVE E FFECT TO THE ORDER OF THE TRIBUNAL AND REDUCE THE QUANTUM OF PENALTIES. WE A CCORDINGLY HOLD THAT THE GROUNDS OF APPEAL PREFERRED BY THE REVENUE, BEING D EVOID OF MERIT, ARE LIABLE TO BE REJECTED. ACCORDINGLY THEY ARE REJECTED. 11. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE EXPLANATION GIVEN BY THE ASSESSE E IS VERY VAGUE. THE ASSESSEE CONCEALED THE BANK ACCOUNTS ONLY BECAUSE O F SURVEY ACTION, THE BANK ACCOUNTS CAME TO LIGHT AND THE ASSESSEE OFFERE D ADDITIONAL INCOME ONLY BECAUSE HE WAS CAUGHT BY THE DEPARTMENT. HAD THERE BEEN NO SURVEY, THE ASSESSEE WOULD HAVE VERY MUCH CONCEALED THE ACCOUNTS. FURTHER, THE EXPLANATION OF THE ASSESSEE IS THAT AN AMOUNT DEPOSITED IN THE BANKS IS OF VARIOUS CUSTOMERS. THE ASSESSEE NO T PRODUCED ANY CUSTOMERS OR ANY DOCUMENTS SUGGESTING THE MONEY DEP OSITED INTO BANK ACCOUNTS WAS BELONGED TO SOME OTHER PERSONS. 12. HE RELIED ON THE FOLLOWING CASE LAW: 1. JYOTI LAXMAN KONKAR VS. CIT (292 ITR 163) (BOM) 2. CIT VS. DKB & CO., (243 ITR 618) (KER.) 3. MAHAVIR METAL WORKS VS. CIT (92 ITR 512) (HAR.) 4. CIT VS. MRA ANSARI AND PN KHANNA JJ (98 ITR 462) (D EL.) 5. WESTERN AUTOMOBILES (I) VS. CIT (112 ITR 1048) (DEL .) ITA NOS.1061 TO 1063/H/2010 SHRI T. PRASHANTH REDDY, HYD. 6 6 6. CIT VS. K. SHIVASHANKAR BHAT & R. RAMAKRISHNA JJ (K AR.) 7. CIT VS. SUDARSHAN SILKS AND SAREES (253 ITR 145) (K AR.) 8. CIT VS. R. SADAYAPPAN (253 ITR 203) (MAD.) 9. PC JOSEPH & BROS. VS. CIT (KER.) (243 ITR 818) 10. CIT VS. KRISHNA & CO. (120 ITR 144) (MAD.) 11. POOL SINGH & CO. VS. CIT (98 ITR 564) (DEL.) 12. CIT VS. D R GUPTA & OTHERS (122 ITR 567) (RAJ.) 13. MIRZAPUR CONSTRUCTION CO. VS. CIT (122 ITR 828) (AL L) 14. UNION ENGINEERING CO. VS. CIT (122 719) (KER.) 15. ITO VS. LEELA MAMMEN (63 TTJ 252) (AT COCHIN) 16. JSWANT RAI & ANOTHER VS. CBDT & OTHERS (133 ITR 19) (DEL.) 17. CIT VS. GATES FOAM RUBBER CO (90 ITR 422 (KER.) 18. CIT VS. PB SHAH & CO. (113 ITR 587) (CAL.) 19. RATHNAM & CO. VS. IAC (124 ITR 376) ((MAD.) 20. ACIT VS. SN KANNAPPA AUTOMOBILES (P) LTD. (72 ITD 4 74) (AT BLR.) 21. M. SAJJANRAJ NAHAR VS. CIT (283 ITR 230) (MAD.) 22. G.C. AGGARWAL VS. CIT (ASSAM, NAGALAND ETC.) (186 I TR 571) 23. MOHD. FAROOQ VS. CIT & ANOTHER (230 ITR 855) (ALL) 24. KL SWAMY VS. CIT & ANOTHER (239 ITR 386) 25. CIT VS. INDIAN METALS AND FERRO ALLOYS LTD. (211 IT R 35 & 117 CTR 37) 26. K. SREEDHARAN & CO. VS. ACIT & ANOTHER (325 ITR 229 ) (KER.) 27. CIT VS. ZOOM COMMUNICATION P LTD. (327 ITR 510 (DEL .) 28. CIT VS. HARPARSHAD & COMPANY LTD. (328 ITR 53) (DEL .) 29. UNION OF INCOME & OTHERS VS. DHARMENDRA TEXTILES PR OCESSORS AND OTHERS (306 UTR 277) (S C) 30. INDUS ENGINEERING CO & ANOTHER VS. ACIT (IND.) & OT HERS (323 ITR 302) (BOM.) 31. P. RAJASWAMY VS. CIT (323 ITR 527) (KER.) 32. CIT VS. M.K. ALI ((323 ITR 529) (KER.) ITA NOS.1061 TO 1063/H/2010 SHRI T. PRASHANTH REDDY, HYD. 7 7 33. KAMAL BASJA VS. DCIT ( 316 ITR 58) (MDS.) 13. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E MATERIAL PLACED ON RECORD. THE QUESTION OF CONCEALMENT OF I NCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME FOR THE PURPOSE OF S.271(1)( C) OF THE ACT IS TO BE DETERMINED WITH REFERENCE TO THE ORIGINAL RET URN. EVEN IF THE INCOME IS SURRENDERED IN THE REVISED RETURN, THE ASSESSEE STILL HAS TO EXPLAIN WHY THE INCOME WAS NOT SHOWN AND WHY INACCURATE PARTICU LARS OF INCOME FURNISHED IN THE ORIGINAL RETURN. IN CASE OF BONA FIDE ERROR OR IN CASE OF TECHNICAL OR VENIAL BREACH OF STATUTORY PROVISIONS, THE ASSESSEE MIGHT NOT BE HELD GUILTY OF DEFAULT U/S 271(1)( C) OF THE ACT , WHEN FROM THE VERY BEGINNING, THE ASSESSEE HAS INTENTIONALLY CONCEALED INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME, THERE IS NO QUEST ION OF ASSESSEE ESCAPING PENALTY ON ACCOUNT OF FINING OF REVISED RETURN. BL AMEWORTHINESS ATTACHED TO THE ASSESSEE WITH REFERENCE TO THE ORIGINAL RETU RN CANNOT BE AVOIDED BY FILING REVISED RETURN AFTER CONCEALMENT WAS DETECTE D BY THE REVENUE AUTHORITIES. WHERE THE CONCEALMENT OF INCOME MADE IN THE ORIGINAL RETURN OR WHERE THE SURRENDER OF INCOME MADE WAS NOT VOLUN TARILY BUT WAS AS A RESULT OF DETECTION BY THE ASSESSING OFFICER, FILIN G OF REVISED RETURN IS OF NO CONSEQUENCE. SECTION 139(5) APPLIES TO THE LIMITED RECOURSES OF CASES WHERE IN THE ORIGINAL RETURN, THERE WAS ANY OMISSIO N OR ANY WRONG STATEMENT AND NOT TO CASES OF CONCEALMENT OR FALSE STATEMENT. IF A CASE DOES NOT FALL U/S 139(5) OF THE ACT, THE FACT THAT REVISED RETURN WAS FILED AFTER ANY INVESTIGATION WAS STARTED BY THE DEPARTME NT WILL BE OF NO CONSEQUENCE. IN THE PRESENT CASE, ADMITTEDLY THE A SSESSEE HAS NOT DISCLOSED THE IMPUGNED BANK ACCOUNTS WHERE THE HUGE AMOUNTS WERE LYING. THERE IS NO WHISPER ABOUT THESE BANK ACCOUN TS IN THE ORIGINAL RETURN. THE DEPARTMENT DETECTED THESE BANK ACCOUNT S AND THEREAFTER ISSUED NOTICE U/S 148 OF THE ACT THE ASSESSEE FILED THE RETURNS FOR THE TWO YEARS I.E. ASSESSMENT YEAR 2004-05 AND 2005 06. IN OUR OPINION, THE ITA NOS.1061 TO 1063/H/2010 SHRI T. PRASHANTH REDDY, HYD. 8 8 REVISED RETURN FILED BY THE ASSESSEE IS OF NO CONSE QUENCE FOR NOT LEVYING THE PENALTY AND THAT SURRENDER WAS MADE ON DETECTION OF THE BANK ACCOUNTS BY THE DEPARTMENT AND IT IS NOT VOLUNTARY DISCLOSUR E. ONLY BECAUSE THE ASSESSEE FILED A REVISED RETURN STATING THAT THE AS SESSEE OFFERED ADDITIONAL INCOME APPEARING IN THE BANK ACCOUNTS TO BUY PEACE OF MIND AND TO CLOSE LITIGATION WOULD NOT BE CONCLUSIVE AS IT WAS A DEMA ND MADE BY THE ASSESSEE ON ITS OWN FAVOUR. EVEN IF THE ASSESSEE H AS NOT OFFERED ADDITIONAL INCOME APPEARING IN THE BANK ACCOUNTS AS INCOME, IT IS NO DIFFERENCE AND THE DEPARTMENT IS AT LIBERTY TO TREAT THE AMOUNT IN THE BANK ACCOUNTS AS INCOME OF THE ASSESSEE ON ACCOUNT OF FAILURE OF THE ASSESSEE TO FILE THE DOCUMENTARY EVIDENCE TO EXPLAIN THE SOURCE OF SUCH DEPOSITS. FURTHER, SURRENDER OF ADDITIONAL INCOME WAS NOT MADE BY THE ASSESSEE ON THE CONDITION THAT NO PENALTY SHALL BE LEVIED AND THAT SURRENDER WAS ALSO NOT MADE AT THE INSTANCE OF THE ITO AND ALSO NOT ON VOL UNTARY BASIS AND THERE WAS NO ASSURANCE FROM THE DEPARTMENT FOR NOT LEVYIN G PENALTY. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT SUR RENDER MADE IN THE REVISED RETURN WAS SUBJECT TO CERTAIN CONDITIONS. THERE IS NO PROVISION TO MAKE A CONDITIONAL SURRENDER. AT ANY RATE, THE ASS ESSEE HAVING ADMITTED THE SO CALLED ADDITIONAL INCOME AS PART OF TOTAL IN COME, THE REVENUE HAD NOTHING FURTHER TO PROVE. THE REVENUE CAN RELY UPO N ASSESSEES ADMISSION. BUT, THE ASSESSEE IS AT LIBERTY TO SHOW THAT ACTUAL LY IT IS NOT AN INCOME EVEN AT PENALTY PROCEEDINGS. HOWEVER, IN THE PRESE NT CASE, NO MATERIAL WHATSOEVER HAS BEEN PLACED BEFORE THE LOWER AUTHORI TIES TO SHOW THAT THE ASSESSEE HAD ERRONEOUSLY MADE AN ADMISSION TO SHOW THE ADDITIONAL INCOME. IT IS NOT POSSIBLE TO HOLD IN EVERY CASE, MERE SURRENDER OF INCOME WILL FORECLOSE ANY ACTION FOR CONCEALMENT OF INCOME . THE CONTENTION OF THE ASSESSEE BEFORE US THE AMOUNT DEPOSITED IN THE BANK ACCOUNT BELONGS TO VARIOUS CUSTOMERS. HOWEVER, THE ASSESSEE NEITHER C OULD PROVIDE THE NAME OF THE CUSTOMERS NOR PRODUCED ANY AGREEMENT WITH AN Y CUSTOMER NOR ANY EVIDENCE TO SHOW THE SOURCE OF SUCH DEPOSITS. THERE IS A BURDEN CAST UPON ITA NOS.1061 TO 1063/H/2010 SHRI T. PRASHANTH REDDY, HYD. 9 9 THE ASSESSEE TO PROVE THAT THE DEPOSITS INDEED IS N OT THE INCOME OF THE ASSESSEE AND THIS BURDEN IS NOT DISCHARGED IN THIS CASE. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, IN THE INTERES T OF JUSTICE, IN OUR OPINION, IT IS APPROPRIATE TO GIVE ONE MORE OPPORTU NITY TO THE ASSESSEE TO EXPLAIN THE SOURCE OF DEPOSITS IN THE BANK ACCOUNTS . ACCORDINGLY, IF THE ASSESSEE SATISFACTORILY EXPLAIN THE NATURE AND SOUR CE OF DEPOSITS, THE PENALTY CANNOT BE LEVIED. 14. IN THE RESULT, ALL THE THREE APPEALS FILED B Y THE ASSESSEE IN ITA NOS.1061 TO 1063/H/2010 ARE ALLOWED FOR STATISTICA L PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT 13.1.2 011 SD/- SD/- G.C. GUPTA CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER DATED THE 13 TH JANUARY, 2011 COPY FORWARDED TO: 1. SHRI A.V. RAGHURAM, ADVOCATE, 610, 6 TH FLOOR, BASHEERBAGH, HYD.1. C/O SHRI T. PRASHANTH REDDY, 1-1-535/B1, BAKARAM, G ANDHI NAGAR, HYD. 2. THE ACIT, CIRCLE 4(1), HYDERABAD 3. CIT(A)-V, HYDERABAD. 4. CIT, HYDERABAD 5. THE D.R., ITAT, HYDERABAD. NP