R.Rajakumar, Chennai vs Assessee

IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, CHENNAI ी ए. मोहन अलंकामणी, लेखा सद य एवं ी वी. दग ु ा# राव, या$यक सद य केसम%

BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER

आयकर अपील सं./ITA No.1548/Mds/2013 $नधा#रण वष# /Assessment Year : 2008-09

Shri P. Rajakumar, The Assistant Commissioner of No.32, Poonamalee High Road, v. Income Tax, Koyambedu, Chennai - 600 107. Business Circle IV, Chennai - 600 034. PAN : ADVPR 3444 H (अपीलाथ*/Appellant) (+,यथ*/Respondent)

अपीलाथ* क- ओर से/Appellant by : Shri P. Ranga Ramanujam, CA +,यथ* क- ओर से/Respondent by : Shri P. Radhakrishnan, JCIT

सन ु वाई क- तार ख/Date of Hearing : 18.02.2015 घोषणा क- तार ख/Date of Pronouncement: 25.02.2015

आदे श /O R D E R

PER V. DURGA RAO, JUDICIAL MEMBER:

This appeal filed by the assessee is directed against the

order of the Commissioner of Income Tax (Appeals)-VIII, Chennai,

dated 12.04.2013 relevant to the assessment year 2008-09. 2 I.T.A. No. 1548/Mds/2013

2. Facts in brief are that the assessee is a dealer in tiles and

marbles. The assessee had filed a return of income for the

assessment year under consideration by declaring a total income of

` 9,54,933/-. The return filed by the assessee was processed under

Section 143(1) of the Income-tax Act, 1961 (in short 'the Act').

Thereafter the assessment was completed under Section 143(3) of

the Act. In the assessment order the A.O. has observed that the

assessee is conducting a business in the name and style of (1)

"M/s Rajan Homes" (the business of promotion of flats) and (2) "M/s

Rajan Tiles" (doing business as dealer in tiles and marbles). In

respect of M/s Rajan Homes, the A.O. has found that there was

difference between the actual sale value of flats sold and admitted

sale value as per documents, which is mentioned in the annexure-1

of a letter of the assessee dated 18.12.2010. The admitted sale

value of flats sold is obtained from the same annexure and it refers

to the sale value as per books of account. The difference in the

sale value of flats is ` 5,44,500/-. In respect of M/s Rajan Tiles,

there is a difference between the actual bank balance in the account

maintained with Karnataka Bank, as per the bank statement, and

the bank balance shown by the assessee in the balance sheet. On

both these counts, the A.O. made verification. Subsequently, the

A.O. has initiated penalty proceedings by issuing notice under 3 I.T.A. No. 1548/Mds/2013 Section 274 read with Section 271(1)(c) of the Act calling

explanation from the assessee.

3. The assessee has submitted before the A.O., during the

course of penalty proceedings, that the reason for difference

between the actual sale value of the flats sold and admitted sale

value of the same flats is that the cash receipt of ` 5,44,500/- was

inadvertently omitted to be recorded by the Accountant as the copy

of the sale document was not available at the time of finalization of

accounts. The cash receipt information was also not available. In

respect of the difference between the actual bank balance in

Karnataka Bank as per the bank statement and the bank balance

shown by the assessee, the assessee admitted his inability due to

the absence of particulars. The assessee further submitted that he

has no intention or wilful omission to conceal any income. The

mistake committed by him was inadvertent mistake. However, the

A.O. was not agreeing with the explanation offered by the assessee

and levied penalty under Section 271(1)(c) of the Act.

4. On being aggrieved, the assessee carried the matter in

appeal before the Ld. CIT(Appeals) where the Ld. CIT(Appeals)

confirmed the order of the A.O. 4 I.T.A. No. 1548/Mds/2013

5. On being aggrieved, the assessee carried the matter in

appeal before the Tribunal. The Ld.counsel for the assessee

submitted that the difference between the actual sale value of flats

sold and admitted sale value of flats was inadvertently omitted to be

recorded by the Accountant because the copy of the sale document

was not available at the time of finalization of the accounts. It is

only an inadvertent mistake. The copies of the sale deeds were

purchased before the A.O. Based on these copies filed by the

assessee only the A.O. came to a conclusion that there is a

difference of amounts. In sofar as bank balance in the Karnataka

Bank and bank balance shown by the assessee in the absence of

particulars, there is a minor difference.

6. On the other hand, the Ld. D.R. strongly supported the

orders of the authorities below.

7. We have heard both sides and perused the records and

gone through the orders of the authorities below. After considering

the entire facts and circumstances of the case, we find that it is not

a fit case to levy penalty under Section 271(1)(c) of the Act. Even it

is not the case of the A.O. that the explanation given by the

assessee is false. The A.O. simply rejected the explanation and 5 I.T.A. No. 1548/Mds/2013

invoked the provisions of Section 271(1)(c) of the Act. We,

therefore, cancel the penalty and allow the appeal of the assessee.

8. In the result, the appeal filed by the assessee is allowed.

Order pronounced on Wednesday, the 25th of February,

2015 at Chennai.

Sd/- sd/- (ए. मोहन अलंकामणी) (वी. दग ु ा# राव) (A. Mohan Alankamony) (V. Durga Rao) लेखा सद य/Accountant Member या$यक सद य/Judicial Member

चे नई/Chennai, th =दनांक/Dated, the 25 February, 2015.

Kri.

आदे श क- +$त?ल@प अAे@षत/Copy to: 1. अपीलाथ*/Appellant 2. +,यथ*/Respondent

3. आयकर आयुBत (अपील)/CIT(A)-VIII, Chennai

4. आयकर आयुBत/CIT-VI, Chennai-34

5. @वभागीय +$त$न ध/DR

6. गाड# फाईल/GF.