TMI Blog2015 (7) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... me disclosed by the assessee as non agricultural income on estimation basis. - Decided in favour of assessee. Addition in respect of unexplained bank deposits - Levy of penalty - Held that:- Any amount deposited in bank account of the assessee, the assessee has to explain the source from which it was deposited. In the present case, the assessee is not able to explain the deposits. According to the assessee, the assessee is not educated and return subsequent to the search was filed by a Chartered Accountant who obviously has not made out a proper disclosure. The intention of the assessee was to make a proper disclosure, come out clean and pay the taxes. However, it was submitted that it was only the mistake of the Chartered Accountant and not of the assessee in proper disclosure. Later the assessee accepted for the addition to purchase peace and to avoid prolonged litigation. In our opinion, this contention of the assessee is totally misconceived. It is the duty of the assessee to disclose truly and fully while filing the return of income. The assessee cannot shift his responsibility to its Chartered Accountant. Further the assessee stated it was ill advised by the Chartered Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee on 21.09.2005 and notice u/s.153A was issued. The assessee filed his returns of income pursuant to search, admitted income in addition to undisclosed income, income from agricultural lands of 12.13 acres owned by him for agricultural purpose only. The assessment was completed u/s.153 r.w.s. 143(3) of the Act by making the following additions:- 1. Agricultural income treated as undisclosed income. 2. Unexplained investment in bank/deposits in bank account. 3. Investment in Koilpatti land. 4. Income from House property. Aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) confirmed the additions made by the Assessing Officer. Against this, the assessee preferred an appeal before the Tribunal. The Tribunal vide its order dated 19.05.2010 in ITA No.384/Mds/2010 set aside the issue of agricultural income to the file of the Assessing Officer to redetermine agricultural income for the assessment years 2000-01 to 2006-07 based on the assessment order of assessment year 2007- 2008. Accordingly vide order u/s.153 r.w.s. 143(3) r.w.s. 254 of the Act disallowed 20% of agricultural income and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appeal before us for the assessment years 2000-01, 2001-02, 2002-03, 2003-04, 2004-05, 2005-06 and 2006-07 and against deletion of penalty, the Revenue is in appeal before us for the assessment years 2002-03 2004-05. 3. We have heard both the sides and perused the material on record. We discuss the issue assessment year wise:- ITA No.936/Mds/2014 for the assessment year 2000-2001. 4. Regarding levy of penalty in respect of treating income from agriculture as income from other sources. The ld. Authorised Representative for the assessee submitted that the Assessing Officer treated 20% of the total agricultural income as non agricultural income as there is no positive evidence to suggest that the assessee earned the same from any undisclosed source. Accordingly, the Authorised Representative for the assessee contended that penalty cannot be levied where the income is estimated. He relied on the judgment of Supreme Court in the case of CIT vs. Reliance Petro Products 322 ITR 158, wherein it was held that merely because the assessee claimed deduction of interest expenses it has not been accepted by the Revenue, penalty u/s.271(1)(c) of the Act is not attracted. Merely m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer considered the agricultural income of G1,84,550/- as non agricultural income as the assessee failed to furnish details with regard to extent of agricultural land, details of cultivation like documents in support of purchase of seeds, fertilizers, pesticides and proof for sale of agricultural produce. However, the assessee furnished details of land, nature of crops without further details which provoked the Assessing Officer to treat the agricultural income declared by the assessee at G1,84,550/- as income from other sources. Consequent to this, the Assessing Officer levied penalty u/s.271(1)(c) of the Act. In this year, while levying penalty the Assessing Officer has not estimated the agricultural income, the Assessing Officer treated entire agricultural income declared as G1,84,550/- for levy of penalty u/s.271(1)(c) of the Act. The assessee was not able to produce any evidence in support of the agricultural income. Whenever the assessee claimed any income exempted from tax, the assessee is liable to place necessary evidence to show that income in fact is exempted from tax. In this case, the assessee though declared an amount of G1,84,550/- as agricultural i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee s appeal in ITA No.937/Mds/2014 is allowed. 6 ITA No.938/Mds/2014, assessment year :2002-03. The assessee declared agricultural income of G2,60,420/-. The Assessing Officer treated 20% of G2,60,420/- i.e. G52,084/- as non agricultural income, consequent to assessment u/s.153A r.ws. 143(3) r.w.s 254 of the Act. As discussed in the earlier assessment year 2000-2001 in para 4 and 4.1(supra), penalty cannot be levied. We delete the penalty for the assessment year 2002-2003. In the result, the assessee s appeal in ITA No.938/Mds/2014 is allowed. 7. ITA No.954/Mds/2013, assessment year 2002-03. This appeal by Revenue, the Assessing Officer made an addition in respect of unexplained bank deposits of G9,60,000/- vide order dated 05.06.2008, and levied penalty of G2,67,396/-. During the course of search, it was found that the assessee has made deposits of above amount in the saving bank account no.1397 with Indian Overseas Bank, Santhome Branch, Chennai. The assessee was not able to explain the source of deposits. Hence it was treated as income of the assessee and levied penalty u/s.271(1) (c) of the Act. On appeal, the Commissioner of Income Tax (Appeals) deleted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d true disclosure of its income, it would have filed the return declaring an income inclusive of the amount which was surrendered later during the course of the assessment proceedings. Consequently, it was clear that the assessee had no intention to declare its true income. It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the source of payments made by it and to declare its true income in the return of income filed by it from year to year. The Assessing Officer had recorded a categorical finding that he was satisfied that the assessee had concealed the true particulars of income and was liable for penalty proceedings under section 271 read with section 274 of the Act. There was no illegality in the Department initiating penalty proceedings Hence, we are inclined to reverse the order of the Commissioner of Income Tax (Appeals) and restore the order of the Assessing Officer in levy of penalty u/s.271(1)(c) of the Act. 7.2 In the result, the appeal of the Revenue in ITA No.954/Mds/2013 is allowed. 8. ITA No.939/Mds/2014, assessment year: 2003-2004 The assessee declared agricultural income of G.4,11,350/-. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... para for the assessment year 2002-03. 10.1 In the result, the appeal of the Revenue in ITA No.955/Mds/2013 is allowed. 11 ITA No.941/Mds/2014, assessment year 2005-2006. In the assessment year 2005-2006, the Assessing Officer levied penalty in respect of the following discrepancies found during the course of assessment. (i) G4,45,350/- was treated as income from other sources instead of agricultural income has claimed by the assessee. (ii) Unexplained deposit in bank account of G9,65,000/- (iii) Deemed dividend of G10,00,000/-. It is to be noted that penalty in respect of unexplained bank deposit was passed by the Assessing Officer in separate order dated 16.06.2008. Further, in penalty order dated 30.03.2010, he levied penalty in respect of other two items at G4,83,541/- as tax was evaded. 11.1 In respect of agricultural income, addition was reduced to 20% of G4,45,350/-, i.e G89,070/- which is only on estimation basis consequent to order of the Tribunal for the assessment year 2007-08 and 2008-2009 (cited supra). In our opinion, since these facts are similar to the one already considered in assessment year 2000-01 in para 4 and 4.1 of this order, accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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