KANNI UVARAJ,CHENNAI vs. DCIT, CHENNAI

This appeal by the assessee is directed against the order passed by the Ld. Commissioner of Income Tax (Appeals)-5, Chennai dated 29.09.2016 in for the assessment year 2013-14 passed u/s.250(6) r.w.s.271(1)(c) of the Act.

The assessee has raised several grounds in its appeal, however the crux of the issue is that the Ld.CIT(A) has erred in confirming the order of the Ld.A.O who had impose penalty of Rs.48,66,750/- U/s.271(1)(c) of the Act for concealing income and furnishing inaccurate particulars of income.

The brief facts of the case are that the assessee is an individual and Director of M/s.Poorvika Mobiles Pvt Ltd., filed his return of income on 30.07.2013 admitting total income of Rs.8,79,38,250/-. During the course of survey u/s.133A of the Act, in the case of M/s.Poorvika Mobiles Pvt Ltd., on 24.09.2013, the assessee has admitted an additional income of Rs.1,50,00,000/- for the relevant assessment year 2013-14 in his individual capacity. Thereafter, the assessee filed revised return on 28.02.2014 admitting an income as Rs.10.29,38,250/- wherein the sum of Rs.1,50,00,000/- was offered as additional income. The Ld. Assessing officer thereafter completed the assessment u/s.143(3) r.w.s.147 vide order dated 22.07.2015 assessing the total income of the assessee at Rs.10.29,40,990/-. In the penalty proceedings, the Ld. assessing officer treated the additional income offered by the assessee at the time of survey proceedings as a case of concealment of income, which would not have come to light but for the survey conducted on the assessee and ITA No.3141/Mds/2016 :- 3 -:

Before us, the ld. AR submitted that the assessee had admitted additional income of Rs.1.5 crores for the relevant assessment year only at the incidence of the Revenue in order to avoid protracted litigation and no material evidence was found. The ld. AR further argued that the ld. assessing officer had not even valued the residential building constructed by the spouse of the assessee, but simply coerced the assessee to admit the additional income. Hence, the addition was a forced addition and the assessee had agreed for the same in order to avoid litigation. Therefore, it was pleaded that the penalty levied by the Revenue may be deleted.

On the other hand, ld. DR relied on the orders of the Revenue Authorities and prayed for sustaining the same.

We have heard the rival submissions and carefully perused the materials available on record. From the facts of the case, it is apparent that the assessee has admitted the additional income in order to avoid confrontation with the Revenue. Further, it is apparent that the ld. assessing officer had intimidated the assessee in admitting the income by citing the residential building constructed by the assessee’s spouse. While doing so, the ld. assessing officer did not even value the residential building constructed by the assessee’s spouse, but simply estimated by surmises and conjectures. In similar circumstances, this Bench of the Tribunal in ITA No.1009/Mds./2016 in the case of M/s.Trisha Krishnan vide order dated 06.09.2016, as pointed out by the ld.AR, had held that in a situation where addition is made which is accepted by the assessee in order to avoid confrontation with the Revenue, then penalty cannot be valid. In the case of the assessee also, it appears that the assessee had agreed for the addition in order to avoid protracted litigation and avoid confrontation with the Revenue. Further, we are reminded of the decision of the Hon’ble Supreme Court in the case of Dilip N. Shroff’s reported in 291 ITR 519(SC), wherein it was held that only because the opinion of the registered valuer is not accepted or some other expert gives another opinion, is not by itself sufficient for arriving at a conclusion that the assessee had furnished inaccurate

In the result, the appeal of the assessee is allowed.