Itta/385/2013 Of The Commissioner Of Income Tax-Ii v. M/S.grand Ville Realtors (P) Ltd

IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE SRI JUSTICE K.C. BHANU INCOME TAX APPELLATE TRIBUNAL APPEAL NO.385 OF 2013 DATED:30.8.2013 Between: The Commissioner of Income Tax-IIHyderabad … Appellant And M/s. Grand Ville Realtors (P) Ltd.,6-3-1186/7/2, Near Hotel Grand KakatiyaBegumpetHyderabad … Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE SRI JUSTICE K.C. BHANU I.T.T.A. NO.385 OF 2013 JUDGMENT:(per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) We have heard the learned counsel appearing for the appellantand gone through the judgment and order of the learned Tribunal. This appeal is sought to be admitted on the following suggested questions of law: (A)“Whether, on the facts and in the circumstances of case, theITAT is justified in deleting the penalty levied u/s.271(1)(c) of theIncome Tax Act, by holding that the assessments wereestimated ones – thereby ignoring the material facts ofincriminating evidence seized during the search?ITAT is justified in deleting the penalty levied u/s.271(1)(c) of theIncome Tax Act, by holding that the assessments wereestimated ones – thereby ignoring the material facts ofincriminating evidence seized during the search? (B)Whether, on the facts and in the circumstances of case, theITAT is justified in ignoring the landmark judgments of the ApexCourt in the case of K.P. Madhusudhanan (251 ITR 99) andDharmendra Textiles (306 ITR 277) which judgments wouldsupport and warrant the levy of penalty u/s.271(1)(C) in respectof all assessment years involved?ITAT is justified in ignoring the landmark judgments of the ApexCourt in the case of K.P. Madhusudhanan (251 ITR 99) andDharmendra Textiles (306 ITR 277) which judgments wouldsupport and warrant the levy of penalty u/s.271(1)(C) in respectof all assessment years involved? (C)Whether, on the facts and in the circumstances of case, theITAT is justified in ignoring the material fact that the estimatedassessments were based on documents, loose sheets viz.Annexure A/GVC/BPT/2, A/GVC/BPT/28, A/YRR/2, 4 & 5 andA/SVKR/2 seized in the course of search operation U/s.132 ofthe Income Tax Act?ITAT is justified in ignoring the material fact that the estimatedassessments were based on documents, loose sheets viz.Annexure A/GVC/BPT/2, A/GVC/BPT/28, A/YRR/2, 4 & 5 andA/SVKR/2 seized in the course of search operation U/s.132 ofthe Income Tax Act? (D)Whether, on the facts and in the circumstances of case, theITAT is justified in ignoring the material fact that the assesseehad disclosed Rs.2.80 crores on account of various seizedmaterials viz. Annexure A/GVC/BPT/2, A/GVC/BPT/28,A/YRR/2, 4 & 5 and A/SVKR/2?ITAT is justified in ignoring the material fact that the assesseehad disclosed Rs.2.80 crores on account of various seizedmaterials viz. Annexure A/GVC/BPT/2, A/GVC/BPT/28,A/YRR/2, 4 & 5 and A/SVKR/2? (E)Whether, on the facts and in the circumstances of case, theITAT is justified in ignoring the material fact that the assesseehad not disputed the post-search assessments for theassessment years 2001-02 to 2007-08?ITAT is justified in ignoring the material fact that the assesseehad not disputed the post-search assessments for theassessment years 2001-02 to 2007-08? (E)Whether, on the facts and in the circumstances of case, theITAT is justified in ignoring the material fact that the assesseehad not disputed the post-search assessments for theassessment years 2001-02 to 2007-08?ITAT is justified in ignoring the material fact that the assesseehad not disputed the post-search assessments for theassessment years 2001-02 to 2007-08? (F)Whether, on the facts and in the circumstance of case, the ITATis justified in holding that the assessee had not disputed theassessment with a view to maintain good relation with theDepartment – when the Hon’ble Supreme Court had categoricallyheld in K.P. Madhusudhanan (251 ITR 99) that an assessee’sconsent to addition to buy peace was no longer validly applicableplea subsequent to the introduction of Explanation to Section271(1)(c)?is justified in holding that the assessee had not disputed theassessment with a view to maintain good relation with theDepartment – when the Hon’ble Supreme Court had categoricallyheld in K.P. Madhusudhanan (251 ITR 99) that an assessee’sconsent to addition to buy peace was no longer validly applicableplea subsequent to the introduction of Explanation to Section271(1)(c)? (G)Whether, on the facts and in the circumstance of case, the ITATis justified in holding that estimated assessment would notautomatically lead to conclusion of commission of fraud,gross/wilful neglect on part of the assessee, thereby importingmens rea into consideration, which is contrary to the decision ofHon’ble Supreme Court in the case of Dharmendra Textiles 306ITR 277?”is justified in holding that estimated assessment would notautomatically lead to conclusion of commission of fraud,gross/wilful neglect on part of the assessee, thereby importingmens rea into consideration, which is contrary to the decision ofHon’ble Supreme Court in the case of Dharmendra Textiles 306ITR 277?” It appears, the learned Tribunal has not upheld the initiation ofthe penalty proceedings. The learned Tribunal found that theAssessing Officer has not accepted the books of account and come toan estimated profit. When there is an estimation of profit, we are of theview, as correctly held by the learned Tribunal, there is no scope forconcealment of income or furnishing inaccurate particulars of income. Under the circumstances, the learned Tribunal, on fact, found thatthere was no justification to initiate penalty proceedings. Accordingly, we dismiss this appeal. There will be no order asto costs. ________________________ K.J. SENGUPTA, CJ ______________________ K.C. BHANU, J 30.8.2013 bnr