AJAY CHOPRA,DELHI V. .ACIT, NEW DELHI

ITA 994/DEL/2024

AI Insights

The case involves an appeal by Shri Ajay Chopra against the penalty imposed by the Assessing Officer for allegedly receiving cash in violation of Section 269SS of the Income Tax Act during the sale of ancestral property. The property, a joint family asset, was sold to Mr. Iqbal Javed, who had been in possession since 2007. The sale deeds were registered in 2015 and 2016, respectively, for compliance with stamp duty regulations. The Assessing Officer and CIT(A) upheld the penalty, believing cash was received, but the Tribunal found no evidence supporting this claim and reversed the decision.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 33601 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIPUL KASHYAP
• Assessee Lawyers: B.B. BHAGAT
• Keywords: Principle of natural justice
• Section: 271D

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘A’ BENCH, NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 994/DEL/2024 [A.Y 2017-18] Shri Ajay Chopra Vs. The A.C.I.T H-1/a, Hauz Khas, New Delhi New Delhi PAN – AAGPC 6379 Q (Applicant) (Respondent) Assessee By : Shri B.B. Bhagat, Adv Department By : Shri Vipul Kashyap, Sr. DR Date of Hearing : 29.10.2024 Date of Pronouncement : 18.12.2024 ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:- This appeal by the assessee is preferred against the order of the NFAC, Delhi (herein referred as CIT(A)) dated 12.01.2024 pertaining to A.Y 2017-18. 2 2. The assessee has raised the following grounds of appeal: “1. That on the facts and circumstances of the case, the Assessing Officer has erred in imposing penalty under Section 271D of the Income Tax Act, 1961 without appreciating the facts of the case. 2. The addition is based on submissions and conjectures that cash of Rs. 33,80,000/- has been received by the Appellant although there is not a single iota of evidence of the same. 3. The Assessing Officer was not justified in ignoring the submissions of the Appellant which involved ancestral Joint Family Property. 4. That on the facts and circumstances of the case and the provisions of law, the Assessing Officer has failed to appreciate that the order levying penalty passed by the Assessing Officer u/s 271D is illegal, bad in law and wrong on facts. 5. That the Assessing Officer has failed to appreciate that impugned penalty order passed by the Assessing Officer is against the principles of natural justice. That the Appellant craves the leave to amend and substitute or withdraw any or all grounds of appeal before or at the time of hearing of Appeal.\" 3. From a perusal of the above grounds it is seen that all the grounds of appeal are against imposition of penalty of Rs.33,80,000/- u/s 271D of the Act for violation of provisions of Section 269SS of the Act. 3 4. Briefly stated the facts of the case are that information in this case was received from DIT (I &CI) for A.Y.2017-18 relevant to F.Y. 2016-17 that the assessee had made transactions for sale of immovable property vide registered sale deed No.7874 dated 30.08.2016 and the assessee had accepted cash amounting to Rs. 33,80,000/- in contravention of provisions of section 269SS, thereby attracting penalty u/s 271D of the IT Act, 1961. 5. It was submitted by the assessee before the Assessing Officer that the property located at 2743 to 2746 situated at Kucha Chelian, Darya Ganj, New Delhi is a joint family property bought by 5 brothers in 1986. The property was sold by virtue of verbal agreement with Vendee Mr Iqbal Javed and the vendee is in possession of the property since 2007. It was submitted that the present sales deed was registered at the current market value of Rs.1,69,00,000/- attributable into 5 portion as Rs 33,80,000/- for the purpose of complying with the payment of stamp duty for the circle rate applicable. The assessee has not accepted to have received cash of Rs.33,80,000/- as part of sale consideration on sale of inheritance share of the assessee in the property located at 2743 to 2746 situated at Kucha Chelian, Darya Ganj, New Delhi. The assessing officer however, did not accept the 4 contention of the assessee and held that the assessee accepted the sale consideration of Rs 33,80,000/-on sale of property in cash and levied penalty u/s 271D. 6. Being aggrieved by the said order passed by the Assessing Officer, the assessee went in appeal before the ld. CIT(A). who confirmed the penalty u/s section 271-D and of the Act. Aggrieved the assessee is before us. 7. The ld AR of the assessee argued that the assessee is the son of one of the brothers Late Shri Satya Pal Chopra. The ld. counsel for the assessee further stated that Mr. Satya Pal Chopra expired on 20th April, 1991 without testamentation. Hence, Mrs. Usha Chopra, wife of S.P. Chopra become legal heirs of S.P. Chopra. Mrs. Usha Chopra expired before the registration of present sales deed dated 29.08.2016 in question. 8. The ld AR produced the copy of sale deed dated 18.11.2015 between heirs of the other four brothers and the vendee Mr Javed Iqbal to show that the said property was in possession of the vendee since 2007 but the sale deed could not be registered due to some 5 domestic reason. The ld AR drew our attention to the sale deed dated 29.08.2016 between the assessee as heir of the fifth brother and the vendee Mr Javed Iqbal to show that the said property was in possession of the vendee since 2007 but the sale deed could not be registered due to some domestic reason. 9. It is the say of the ld AR that the present sales deed dated 29.08.2016 was registered at the current market value of Rs. 1,69,00,000/- attributable into 5 portion at Rs 33,80,000/- for the purpose of complying with the payment of stamp duty for the circle rate applicable, whereas no such amount was received or paid amongst vendor or vendee. 10. The ld AR submitted that the original sales price was settled since 2007 much before the execution of registration of such sale of property in August 2016. The sale deed was symbolic and was executed merely for transfer of ownership rights in the property to the vendee. This is evident from clause No. 3 of the sale deed. The assessee has not received documents related to original deed and or any further agreement to sell etc, from the senior members of the family, so that the assessee can co-relate and substantiate facts and 6 figures in support of his contention that he has not received any cash payments of Rs. 33,80,000/- and or any other payment whatsoever. 11. The ld AR of the assessee further submitted that he has not received any cash amount from the vendee either at the time of registering the sale deed or any time before or after the date. The assessee also submitted the bank statement of his savings bank account maintained with the SBI, Hauz Khas, New Delhi. The ld AR stated that on scrutiny of this bank statement no cash receipts or any other receipts were received from the vendee. It is vehemently argued that there is not even a whisper of cash word in the sale deed. 12. It is the say of the ld AR that this explanation of the assessee was not found tenable by the CIT(A) who held that the sales deed dated 30.08.2016 is different to the sale deed dated 18.11.2015 and refers to different transaction and confirmed penalty of Rs.33,80,000/- u/s 271D of the Act for violation of section 269SS. 13. We have heard the rival submissions and have perused the relevant material on record. We are of the view that the CIT(A) has misinterpreted the two Sale deeds. Both the sale deeds pertain to the 7 same property located at 2743 to 2746 situated at Kucha Chelian, Darya Ganj, New Delhi and are to read in conjunction. This property was a joint family property bought by 5 brothers in 1986. The property was sold by virtue of verbal agreement to the Vendee Mr Iqbal Javed who got the possession of the property in 2007. The said sale was not registered earlier due to family reasons, the same was being registered in 2015 and 2016. 14. From the reading of the both the sale deeds dated 18.11.2015 and 29.08.2016, it is apparent that the deeds are drawn for registration and payment of stamp duty purpose for the same property. The registration vide sale deed 18.11.2015 was between the heirs of the four brothers and vendee while the registration vide 29.08.2016 was between the assessee i.e., heir of the fifth brother and the vendee. Further, the sale deed dated 29.08.2016 refers to the deed dated 18.11.2015. For the purposes of stamp duty, the current market value of the property was determined at Rs.1,69,00,000/- and attributed to 5 heirs in equal proportion of Rs 33,80,000/-. 8 15. We also find that the sale deed dated 29.08.2016 executed between the assessee and the Vendee nowhere mentions that the assessee has received Rs 33,80,000/- in cash or otherwise in AY 2017- 18. It only mentions that the market value to the extent of 1/5th share of the assessee in the said property comes to Rs 33,80,000/- for stamp duty. The document also mentions that the property was in possession of the Vendee since 2007 and the sale was not registered due to some domestic reasons. The deed also mentions that the assessee has received all the sale proceeds. Though the exact dates when sale consideration was paid to the owners/assessee, is not explicitly written in the sale document, it is highly improbable that sales consideration for a property, whose possession was given to the vendee in 2007, would remain pending till 2016. We are therefore, of the considered view that the said sale deed was symbolic and for transfer of ownership rights in the property to the vendee. The deed was drawn only for the purpose of Registration of the property and the amount of Rs 33,80,000/- is only the market value of the assessee share in the said property for the purpose of payment of stamp duty. We do not find any evidence of receipt of cash of Rs 33,80,000/- by the assessee for invocation of penalty under the provisions of section 271D. We 9 accordingly reverse the decision of the CIT(A) and direct the AO to delete the penalty of Rs 33,80,000/-. 16. In the result, the appeal of the assessee in ITA No. 994/DEL/2024 is allowed. The order is pronounced in the open court on 18.12.2024. Sd/- Sd/- [VIKAS AWASTHY] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 18th DECEMBER, 2024. VL/ Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi 10 Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr.PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr.PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order "