Sh. Shiv Kumar Kamboj, Shamli V. ITO, Shamli

ITA 1054/DEL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6646 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 08-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 20-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DANKANUNJNA
• Keywords: Sale consideration of property below Jantri Value; Date of conversion; Fair market value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SH. G.D. AGRAWAL V.P. A ND SH. C.M. GARG, J.M ITA NO. 1054/D EL / 20 15 ASSTT. YEAR: 2007 - 08 APPELLANT BY : NONE RESPONDENT BY: SH. P. DAN KANUNJNA SR. DR DATE OF FINAL HEARING : 08.12.2015 DATE OF PRONOUNCEMENT : 24. 02.2016 ORDER PER C.M. GARG, JM THIS APPEAL BY THE ASSESSEE HAS BEEN FILED AGAINST THE ORDE R OF THE COMMISSIONER OF THE INCOME TAX (APPEALS) MUZAFFARNAGAR DATED 01.12.2014 PASSED IN FIRST APPEAL NO. 176/13 - 14/MZR FOR A.Y. 2007 - 08. 1. THE MAIN GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS THAT THE CIT(A) HAS GROSSLY EARED IN LAW AND ON FACTS I N UPHOLDING THE PENALTY OF RS. 1,18,127/ - IMPOSED UNDER SECTION 271(1) (C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) 2. WHEN THE CASE WAS CALLED FOR HEARING NEITHER THE ASSESSEE NOR REPRESENTATIVE APPEARED BEFORE US. HOWEVER, AN APPLICATION FOR ADJO URNMENT HAS BEEN SUBMITTED BUT THE SAME WAS DISMISSED AS ON PERUSAL OF THE RECORD SHIV KUMAR KAMBOJ KAIRANA ROAD SHAMLI VS ITO WARD - I SHAMLI APPELLANT RESPONDENT PAN NO. ABFPK2584D WE FIND IT APPROPRIATE TO DECIDE THE APPEAL IN ABSENCE OF ASSESSEE APPELLANT AND AFTER HEARING THE LD DEPARTMENTAL REPRESENTATIVE (D.R.) AND WE PROCEEDED TO ADJUDICATE THE AP PEAL. 3. AS PER CONTENTION RAISED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW WE OBSERVED THAT THE ASSEESSE DEFENDED THE LEVY OF PENALTY BY SUBMITTING THAT THE INCORRECT PENALTY HAS BEEN IMPOSED ON ACCOUNT OF LONG TERMS CAPITAL GAIN ON THE CONVERSATION O F LAND INTO STOCK AND TRADE UNDER SECTION 50C OF THE ACT, WHICH CANNOT BE TREATED AS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AS PER THE PROVISION OF SECTION 271 (1) (C) OF THE ACT. IT IS ALSO CONTENDED BY THE ASSESSEE THAT T HE AUTHORITIES BELOW FILED TO APPRECIATE THAT IN THE ORIGINAL PROCEEDINGS U/S 143 (3) OF THE ACT THE ASSESSEE HIMSELF OFFERED THE DEEMING ESTIMATING VALUE AT RS. 1000 PER SQ. MTR. AGAINST THE VALUE CLAIMED AT RS. 125 PER SQ. MTR. SUBJECT NO PENAL ACTION TA KEN AGAINST HIM. IT WAS VEHEMENTLY CONTENDED BY THE ASSESSEE THAT THE ASSESSEE HAD NEITHER CONCEALED PARTI CULARS OF INCOME NOR HAD FILED IN ACCURATE PARTICULAR OF INCOME AND THE CIT(A) HAS FAILED TO APPRECIATE THAT THE ADDITIONS ARE MADE MERE ON DISALLOWAN CE OF EXPENSES/CLAIMS AND PENALTY PROCEEDINGS HAVE BEEN INITIATED WITHOUT ANY SPECIFIC CHARGES HENCE THE SAME ARE LIABLE TO BE SET ASIDE. 4. THE LD DR SUPPORTED THE PENALTY ORDER AND SUBMITTED THAT THE ASSESSEE HAS DELIBERATELY FURNISHED INACCURATE PARTIC ULARS OF HIS INCOME WITHIN THE MEANING OF EXPLANATION 1 (B) OF SECTION 271(1) (C) OF THE ACT BY NOT SHOWING THE ACCURATE PARTICULARS OF INCOME FROM SALE OF PROPERTY TO THE TUNE OF RS. 6,57,950/ - THEREFORE THE PENALTY WAS CORRECTLY AND RIGHTLY IMPOSED BY TH E AO AND THE SAME WAS UPHELD BY THE FIRST APPELLATE AUTHORITY BY PASSING A SPEAKING AND JUSTIFIED ORDER. 5. ON CAREFUL CONSIDERATION OF SUBMISSIONS OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW AND THE CONTENTIONS OF THE LD DR SUPPORTING THE PENALTY ORDE R AS WELL AS IMPUGNED ORDER UNDISPUTEDLY, IN THE QUANTUM ORDER PASSED UNDER SECTION 143 (3) OF THE ACT THE ASSESSEING OFFICER MADE AN ADDITION ON THE BASIS OF REVISE WORKING SUBMITTED BY THE ASSESSEE IN REGARD TO THE LONG TERMS CAPITAL GAIN AND THE ASSESSE ING OFFICER AFTER CHECKING FOUND THE WORKING/COMPUTATION OF THE ASSESSEE IN ORDER AND ACCORDINGLY MADE ADDITION ON WHICH THE PENALTY PROCEEDINGS HAS BEEN INITIATED AND PENALTY HAS BEEN IMPOSED. IT IS PERTINENT TO NOTE THAT IN RESPONSE TO THE QUERY RAISED B Y THE AO THE ASSESSEE FILED WRITTEN REPLY DATED 24.12.2009 DURING ASSESSMENT PROCEEDINGS WHICH READS AS FOLLOWS: THE FAIR MARKET VALUE OF AGRICULTURE LANDS CONVERTED INTO STOCK IN TRADE OFFERED BY THE ASSESSEE AS ON 01.04.2005, WHEN CONVERTED INTO STOCK IN TRADE MAY BE VALUED AS PER CIRCLE RATE FIXED FOR AGRICULTURE LAND WITHINSHAMLI HADOOD BUT THE ASSESSEE WAS REQUIRED TO BRING EVIDENCE ON RECORD THAT THE LANDS IN QUESTION WERE ACTUALLY CULTIVATED ON THE DATE OF CONVERSION. I, THEREFORE OFFER TO ASSESS AT FAIR MARKET VALUE AT THE RATE OF RS. 1000/ - PER SQ. MTR. SUBJECT TO NO PENAL ACTION WHATSOEVER. I ALSO UNDERTAKE THAT I SHALL PREFER NO APPEAL AGAINST THE ADDITION MADE ON THIS GROUND AND I SHALL ALSO PAY THE ENTIRE TAX WITHIN THE STIPULATED TIME. 6. IN VIEW OF ABOVE WE OBSERVED THAT THE ASSESSEE PROPOSED FAIR MARKET VALUE OF THE LAND SOLD AT THE RATE OF RS. 1000 PER MTR. WHICH WAS ACCEPTED BY THE AO AND ADDITION IN CONSEQUENCE THERETO WAS MADE. IN THE SITUATION WE ARE NOT AN AGREEMENT WITH THE CONCLU SION WITH THE AUTHORITIES BELOW THAT THE ASSESSE FURNISHED INACCURATE PARTICULARS OF HIS INCOME REGARDING LONG TERM CAPITAL GAIN. HENCE, PENALTY UNDER SECTION 271 (1) (C) OF THE ACT IS NOT IMPOSSIBLE ON THE ASSESSEE BECAUSE THERE WAS NO MAL INTENTION OF TH E ASSESSEE TO SUBMIT INACCURATE PARTICULARS OF HIS INCOME AND HIS CONTENTION/REPLY DATED 24.12.2009 SUBMITTED BEFORE THE AO DURING QUANTUM PROCEEDINGS, AS REPRODUCED HEREIN ABOVE, CLEARLY STATES THAT THE ASSESSE HIMSELF OFFERED FAIR MARKET VALUE AT THE TIM E OF SALE WHICH WAS ACCEPTED BY THE AO FOR MAKING ADDITION AND THE SAME WAS ACCEPTED BY THE ASSESSEE WITHOUT AGITATING THE ISSUE BEFORE THE HIGHER AUTHORITIES. 7. ON THE BASIS OF FOLLOWING DISCUSSION WE ARE INCLINED TO HOLD THAT THE PENALTY WAS LEVIED ON THE ASSESSEE WITHOUT ANY JUSTIFIED AND LEGAL BASIS AND THUS WE DISMISSED THE SAME. ACCORDINGLY, SOLE ISSUE/GROUND OF THE ASSESSEE IS ALLOWED. IN THE RESULT, APPEAL IS ALLOWED ORD ER PRONOUNCED IN THE COURT ON 24. 02.2016 SD/ - SD/ - (G. D. AGRAWAL) (C.M GARG) VICE PRESIDENT JUDICIAL MEMBER * RES. DESKTOP COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT (APPEALS) 5 . DR: ITAT