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

ITA 1055/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4074 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 20-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISHA KUMARI
• Keywords: Sale consideration of property below Jantri Value; Principle of natural justice; Date of conversion; Fair market value; Revised return
• Section: 50C; 147; 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: BENCH G NEW DELHI BEFORE SRI N.K.SAINI , ACCOUNTANT MEMBER AND SMT. BEENA A PILLAI, J UDICIAL MEMBER ITA NO. 1055 /DEL/201 5 A.Y. 20 08 - 09 SH. SHIV KUMAR KAMBOJ VS. ITO, WARD 1 KAIRANA ROAD SHAMLI SHAMLI PAN: ABFPK2584D (APPELLANT) (RESPONDENT) APPELLANT BY: SRI ANKIT GUPTA, ADV. RESPONDENT BY: MS.MANISHA KUMARI , SR.D.R DATE OF HEARING : 1 7 .01.2018 DATE OF PRONOUNCEMENT : 22.01.2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER T HE PRESENT PENALTY APPEAL HAS BEEN FILED BY ASSESSEE AGAINST ORDER DATED 01/12/14 PASSED BY LD.CIT(A) , MUZAFFARNAGAR FOR A SSESSMENT Y EAR 2008 - 09 ON THE FOLLOWING GROUNDS OF APPEAL: L. THAT THE NOTICE ISSUED U/S 271(1) (C) AND ORDER IMPOSING PENALTY OF RS.1,74,182/ - UNDER SAID SECTION ARE ILLEGAL, BAD IN LAW, AND WITHOUT JURISDICTION. ITA 1055/DEL/2015 ASSESSMENT YEAR:2008 - 09 SH. SHIV KUMAR KAMBOJ VS. ITO PAGE 2 OF 10 2. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCE OF THE CASE THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE PENALTY OF RS.1,74,182/ - IMPOSED U/S 271 (1) (C). 3. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE AO / CIT (A) HAS ERRED IN LAW AND ON FACTS IN NOT COMING TO A CLEAR FINDING REGARDING PENALTY BEING IMPOSED ON CONCEALMENT OF INCOME OR ON FURNISHING INACCURATE PARTICULARS OF INCOME, HENCE THE ORDER IMPOSING PENALTY IS ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. 4. THAT THE AO / CIT(A), IN VIEW OF T HE FACTS AND CIRCUMSTANCES, ERRED IN MAKING THE ADDITION OF RS.22,095/ - U /S 263/143(3)ON ACCOUNT OF LONG TERM CAPITAL GAIN ON THE CONVERSION OF LAND IN TO STOCK IN TRADE UNDER SECTION 50C, WHICH CANNOT BE TREATED AS CONCEALMENT OF INCOME OR FURNISHING OF I NACCURATE PARTICULARS AS PER THE PROVISION OF SECTION 271 (1)( C). 5. THAT THE AO / CIT(A) FAILED TO APPRECIATE THAT IN THE RETURN FILED IN RESPONSE TO THE NOTICE 148, THE ASSESSEE APPELLANT HIMSELF SHOWN THE CAPITAL GAIN AT RS.9,55,375.00 OFFERING THE DEE MING ESTIMATING VALUE AT RS.1, 000.00 SQ.MTR. AND SAME IS ACCEPTED BY THE ASSESSING OFFICER. 6. THAT THE INFORMATION FILED AND MATERIAL AVAILABLE ON RECORD ARE NOT PROPERLY CONSIDERED AND AS SUCH THE ORDER IMPOSING PENALTY U / S 271(1)(C) IS ILLEGAL AND BAD IN LAW. 7 . THAT THE APPELLANT HAD NEITHER CONCEALED PARTICULARS OF INCOME NOR HAS NOT FILED INACCURATE PARTICULARS OF INCOME AND THE CIT (A) HAS FAILED TO APPRECIATE THAT THE ADDITIONS ARE MADE MERE ON DISALLOWANCE OF EXPENSES / CLAIMS. 8 . THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT PROVIDING THE PROPER OPPORTUNITY OF HEARING, WHICH IS BAD IN LAW AND AGAINST THE PRINCIPLE OF NATURAL JUSTICE. 9 . PENALTY PROCEEDINGS HAVE BEEN INITIATED WITHOUT ANY S PECIFIC CHARGES HENCE THE SAME ARE LIABLE TO BE SET ASIDE. 10 .THAT IN ANY CASE THE PENALTY IMPOSED IS UNJUST, ARBITRARY AND HIGHLY EXCESSIVE. ITA 1055/DEL/2015 ASSESSMENT YEAR:2008 - 09 SH. SHIV KUMAR KAMBOJ VS. ITO PAGE 3 OF 10 11. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER AND OR MODIFY THE GROUNDS OF APPEAL O F THE SAID APPEAL. ALL OF THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE AND ARE MUTUALLY EXCLUSIVE TO EACH OTHER . 2. BRIEF FACTS OF THE CASE ARE AS UNDER : THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN DECLARING INCOME AT RS. 3,88,881/ - FROM REAL ESTATE BUSINESS, DHARAMKANTA AND OTHER SOURCES INCLUDING AGRICULTURAL INCOME AT RS. 1,50,000/ - AND NIL INCOME UNDER THE HEAD 'CAPITAL GAIN', WAS FILED ON 31.07.2008. THE CASE WAS SELECTED UNDER SCRUTINY U/S. 148 OF THE IT ACT, 1961 (THE ACT) ON THE BASIS OF ADDITION MADE T OWARDS THE LONG T ERM C APITAL GAIN IN PREVIOUS YEAR I.E. A.Y. 2007 - 08. THE RETURN OF INCOME FOR A.Y. 2008 - 09 WAS FILED BY ASSESSEE ON 03.02.2010 IN WHICH REVISED COMPUTATION OF INCOME WAS SUBMITTED AND LTCG WAS SHOWN AT RS. 9,33,283/ - . THE CASE WAS FINALIZ ED ON 11.05.2010 U/S 148/143(3) OF THE IT ACT, 1961, IN WHICH THE TAXABLE LONG TERM CAPITAL GAIN WAS ASSESSED AT RS. 9,33,280/ - (ROUNDED OFF) AND AGRICULTURAL INCOME AT RS. 1,50,000/ - . 2.1. IN THIS CASE ACTION U/S. 148 WAS TAKEN FOR THE REASON POINTING O UT THAT DURING THE YEAR UNDER CONSIDERATION LAND MEASURING 7169.19 SQ. Y ARD SITUATED AT GAGAN VIHAR, SEC - 2, HAD BEEN CONVERTED INTO STOCK IN TRADE AT THE RATE OF RS. 125/ - PER SQ. Y ARD WHEREAS THE CIRCLE RATE FOR STAMP DUTY PURPOSE, PREVALENT AT THAT TIME W AS RS. 1700/ - PER SQ. Y ARD IN PLACE OF RS. 125/ - PER SQ. YARD, AS SHOWN BY THE ASSESSEE. AT THE TIME OF REVIEW FOLLOWING DEFICIENCY WAS FOUND WHICH IS AS UNDER: ITA 1055/DEL/2015 ASSESSMENT YEAR:2008 - 09 SH. SHIV KUMAR KAMBOJ VS. ITO PAGE 4 OF 10 I) 'AT THE TIME OF COMPLETING ASSESSMENT, THE AO H AS ACCEPTED THE RATE OF AGRICULTURAL LAND C ONVERTED INTO STOCK IN TRADE AT RS. 1000/ - PER SQ. MTR AS DECLARED BY THE ASSESSEE IN THE RETURN FILED IN RESPONSE TO NOTICE U/S. 148. THE BASIS OF ACCEPTING THE RATE OF RS. 1000/ - PER SQ. MTR HAS NOT BEEN GIVEN. THE VALUE OF LAND SHOULD HAVE BEEN TAKEN AS PER CIRCLE RATE AS ON THE DATE OF CONVERSION THE AGRI. LAND INTO STOCK IN TRADE I.E. RS. 1700/ - PER SQ.MTR. II) THE ASSESSEE HAS FILED REVISED RETURN GIVING THEREIN THE REVISED CALCULATION OF CAPITAL GAIN AFTER RECEIVING THE NOTICE U/S 148. IN THIS WA Y THE ASSESSEE HAS DECLARED ENHANCED INCOME AFTER DETECTION OF THE SAME BY THE DEPARTMENT. HENCE THE ASSESSEE WAS LIABLE FOR PENALTY U/S 271(1)(C ) OF THE ACT FOR WHICH NO PROCEEDINGS HAVE BEEN INITIATED BY THE A.O. THE CIT, MUZAFFARNAGAR, PASSED THE ORDER U/S 263 OF THE ACT ON 12.12.2011, IN WHICH HIS OBSERVATION WAS AS UNDER: THE AO ESTIMATED THE FAIR MARKET VALUE OF THE LAND @ 1000/ - PER SQ.YARD AS AGAINST RS.1700/ - PER SQ.YARD FIXED BY THE STATE GOVERNMENT FOR STAMP DUTY PURPOSES. THE SAID REASON S ARE AGAINST THE PROVISIONS OF SECTION 50C OF THE ACT AS PER WHICH THE FAIR MARKET VALUE OF THE LAND COULD NOT BE LESS THAN RS.1700/ - PER SQ.YARD FIXED BY THE STATE GOVERNMENT FOR STAMP DUTY PURPOSES. THUS THE REASONS U/S 147 OF THE ACT ARE VOID AND THE ASSESSMENT BASED ON THOSE REASONS IS BAD IN LAW. ITA 1055/DEL/2015 ASSESSMENT YEAR:2008 - 09 SH. SHIV KUMAR KAMBOJ VS. ITO PAGE 5 OF 10 2.2. NOTICE UNDER SECTION 271(1) (C ) OF THE ACT WAS ISSUED. ON THE BASIS OF THE REPLY FILED BY ASSESSEE PENALTY WAS LEVIED FOR FURNISHING OF INACCURATE PARTICULARS WITHIN THE MEANING OF EXPLANATION 1 (B) READ WITH SECTION 271 (1) (C ) OF THE ACT AT RS. 1, 74, 182/ - . 2.3 . AGGRIEVED BY THE ORDER OF LD. AO ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT (A) WHO CONFIRMED THE PENALTY LEVIED BY LD. AO. 2.4. AGGRIEVED BY THE ORDER OF LD. CIT (A) ASSESSEE IS IN APP EAL BEFORE US NOW. 3. AT THE OUTSET LD. AR SUBMITTED THAT PENALTY ON IDENTICAL GROUND WAS LEVIED FOR ASSESSMENT YEARS 2007 - 08 WHICH HAS BEEN DECIDED BY THIS T RIBUNAL AS UNDER: 3. AS PER CONTENTION RAISED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW WE OBSE RVED 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 OF LAND INTO STOCK AND TRADE UNDER SECTION 50C OF THE ACT, WHICH CANNOT BE TREATED AS CO NCEALMENT 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 THE AUT HO RITIES 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 TAKEN AGAINST HI M . IT WAS VEHEMENTLY CONTENDED BY THE ASSESSEE THAT THE ASSESSEE HAD NEI THER CONCEALED PARTICULARS 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 ITA 1055/DEL/2015 ASSESSMENT YEAR:2008 - 09 SH. SHIV KUMAR KAMBOJ VS. ITO PAGE 6 OF 10 DISALLOWANCE 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 PARTICULARS OF HIS INCOME WITHIN THE MEANING OF EXPLANATION 1 (B) OF SECTION 271(1) (C) OF T HE ACT BY NOT SHOWING THE ACCURATE PARTICULARS OF INCOME FROM SALE OF PROPERTY TO THE TUNE OF RS. 6,57,950/ - THER EFORE THE PENALTY WAS CORRECTLY AND RIGHTLY IMPOSED BY THE AO AND THE SAME WAS UPHELD BY THE FIRST APPELLATE AUTHORITY BY PASSING A SPEAKING A ND 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 ORDER AS WELL AS IMPUGNED ORDER UNDISPUTEDLY, IN THE QUANTUM ORDER PASSED UNDER SECTION 14 3 (3) OF THE ACT THE ASSESSING OFFICER MADE AN ADDITION ON THE BASIS OF REVISE WORKING SUBMITTED BY THE ASSESSEE IN REGARD TO THE LONG TERMS CAPITAL GAIN AND THE ASSESSING OFFICER AFTER CHECKING FOUND THE WORKING/COMPUTATION OF THE ASSESSEE IN ORDER AND AC CORDINGLY 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 BY 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 ITA 1055/DEL/2015 ASSESSMENT YEAR:2008 - 09 SH. SHIV KUMAR KAMBOJ VS. ITO PAGE 7 OF 10 'STOCK IN TRADE JJ MAY BE VALUED AS PER CIRCLE RATE FIXED FOR AGRICULTURE LAND WITHIN SHAMLI HADOOD BUT THE ASSESSEE WAS REQUIRED TO BRING EVIDENCE ON RECORD THAT THE LANDS IN QUESTION WERE ACTUALLY CULTIVATED ON THE DATE OF CONVERSION. L THEREFORE OFFER TO ASSESS AT FAIR MARKET VALUE AT THE RATE OF RS. 1000/ - PER SQ.MTR. SUBJECT TO NO PENAL ACTIO N 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. W HICH WAS ACCEPTED BY THE AO AND ADDITION IN CONSEQUENCE THERETO WAS MADE. IN THE SITUATION WE ARE NOT AN AGREEMENT WITH THE CONCLUSION 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 THE ASSESSEE TO SUBMIT INACCURATE PARTICULARS OF HIS INCOME AND HIS CONTENTION/REPLY DA TED 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 TIME 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. 3.1 . LD. DR ON THE CONTRARY PLACE D RELIANCE UPON THE ORDERS OF THE AUTHORITIES BELOW. ITA 1055/DEL/2015 ASSESSMENT YEAR:2008 - 09 SH. SHIV KUMAR KAMBOJ VS. ITO PAGE 8 OF 10 4. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SIDES IN THE LIGHT OF THE RECORDS PLACED BEFORE US. 4.1. IN OUR CONSIDERED VIEW THE ISSUE STANDS SQUARELY COVERED BY ASSESSEE S OWN CASE IN THE PENALTY PROCEEDINGS FOR ASSESSMENT YEAR 2007 - 08 V IDE ORDER DATED 24/02/16 PASSED BY THIS T RIBUNAL IN ITA NO. 1054/DEL/20 15. RESPECTFULLY FOLLOWING THE SAME WE DELETE THE PENALTY LEVIED BY LD. AO FOR THE YEAR UNDER CONSIDERATION. ACCORDINGLY THE GROUNDS RAISED BY ASSESSEE STANDS ALLOWED. 5. IN THE RESULT APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OP EN COURT ON 22 ND JANUARY, 2018. SD/ - SD/ - ( N.K. SAINI ) (BEENA A PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 22 ND J ANUARY, 2018 MV ITA 1055/DEL/2015 ASSESSMENT YEAR:2008 - 09 SH. SHIV KUMAR KAMBOJ VS. ITO PAGE 9 OF 10 COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES ITA 1055/DEL/2015 ASSESSMENT YEAR:2008 - 09 SH. SHIV KUMAR KAMBOJ VS. ITO PAGE 10 OF 10 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON DRAGON SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER