Sh. Sachin Markan, Sirhind V. ITO, Ward, Sirhind

ITA 1100/CHANDI/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 5984 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 24-08-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Sale consideration of property below Jantri Value; Revised return; Capital Gains
• Section: 271(1)(c); 50C; 54F; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, SMC, CHANDIGARH , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 1100/CHD/2018 / ASSESSMENT YEAR : 2011-12 SH. SACHIN MARKAN, M/S HANS BOOT HOUSE, MAIN BAZAR, SIRHIND VS. THE ITO, WARD-SIRHIND ./PAN NO: BNDPM4683G / APPELLANT /RESPONDENT ! /ASSESSEE BY : SH. SUDHIR SEHGAL, ADVOCATE ' ! / REVENUE BY : SH. MANJIT SINGH, SR. DR # $ % /DATE OF HEARING : 02.01.2019 &'() % / DATE OF PRONOUNCEMENT : 02.01.2019 / ORDER THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 2.4.2018 OF THE COMMISSIONER OF INCOME TAX (APPEALS), LUDHIANA [HEREINAFTER REFERRED TO AS CIT(A)] AGIT ATING THE CONFIRMATION OF PENALTY OF RS. 3,85,540/- LEVIED BY THE ASSESSIN G OFFICER U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT T HE ASSESSEE SOLD A PLOT OF LAND BY WAY OF TWO REGISTERED SALE DEEDS, ONE PA RT OF THE LAND WAS SOLD FOR A SUM OF RS. 4,30,000/- AND THE SECOND PART WAS SOLD AT RS. 4 LACS. HOWEVER, THE STAMP DUTY AUTHORITIES ASSESSED THE V ALUE OF THE LAND AT RS. 14,20,000/- AND RS. 12,62,000/- RESPECTIVELY. THE A SSESSEE DECLARED ONLY ITA NO. 1100-CHD-2018- SH. SACHIN MARKAH, SIRHIND 2 THE FIRST SALE DEED IN THE RETURN OF INCOME AND OFF ERED CAPITAL GAINS TAX AS PER SALE DEED AMOUNT OF RS. 4.30 LACS. THE ASSESSIN G OFFICER NOTED THAT THE ASSESSEE INSTEAD OF OFFERING THE CAPITAL GAIN TAX A S PER THE STAMP DUTY VALUATION OF THE PLOT UNDER THE PROVISIONS OF SECTI ON 50C OF THE ACT HAS WRONGLY DECLARED THE CAPITAL GAINS AS PER THE SALE DEED PRICE. HE FURTHER NOTICED THAT THE ASSESSEE DID NOT DISCLOSE THE SECO ND SALE DEED AND, THEREBY, DID NOT DEPOSIT THE CAPITAL GAIN TAX IN RE SPECT OF THE SECOND SALE DEED. THE ASSESSMENT WAS REOPENED. IN THE REOPENED ASSESSMENT PROCEEDINGS, THE ASSESSEE TOOK THE SALE PRICE OF TH E LAND AT THE COLLECTORATE RATE FOR THE PURPOSE OF STAMP DUTY VALUATION AND FU RTHER CLAIMED EXEMPTION U/S 54F OF THE ACT CLAIMING THAT HE HAD PURCHASED ANOTHER HOUSE FOR RS. 16,84,185/- AND THEREBY DECLARED CAPITAL GAINS ON T HE BALANCE AMOUNT AT RS. 43,512/-. HOWEVER, THE ASSESSEE COULD NOT PR OVE THE PURCHASE OF THE NEW RESIDENTIAL PROPERTY. THE ASSESSING OFFICER, TH EREFORE, ASSESSED THE CAPITAL GAINS IN RESPECT OF BOTH THE PLOTS TAKING T HE SALE VALUE AT COLLECTORATE RATE. 3. PENALTY PROCEEDINGS WERE ALSO INITIATED FOR CONC EALMENT OF PARTICULARS OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. SINCE THE ASSESSEE DURING THE PENALTY PROCEEDINGS COULD NOT OFFER THE PLAUSIBLE EXPLANATION FOR NOT OFFERING THE CORRECT CAPITAL GAINS TAX, HENCE, THE ASSESSING OFFICER IMPOSED PENALTY U/S 271(1)(C) OF THE ACT @ 100% OF THE TAX SOUGHT TO BE EVADED IN RESPECT OF THE AFORE SAID CAPITAL GAINS EARNED BY THE ASSESSEE ON THE SALE OF PROPERTY. THE ASSESS EE UNSUCCESSFULLY CONTESTED THE APPEAL BEFORE THE LD. CIT(A). ITA NO. 1100-CHD-2018- SH. SACHIN MARKAH, SIRHIND 3 4. BEFORE THIS BENCH, THE LD. COUNSEL FOR THE ASSES SEE HAS FIRSTLY SUBMITTED THAT THERE WAS NO INTENTIONAL OR DELIBERA TE ACT ON THE PART OF THE ASSESSEE TO CONCEAL HIS INCOME OR TO FURNISH INACC URATE PARTICULARS OF INCOME. THAT THE SALE PRICE OF THE FIRST PART OF TH E LAND WAS SHOWN BY THE ASSESSEE AT THE ACTUAL AMOUNT RECEIVED BY THE ASSE SSEE. HOWEVER, INADVERTENTLY THE SECOND SALE DEED COULD NOT BE SHO WN IN THE RETURN OF INCOME. HE HAS FURTHER SUBMITTED THAT THE PROVISION S OF SECTION 50C ARE DEEMING PROVISIONS REQUIRING THE ASSESSING OFFICER TO ASSESS THE SALE VALUE AS PER THE COLLECTORATE RATE / STAMP VALUATION AUTH ORITY RATE. HOWEVER, THE ASSESSEE DID NOT RECEIVE ANY AMOUNT MORE THAN THE A MOUNT AS WAS MENTIONED IN THE SALE DEED ITSELF. 4. ON THE OTHER HAND, LD. DR HAS POINTED OUT THAT, IN FACT, THE ASSESSEE CHANGED HIS STAND IN THE REVISED RETURN FILED U/S 1 48 OF THE ACT AND HIMSELF DECLARED / ADMITTED THE SALE PRICE OF BOTH THE PART OF THE PLOTS AS EQUAL TO THE STAMP DUTY VALUATION / COLLECTORATE RATE. HE, THEREFORE, HAS SUBMITTED THAT ASSESSEE HAS NOT COME TO THIS COURT WITH LEAN HANDS AND DOES NOT DESERVE ANY RELIEF. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE ALSO GONE THROUGH THE RECORD. I AM NOT CONVINCED WITH THE ARGUMENTS T HAT THE ASSESSEE INADVERTENTLY FAILED TO DISCLOSE THE SECOND SALE DE ED IN THE RETURN OF INCOME. THERE IS NO PLAUSIBLE EXPLANATION OFFERED BY THE ASSESSEE IN THIS RESPECT. HAD THE ASSESSING OFFICER NOT GOT THE INFO RMATION FROM DEPARTMENTAL SOURCES, THE ASSESSEE WOULD HAVE LEFT UN-ASSESSED IN RESPECT OF THE SECOND SALE DEED AND THEREBY EVASION OF DUE TAXES. SO FAR AS THE CONTENTION THAT SECTION 50C OF THE ACT IS DEEMING PROVISION, THAT THE ITA NO. 1100-CHD-2018- SH. SACHIN MARKAH, SIRHIND 4 PENALTY SHOULD NOT BE LEVIED ON THE DIFFERENCE OF A MOUNT OF ACTUAL RECEIPT OF CONSIDERATION AND THAT HAS BEEN ASSESSED U/S 50C OF THE ACT, IS CONCERNED, I AM OF THE VIEW, THAT THE ASSESSEE DESE RVES RELIEF ON THIS ISSUE. THERE IS NO EVIDENCE ON THE FILE THAT THE ASSESSEE HAS RECEIVED ANY AMOUNT MORE THAN THAT HAS BEEN MENTIONED IN THE SALE DEED ITSELF. THE ASSESSEE HAS TO PAY EXTRA TAXES BECAUSE OF THE VALUATION ADOPTED BY THE ASSESSING OFFICER AS PER THE PROVISIONS OF SECTION 50C OF THE ACT. HOWEVER, THIS, IN MY VIEW, CANNOT BE SAID TO BE A CASE OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. THOUGH AS POINTED OUT BY THE LD. DR, THE ASSESSEE TO ESCAPE T HE RIGOUR OF THE PENALTY, IN THE REVISED RETURN FILED U/S 148 OF THE ACT HAS SHOWN THE CAPITAL GAINS AS EQUIVALENT AT THE COLLECTORATE RATE AND ALSO PUT A CLAIM OF EXEMPTION U/S 54F OF THE ACT BUT COULD NOT SUCCEED IN THIS RESPEC T. HOWEVER, CONSIDERING THE OVER ALL FACTS AND CIRCUMSTANCES OF THE CASE, T HIS BENCH IS OF THE VIEW THAT THE INTEREST OF JUSTICE WILL BE BEST SERVED IF THE PENALTY IS RESTRICTED TO THE EXTENT OF NON-DISCLOSURE OF THE SECOND SALE DE ED TO BE CALCULATED @100% OF THE TAX SOUGHT TO BE EVADED ON THE CAPITAL GAINS COMPUTED AS PER THE ACTUAL SALE PRICE MENTIONED IN THE SALE DEED. H OWEVER, IT IS MADE CLEAR THAT MY ABOVE OBSERVATIONS / ORDERS RESTRICTING THE PENALTY AS DIRECTED ABOVE WILL NOT HAVE ANY BEARING ON THE TAX PAYABLE BY THE ASSESSEE IN THE QUANTUM ASSESSMENT PROCEEDINGS OR IN ANY APPELLATE PROCEEDINGS ARISING IN RESPECT THEREOF. WITH THE ABOVE OBSERVATIONS, THE APPEAL OF THE ASSE SSEE IS TREATED AS PARTLY ALLOWED. ITA NO. 1100-CHD-2018- SH. SACHIN MARKAH, SIRHIND 5 6. BEFORE PARTING IT IS TO BE MENTIONED THAT THOUGH IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS TAKEN A GROUND REGARDING S OME DEFECT, NON- CLAIMING OF CHARGE IN THE PENALTY NOTICE, HOWEVER, THE SAID GROUND HAS BEEN WITHDRAWN AT BAR BY THE LD. COUNSEL FOR THE AS SESSEE. NO OTHER ARGUMENT WAS RAISED OR STRESSED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATE D AS PARTLY ALLOWED. ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT IMM EDIATELY ON COMPLETION OF HEARING. SD/- ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 02.1.2019 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR