DCIT, CHENNAI V. D.Parthasarathy, CHENNAI

ITA 1171/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8166 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 29-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: N SABAPATHY
• Keywords: Capital asset; Wrong claim
• Section: 54F; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . . !' , # $% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.1171/MDS/2016 & '& /ASSESSMENT YEAR : 2011-12 THE DEPUTY COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE -14, CHENNAI 600 034. V. SHRI D.PARTHASARATHY, NO.60, SESHACHALAM STREET, SAIDAPET, CHENNAI 600 015. PAN: AAAPP7873L ( () /APPELLANT) ( *+() /RESPONDENT) () , - /APPELLANT BY : SHRI SHIVA SRINIVAS, JCIT *+(),- /RESPONDENT BY : SHRI N.SABAPATHY, ADVOCATE ,.# /DATE OF HEARING : 19.09.2016 /0' ,.# /DATE OF PRONOUNCEMENT : 28.10.2016 /O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF CIT(A) -14, CHENNAI DATED 29.01.2016. 2. SHRI SHIVA SRINIVAS, THE LEARNED DEPARTMENT REPR ESENTATIVE SUBMITTED THAT THE ASSESSEE HAS SOLD A VACANT LAND AND CLAIME D DEDUCTION UNDER SECTION 54 OF THE ACT. ACCORDING TO THE LEARNED DEPARTMENT REPRESENTATIVE, WHAT WAS 2 I.T.A. NO.1171/MDS/2016 SOLD BY THE ASSESSEE IS A VACANT LAND AND NOT A RES IDENTIAL PROPERTY. DURING THE SCRUTINY PROCEEDING, THE ASSESSING OFFICER FOUND TH AT THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 54 OF THE ACT. MOREOVER, THE ASSESSING OFFICER HAS ALSO FOUND THAT THE ASSESSEE WAS NOT EL IGIBLE FOR DEDUCTION UNDER SECTION 54F OF THE ACT ALSO AS HE IS AN OWNER OF MO RE THAN ONE RESIDENTIAL PROPERTY ON THE DATE OF TRANSFER. THE ASSESSING OFF ICER FOUND THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS WHILE FILING THE RETU RN OF INCOME AND MADE A WRONG CLAIM. THEREFORE, THE ASSESSING OFFICER LEVIE D PENALTY UNDER SECTION 271(1)(C) OF THE ACT. SINCE THE ASSESSEE HAS FURNIS HED INACCURATE PARTICULARS ACCORDING TO THE DEPARTMENT REPRESENTATIVE, THE ASS ESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE CIT(A) HOWE VER DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER WITHOUT ANY JUSTIFI ABLE CAUSE. 3. ON THE CONTRARY, SHRI N.SABAPATHY, THE LEARNED C OUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE ENGAGED ITSELF IN THE BUSINESS OF CIVIL CONSTRUCTION. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE SOLD A RESIDENTIAL PREMISE AT ANNA NAGAR AND CLAIMED EXEMP TION UNDER SECTION 54 OF THE ACT. IN FACT, THE HOUSE PROPERTY AT ANNA NAGAR WAS PURCHASED BY THE ASSESSEE. THE ASSESSEE HAS ALSO DECLARED THE RENTAL INCOME FROM THIS HOUSE PROPERTY. SUBSEQUENTLY, THE HOUSE WAS DEMOLISHED ON THE REQUEST OF THE BUYER AND SALE DEED WAS EXECUTED DURING THE YEAR UNDER CO NSIDERATION. THEREFORE, THE ASSESSEE MADE A CLAIM UNDER SECTION 54 OF THE A CT. EVEN IF FOR ANY REASONS, THE CLAIM UNDER SECTION 54 COULD NOT BE AL LOWED, THE ASSESSEE IS DEFINITELY ELIGIBLE FOR DEDUCTION UNDER SECTION 54F OF THE ACT. REFERRING TO THE 3 I.T.A. NO.1171/MDS/2016 JUDGMENT OF THE APEX COURT IN CIT VS. RELIANCE PETROPRODUCTS PVT.LTD. (2010) 189 TAXMAN 322 , THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FURNISHED ALL THE DETAILS OF THE CAPITAL ASSET, THE SALE TRANSACTION AND ALSO CLAIMED EXEMPTION UNDER S ECTION 54 OF THE ACT. THE ASSESSEE HAS ALSO MADE ALTERNATIVE CLAIM UNDER SECTION 54F. MAKING A STATUTORY CLAIM BEFORE THE ASSESSING OFFICER DOES NOT IN ANY WAY AMOUNTS TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. MERELY, BECAUSE THE ASSESSEE MADE A CLAIM UNDER SECTION 54 OF THE INCOME TAX ACT, ALTERNATIVELY, UNDER SECTION 54F OF THE ACT AN D THE ASSESSING OFFICER HAS NOT ACCEPTED THE CLAIM OF THE ASSESSEE THAT WOU LD NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME FOR LEV Y OF PENALTY UNDER SECTION 271(1)(C)OF THE ACT. IN VIEW OF THE JUDGMEN T OF THE APEX COURT IN RELIANCE PETROPRODUCTS PVT.LTD. (SUPRA), THE CIT(A) RIGHTLY FOUND THAT THE MAKING A CLAIM WHICH IS NOT SUSTAINABLE IN THE EYE OF LAW WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME. THE CIT(A) HAS RIGHTLY DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER . 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. SEC TION 271(1)(C) ENABLES THE ASSESSING OFFICER OR THE COMMISSIONER OR THE P RINCIPAL COMMISSIONER TO LEVY PENALTY IN CASE ANY ONE OF THEM IS SATISFIE D THAT THE ASSESSEE HAS 4 I.T.A. NO.1171/MDS/2016 CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHE D INACCURATE PARTICULARS OF SUCH INCOME. IN THE CASE BEFORE US, ADMITTEDLY, THE ASSESSEE TRANSFERRED HIS PROPERTY DURING THE YEAR UNDER CONS IDERATION AND EARNED CAPITAL GAIN AND THE ASSESSEE HAS FURNISHED THE DETAILS OF THE CAPITAL GAIN BEFORE THE ASSESSING OFFICER. THEREFORE, THE ASSESSEE HAS NOT CONCEALED ANY PART OF HIS INCOME. NOW, COMING TO INACCURATE PARTICULARS OF IN COME, THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 54 OF THE INCOME TAX ACT. A LTERNATIVELY, THE ASSESSEE HAS ALSO CLAIMED DEDUCTION UNDER SECTION 54F. THE A SSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 54 ON THE G ROUND THAT WHAT WAS SOLD BY THE ASSESSEE IS A VACANT CITE. THE ALTERNATE CLA IM OF THE ASSESSEE UNDER SECTION 54F WAS ALSO DISALLOWED ON THE GROUND THAT THE ASSESSEE OWNS MORE THAN ONE RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET ON THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET. 5. THE QUESTION ARISES FOR CONSIDERATION IS WHETHER THE CLAIM MADE BY THE ASSESSEE UNDER SECTION 54 AND 54F OF THE ACT WOULD AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IN VIEW OF THE JUDGMENT OF THE APEX COURT IN RELIANCE PETROPRODUCT S PVT.LTD. (SUPRA), THE CLAIM MADE BY THE ASSESSEE UN DER SECTION 54 OR 54F OF THE ACT, IT CANNOT BE CONSIDERED AS FURNISHING I NACCURATE PARTICULARS OF INCOME. A STATUTORY CLAIM MADE BY THE ASSESSEE WHIC H WAS DISALLOWED BY THE ASSESSING OFFICER CANNOT BE CONSIDERED BY ANY S TRETCH OF IMAGINATION THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICUL ARS OF HIS INCOME. AT 5 I.T.A. NO.1171/MDS/2016 THE BEST, WE MAY SAY THAT THE CLAIM MADE BY THE ASS ESSEE IS NOT SUSTAINABLE IN LAW OR THE ASSESSEE HAS WRONGLY CLAI MED DEDUCTION UNDER SECTION 54 OR 54F OF THE ACT. THE CLAIM MADE WRONGL Y OR WHICH IS NOT SUSTAINABLE IN LAW CANNOT BE A REASON TO LEVY PENAL TY UNDER SECTION 271(1)(C). THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). ACCORDINGLY, THE SAME IS CONFI RMED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON 28 TH OCTOBER, 2016 AT CHENNAI. SD/- SD/- ( . . !' ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) # /ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 1 /DATED, THE 28 TH OCTOBER, 2016. SP. , *.!2 32'. /COPY TO: 1. () /APPELLANT 2. *+() /RESPONDENT 3. 4. ( )/CIT(A) 4. 4. /CIT, 5. 25 *. /DR 6. & 6 /GF.