GAYTRI SHARMA, JAIPUR V. INCOME TAX OFFICER, JAIPUR

ITA 118/JPR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2908 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 31-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VISHAL SINGH
• Keywords: Cost of acquisition; Wrong claim
• Section: 271(1)(c); 273B; 54F; 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 118/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2014-15 SMT. GAYTRI SHARMA, D-214, KARDHANI YOJANA, GOVINDPURA, KALWAR ROAD, JAIPUR. CUKE VS. THE ITO, WARD 4(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ANPPS 8233 H VIHYKFKHZ@ APPELL ANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI VISHAL SINGH (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SMT. NEENA JEPH (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 26/02/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 28/02/2019 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 24.11.2017 OF LD. CIT (A), JAIPUR ARISING FROM PENA LTY ORDER PASSED U/S 271(1)(C) OF THE I. T. ACT FOR A.Y. 2014-15. THE AS SESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, IS IT JUSTIFIED TO LEVY PENALTY OF RS. 1,38,770/-, WHEREBY ALL THE PRIMARY FACTS NECESSARY FOR CLAIMING DEDUCTION OF C APITAL GAIN TAX ITA NO. 118/JP/2018 SMT. GAYTARI SHARMA VS. ITO 2 HAVE BEEN DISCLOSED BEFORE THE LEARNED AUTHORITY AN D NO FACT HAD BEEN CONCEALED BY THE ASSESSEE. 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, IS IT JUSTIFIED BY THE LEARNED AUTHORITY TO LEVY PE NALTY, WHEREBY THE PROPERTY BEING USED FOR RESIDENTIAL PURPOSE ONLY. 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, IS IT JUSTIFIED BY THE LEARNED AUTHORITY TO LEVY PE NALTY, EVEN IF ASSESSEE IS NOT REQUIRED TO MAINTAINED BOOKS OF ACC OUNTS AS PER U/S 44AA READ WITH RULE 6F OF INCOME TAX ACT, 1961. 4. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, IS IT JUSTIFIED BY THE LEARNED AUTHORITY TO LEVY PE NALTY, WHEREBY MISTAKE IN CLAIMING OF DEDUCTION UNDER WRONG PROVIS ION OF LAW WAS BONA-FIDE MISTAKE. 2. THE ASSESSEE IS AN INDIVIDUAL AND FILED ITS RETU RN OF INCOME ON 29.7.2014 DECLARING TOTAL INCOME AT NIL. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE AO NOTED THAT THE ASSES SEE HAS SHOWN INCOME FROM LONG TERM CAPITAL GAIN AT NIL AFTER CLA IMING DEDUCTION U/S 54 OF THE ACT OF RS. 26,30,950/-. ON EXAMINATION OF THE SALE DEED THE AO NOTED THAT THE ASSESSEE HAS SOLD A SHOP NO. A-66 , SUBHASH NAGAR SHOPPING CENTER, JAIPUR VIDE SALE DEED DATED 21.05. 2013 FOR A CONSIDERATION OF RS. 44,62,330/-. THUS, THE AO WAS OF THE VIEW THAT THE ASSESSEE IS NOT ENTITLED FOR THE DEDUCTION U/S 54 O F THE ACT AND ITA NO. 118/JP/2018 SMT. GAYTARI SHARMA VS. ITO 3 ACCORDINGLY, ISSUED A SHOW CAUSE NOTICE TO THE ASSE SSEE. IN RESPONSE, THE ASSESSEE ADMITTED THAT THE PROPERTY SOLD BY THE ASSESSEE IS A SHOP AND CONSEQUENTLY THE DEDUCTION U/S 54F OF THE ACT H AS TO BE ALLOWED INSTEAD OF SECTION 54 OF THE ACT. THE AO HAS ALLOWE D THE DEDUCTION U/S 54F OF THE ACT IN RESPECT OF THE INVESTMENT MADE IN THE NEW HOUSE PROPERTY AND CONSEQUENTLY AN ADDITION OF RS. 8,73,6 42/- IN THE LONG TERM CAPITAL GAIN WAS MADE. THE AO THEN INITIATED T HE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND LEVIED THE PENALTY OF RS. 1,38,770/- BEING 100% OF THE TAX SOUGHT TO BE EVADE D. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT( A) BUT COULD NOT SUCCEED. 3. BEFORE US, THE LD. AR OF THE ASSESSEE HAS SUBMIT TED THAT THE ASSESSEE PURCHASED A PROPERTY FROM JAIPUR DEVELOPME NT AUTHORITY (JDA) IN AUCTION IN THE YEAR 1981 AND THEREAFTER TH E ASSESSEE STARTED LIVING IN THE SAID HOUSE TILL THE SAID SAME WAS TRA NSFERRED DURING THE YEAR UNDER CONSIDERATION. SINCE, THE ASSESSEE WAS U SING PROPERTY AS HER RESIDENTIAL HOUSE THEREFORE, THE ASSESSEE WHILE FIL ING ITS RETURN OF INCOME THROUGH HER TAX CONSULTANT HAS CLAIMED DEDUC TION U/S 54 INSTEAD OF SECTION 54F OF THE ACT. THE LD. AR HAS R EFERRED TO THE COPY OF THE FAMILY RATION CARD, VOTER ID CARD, ELECTRICITY BILL, GAS CONNECTION ITA NO. 118/JP/2018 SMT. GAYTARI SHARMA VS. ITO 4 RECEIPTS AND SAVING BANK ACCOUNT IN SUPPORT OF THE CLAIM THAT THE ASSESSEE WAS USING THE PROPERTY AS A RESIDENTIAL HO USE PRIOR TO TRANSFER DURING THE YEAR UNDER CONSIDERATION. THUS, THE LD. AR HAS SUBMITTED THAT MERELY BECAUSE THE ASSESSEE HAS MADE A CLAIM U NDER WRONG PROVISIONS INSTEAD OF UNDER CORRECT PROVISIONS IT W ILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME OR C ONCEALMENT OF PARTICULARS OF INCOME ATTRACTING PENALTY PROVISIONS U/S 271(1)(C) OF THE ACT. HE HAS FURTHER SUBMITTED THAT ONCE THE AO HAS POINTED OUT THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 54 OF TH E ACT THE ASSESSEE HAS FILED A REVISED COMPUTATION AND MADE THE CLAIM DEDU CTION U/S 54F OF THE ACT. THEREFORE, THIS IS A CASE OF BANA-FIDE MIS TAKE ON THE PART OF THE ASSESSEE AND HIS TAX CONSULTANT. THE LD. AR FURTHE R SUBMITTED THAT THE ASSESSEE IS AN ILLITERATE LADY AND WAS FULLY INDEPE NDENT ON THE TAX CONSULTANT WHILE FILING THE RETURN OF INCOME. THE A SSESSEE HAS DULY DISCLOSED THE TRANSACTION OF SALE OF PROPERTY IN QU ESTION IN THE RETURN OF INCOME AND THEREFORE, IT WOULD NOT AMOUNT TO FURNIS HING INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF PARTICULARS OF INCOME MERELY BECAUSE THE DEDUCTION CLAIMED BY THE ASSESSEE IS UN DER WRONG PROVISIONS OF SECTION 54 INSTEAD OF SECTION 54F OF THE ACT. IN SUPPORT HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF HON BLE SUPREME COURT IN ITA NO. 118/JP/2018 SMT. GAYTARI SHARMA VS. ITO 5 CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. 32 2 ITR 158 AS WELL AS DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN CA SE OF CHANDRAPAL BAGGA VS. ITAT & ANOTHER 261 ITR 67. HENCE, THE LD. AR HAS SUBMITTED THAT ONCE THE ASSESSEE HAS BROUGHT THE RELEVANT FAC TS ON RECORD AND EXPLAINED THE OMISSION AND MISTAKE IN THE CLAIM OF DEDUCTION OF U/S 54 INSTEAD OF SECTION 54F OF THE ACT THEN, THE ASSESSE E IS COVERED BY THE PROVISIONS OF SECTION 273B OF THE ACT. 4. ON THE OTHER HAND, THE LD. DR HAS RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE H AS CLAIMED THE DEDUCTION U/S 54 DESPITE THE FACT THAT THE PROPERTY SOLD BY THE ASSESSEE IS A SHOP AND NOT A RESIDENTIAL HOUSE AND CONSEQUEN TLY THE ASSESSEE HAS DELIBERATELY FURNISHED INACCURATE PARTICULARS O F INCOME OR CONCEALMENT OF PARTICULARS OF INCOME. ONLY WHEN THE ASSESSING OFFICER HAS ISSUED A SHOW CAUSE NOTICE THE ASSESSEE HAS ACC EPTED THE WRONG CLAIM AND CONSEQUENTLY THE AO HAS MADE AN ADDITION AFTER ALLOWING THE DEDUCTION U/S 54F OF THE ACT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS DISCLOSED THE SALE TRANSACTION IN THE RETURN OF INCOME AND SHOWN AS SALE OF BUILDING AND THEN CLAIMED THE DEDUCTION U/S 54F OF THE ACT AS THE ASSESSEE AL SO PURCHASED A NEW ITA NO. 118/JP/2018 SMT. GAYTARI SHARMA VS. ITO 6 RESIDENTIAL HOUSE. THE AO NOTED THAT THE CAPITAL AS SET SOLD BY THE ASSESSEE WAS A SHOP ALLOTTED BY JDA AND THEREFORE, THE DEDUCTION U/S 54 IS NOT AVAILABLE TO THE ASSESSEE. THE ASSESSEE R EVISED ITS MISTAKE OF CLAIMING DEDUCTION U/S 54 INSTEAD OF SECTION 54F OF THE ACT. ACCORDINGLY, THE ASSESSEE REVISED ITS COMPUTATION A ND MADE A CLAIM OF DEDUCTION U/S 54F OF THE ACT. THE ASSESSING OFFICER HAS ALLOWED THE CLAIM OF DEDUCTION U/S 54F OF THE ACT. IT IS PERTIN ENT TO NOTE THAT THE AO HAS NOT DISPUTED THE PRIMARY FACTS DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME BEING SALE CONSIDERATION, THE COST OF ACQUISITION AND COMPUTATION OF CAPITAL GAIN. THE ADDITION WAS MADE BY THE AO DUE TO THE REASONS THAT THE DEDUCTION OF U/S 54 OF THE ACT IS AVAILABLE TO THE EXTENT OF THE INVESTMENT OF THE CAPITAL GAIN WHEREA S THE DEDUCTION U/S 54F OF THE ACT IS AVAILABLE IN THE PROPORTION OF IN VESTMENT OF THE NET SALE CONSIDERATION IN THE PURCHASE OF NEW RESIDENTI AL HOUSE. THEREFORE, DUE TO THE DIFFERENCE OF COMPUTATION OF THE DEDUCTI ON UNDER TWO PROVISIONS I.E. 54 & 54F OF THE ACT A LESSER AMOUN T OF CLAIM OF DEDUCTION WHICH WAS ALLOWED U/S 54F INSTEAD OF SECT ION 54 OF THE ACT AND CONSEQUENTLY, THE AO MADE AN ADDITION OF RS. 8, 73,642. WE FIND THAT THE ASSESSEE HAS ALSO DISCLOSED THE PROPERTY A S A BUILDING THOUGH IT WAS NOT CLAIMED AS RESIDENTIAL HOUSE. THE ASSESSEE ALSO PRODUCED ITA NO. 118/JP/2018 SMT. GAYTARI SHARMA VS. ITO 7 BEFORE THE ASSESSING OFFICER THE SALE DEED FROM WH ICH THE AO FOUND THAT THE PROPERTY SOLD BY THE ASSESSEE IS A SHOP AN D THEREFORE, THE DEDUCTION U/S 54 OF THE ACT IS NOT AVAILABLE BUT TH E DEDUCTION U/S 54F WAS FINALLY ALLOWED BY THE AO. THEREFORE, THIS IS A CLEAR CASE OF THE CLAIM MADE UNDER WRONG PROVISIONS OF SECTION 54 INS TEAD OF U/S 54F OF THE ACT. FURTHER, THE ASSESSEE HAS ALSO PRODUCED TH E COPY OF THE FAMILY RATION CARD, VOTER ID CARD, ELECTRICITY BILL, GAS C ONNECTION RECEIPTS AND SAVING BANK ACCOUNT TO ESTABLISH THE FACT THAT THE ASSESSEE WAS USING THE PROPERTY IN QUESTION FOR THEIR RESIDENTIAL PURP OSE. THESE FACTS CLEARLY MAKE OUT A CASE THAT IT WAS A BANA-FIDE AND INADVER TENT MISTAKE AND OMISSION ON THE PART OF THE ASSESSEE TO CLAIM DEDUC TION U/S 54 INSTEAD OF SECTION 54F OF THE ACT. THEREFORE, WE FIND THAT ONCE, THE ASSESSEE HAS EXPLAINED THE REASONS FOR MAKING A WRONG CLAIM AND THE FACTS EXPLAINED BY THE ASSESSEE ARE DULY ESTABLISHED FROM THE RECORD AND FOUND TO BE TRUE THEN EVEN IF THE ADDITION WAS MADE BY THE AO DUE TO THE CLAIM MADE UNDER WRONG PROVISIONS OF THE ACT. I T WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME OR CONC EALMENT OF PARTICULARS OF INCOME. ACCORDINGLY, IN VIEW OF THE PROVISIONS O F SECTION 237B OF THE ACT ONCE THE ASSESSEE HAS PROVED THAT THERE WAS A R EASONABLE CAUSE FOR MAKING THE CLAIM OF SECTION 54 INSTEAD OF SECTION 5 4F OF THE ACT THEN ITA NO. 118/JP/2018 SMT. GAYTARI SHARMA VS. ITO 8 THE PENALTY U/S 271(1)(C) OF THE ACT CANNOT BE IMPO SED. ACCORDINGLY WE DELETE THE PENALTY LEVIED BY THE AO U/S 271(1)(C) O F THE I. T. ACT. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/02/2019. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 28/02/2019. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. GAYTRI SHARMA, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD 4(1), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 118/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR