ACIT 21(1), MUMBAI V. FARHAD JAMSHED BOTTLEWALA, MUMBAI

ITA 1198/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6741 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 07-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP
• Assessee Lawyers: H S RAHEJA
• Keywords: Question of law; Difference of opinion
• Section: 54F; 54; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI N.K. PRADHAN , HON'BLE ACCOUNTANT MEMBER ITA NO . 1198 /MUM/2016 (A.Y : 2008 - 09 ) ASST. CIT 21(1) ROOM NO. 116, 1 ST FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI 400 012 V . SHRI FARHAD JAMSHED BATLIWALA 7 KHAN ESTATE, BATLIWALA BUILDING, M.M. CHOTTANI ROAD, MAHIM MUMBAI 400 016 PAN NO : AAEPB 9228 P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI H.S. RAHEJA DEPARTMENT BY : MS. POOJA SWAROOP DATE OF HEARING : 19 . 04.2018 DATE OF PRONOUNCEMENT : 27 .06 .2018 O R D E R PER C.N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS) - 33, MUMBAI DATED 06.12.2015 IN DELETING THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT. 2. BRIEFLY STATED THE FACTS ARE THAT, ASSESSEE IS A N ON - RESIDENT INDIAN (N RI ) SOLD TWO PLOTS OF LAND SITUATED AT PUNE AND ARRIVE D AT THE LONG TERM CAPITAL GAINS AT .8.95 CRORES. THE SALE PROCEEDS OF THE SAID PLOTS WERE UTILIZED FOR ACQUIRING THE RESIDENTIAL HOUSE AT CALIFORNIA, U . S . A AND 2 ITA NO.1198/MUM/2016 (A.Y: 2008 - 09) SHRI FARHAD JAMSHED BATLIWALA EXEMPTION U/S. 54F WAS CLAIMED. THE ASSESSING OFFICER HOWEVER DENIED THE CLAIM OF EXEMPTION U/S. 54F OF THE ACT AS THE ASSESSEE MADE INVESTMENTS BY PURCHASING RESIDENTIAL HOUSE OUTSIDE INDIA. THE APPEAL PREFERRED BY THE ASSESSEE WAS ALSO DISMISSED BY THE LD.CIT(A) CONFIRMING THE DISALLOWANCE OF EXEMPTION . THE DECISION OF THE LD.CIT(A) WAS ALSO AFFIRMED BY THE ITAT . 3. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S. 271(1) (C) OF THE ACT AND PASSED ORDER LEVYING PENALTY FOR FURNISHING INACCURATE PARTICULARS BY THE ASSESSEE AND FOR CONCEALING THE INCOME LIABLE TO TAX. THE ASSESSING OFFICER O BSERVED THAT AS HELD BY THE AHMADABAD BENCH IN THE CASE OF LEENA J. SHAH V. ACIT [6 SOT 206] EXEMPTION CLAIMED ON ANY ACTIVITIES OUTSIDE INDIA ARE NOT ALLOWABLE. THEREFORE, SINCE ASSESSEE MADE INVESTMENTS IN RESIDENTIAL HOUSE OUTSIDE INDIA AND CLAIMED EXE MPTION U/S. 54F THE SAME IS NOT ALLOWABLE. 4. THE LD.CIT(A) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND TAKING NOTE OF THE DECISION OF THE BANGALORE BENCH OF TH E TRIBUNAL IN THE CASE OF VINAY MISHRA V. ACIT [150 TTJ 246] WHEREIN ON IDENTICAL SET OF FACTS , CLAIM FOR EXEMPTION U/S. 54F WAS ALLOWED ON A RESIDENTIAL PROPERTY PURCHASED OUTSIDE INDIA. HE CONCLUDED THAT THE ISSUE INVOLVED IS A SUBSTANTIAL QUESTION OF LAW AND PENALTY SHOULD NOT BE LEVIED. HE ALSO RELIED ON THE DECISION OF THE HON'BLE SUPREME COU RT IN THE CASE OF CIT V. 3 ITA NO.1198/MUM/2016 (A.Y: 2008 - 09) SHRI FARHAD JAMSHED BATLIWALA RELIANCE PETRO PRODUCTS (P.) LTD. [ 322 ITR 158] IN DELETING THE PENALTY. THE LD.CIT(A) ALSO OBSERVED THAT , THERE IS NO FINDING OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT THE SUBMISSIONS MADE DURING THE ASSESSMENT PROCEEDINGS WERE FOUND TO BE FALSE, FABRICATED OR BOGUS AND THEREFORE DISALLOWANCE OF CLAIM U/S. 54 F ITSELF WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OR CONCEALME NT OF INCOME. 5. LD. COUNSEL FOR THE ASSESSEE STRONGLY RELIED ON THE ORDERS OF THE LD.CIT(A). LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT , AT THE TIME OF FILING OF RETURN I.E. 25.03.2009 THE DECISION OF THE JURIS DICTIONAL MUMBAI TRIBUNAL IN THE CASE OF PREMA P. SHAH V. ITO [1 00 ITD 60 ] WHICH WAS DECIDED ON 29.11.2005 WAS VERY MUCH AVAILABLE AS ON THE DATE OF INVESTME NT AND CLAIM, WHERE EXEMPTION WAS ALLOWED ON THE INVESTMENT MADE IN A RESIDENTIAL PROPERTY OUTSIDE INDIA. THEREFORE, HE SUBMITTED THAT THE ISSUE WAS HIGHLY DEBATABLE AND THERE IS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS IN MAKING A CLAIM BY THE ASSESSEE FOR EXEMPTION U/S. 54F ON A RESIDENTIAL PROPERTY WHI CH WAS ACQUIRED OUTSIDE INDIA. 6. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT THE DECISION OF THE AHMADABAD BENCH IN THE CASE OF LEENA J. SHAH V. ACIT (SUPRA) WHICH WAS RELIED ON BY THE TRIBUNAL IN QUANTUM PROCEEDINGS IN SUSTAINING THE DISALLOWANCE U/S. 54F IS REVERED BY THE HON'BLE GUJARAT HIGH COURT 4 ITA NO.1198/MUM/2016 (A.Y: 2008 - 09) SHRI FARHAD JAMSHED BATLIWALA SUBSEQUENTLY ALLOWING THE CLAIM FOR EXEMPTION U/S. 54 IN A PR OPERTY PURCHASED OUTSIDE INDIA. 7. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT THE PROV ISION OF SECTION 54 WERE NOW AMENDED BY FINANCE (NO.2) ACT, 2014 TO RESTRICT THE EXEMPTION ONLY FOR THE INVESTMENTS MADE WITHIN INDIA. THEREFORE, IT IS SUBMITTED THAT THE ISSUE AS TO WHETHER THE ASSESSEE IS ENTITLED FOR EXEMPTION U/S. 54F WAS DEBATABLE AND THERE IS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS. 8. LD. COUNSEL FOR THE ASSESSEE FURTHER PLACED RELIANCE ON THE DECISION OF THE CIT V. NAYAN BUILDERS & DEVELOPERS [ 368 ITR 722] AND SUBMITTED THAT WHEN THE HON'BLE HIGH COURT ADMITTED SUBSTANTIAL QUESTION OF LAW IN RESPECT OF WHICH PENALTY LEVIED , IMPUGNED ORDER WHERE PENALTY WAS LEVI ED IS LIABLE TO BE DELETED. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT IN THE ASSESSEES OWN CASE AN APPEAL FILED BEFORE THE HON'BLE BOMBAY HIGH COURT WAS ADMITTED ON 19.01.20015 AND SINCE THE QUESTION OF LAW WAS ADMITTED BY THE HIGH COURT THE IMPUGNED PENALTY WITH REFERENCE TO SUCH QUE STION OF LAW HAS TO BE DELETED. 9. LD. DR ON THE OTHER HAND, STRONGLY PLACED RELIANCE ON THE O RDER OF THE ASSESSING OFFICER. 5 ITA NO.1198/MUM/2016 (A.Y: 2008 - 09) SHRI FARHAD JAMSHED BATLIWALA 10. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IN THIS CASE THE PENALTY WAS LEVIED FOR THE DISALLOWANCE MADE U/S. 54F OF THE ACT IN THE QUANTUM PROCEEDINGS. THE EXEMPTION WAS DENIED TO THE ASSESSEE FOR THE REASON THAT THE INVESTMENT WAS MAD E OUTSIDE INDIA. THE EXEMPTION WA S DENIED ONLY FOR THIS SOLE REASON AND NOTHING HAS BEEN BROUGHT ON RECORD TO SUGGEST THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OR CONCEALED HIS INCOME , EXCEPT FOR DENI AL OF EXEMPTION U/S. 54F WHICH IS MERELY BASED ON DIFFERENCE OF OPINION. TH E TRIBUNAL SUSTAINED THE DISALLOWANCE RELYING ON THE DECISION OF THE AHMADABAD BENCH IN THE CASE OF LEENA J. SHAH V. ACIT (SUPRA) WHICH WAS SUBSEQUENTLY R EVERSED BY THE HON'BLE GUJARAT HIGH COURT ALLOWING THE CLAIM OF THE ASSESSEE. 11. WE ALSO NOTICE THAT THE DECISION OF MUMBAI BENCH OF ITAT IN THE CASE OF PREMA P. SHAH V. I TO (SUPRA) WAS VERY MUCH AVAILABLE WHEN THE RETURN OF INCOME WAS FILED BY THE ASSESSEE BASED ON WHICH CLAIM W AS MADE FOR EXEMPTION . THE BOMBAY BENCH ALLOWED THE EXEMPTION ON THE INVESTMENT MADE OUTSIDE INDIA. WE FIND THAT THE ISSUE IS A DEBATABLE ONE AND VARIOUS COURTS HAVE TAKEN DECISION IN FAVOUR OF THE ASSESSEE AND AS WELL AS AGAINST T HE ASSESSEE. THE HON'BLE SUPREME COURT IN THE CASE OF CIT V. RELIANCE PETRO PRODUCTS (P.) LTD. (SUPRA) HELD THAT , A MERE MAKING 6 ITA NO.1198/MUM/2016 (A.Y: 2008 - 09) SHRI FARHAD JAMSHED BATLIWALA OF CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE. 12. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. NAYAN BUILDERS & DEVELOPER S (SUPRA) HELD AS UNDER : - HAVING HEARD MR AHUJA, LEARNED COUNSEL APPEARING ON BEHALF OF THE APPELLANT, WE FIND THAT THIS APPEAL CANNOT BE ENTERTAINED AS IT DOES NOT RAISE ANY SUBSTANTIAL QUESTION OF LAW. THE IMPOSITION OF PENALTY WAS FOUND NOT TO BE JUSTIFIED AND THE APPEAL WAS ALLOWED. AS A PROO F THAT THE PENALTY WAS DEBATABLE AND ARGUABLE ISSUE, THE TRIBUNAL REFERRED TO THE ORDER ON THE ASSESSEE'S APPEAL IN QUANTUM PROCEEDINGS AND THE SUBSTANTIAL QUESTIONS OF LAW WHICH HAVE BEEN FRAMED THEREIN. WE HAVE ALSO PERUSED THAT ORDER DATED SEPTEMBER 27, 2010, ADMITTING INCOME TAX APPEAL NO. 2368 OF 2009. IN OUR VIEW, THERE WAS NO CASE MADE OUT FOR IMPOSITION OF PENALTY AND THE SAME WAS RIGHTLY SET ASIDE. THE APPEAL RAISES NO SUBSTANTIAL QUESTION OF LAW, IT IS DISMISSED. NO COSTS. 13. WE ALSO FIND THAT THE H ON'BLE BOMBAY HIGH COURT HAS TAKEN A SIMILAR VIEW IN THE CASE OF CIT V. M/S. ADVAITA ESTATE DEVELOPMENT PVT. LTD., IN ITA.NO. 1498 OF 2014 DATED 17.02.2017. IN THE CIRCUMSTANCES, RESPECTFULLY FOLLOWING THE ABOVE SAID DECISIONS , WE AFFIRM THE ORDER OF THE LD.CIT(A) IN DELETING THE PENALTY AS THERE IS NO FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME BY THE ASSESSEE AND THE DENIAL OF EXEMPTION U/S. 54F IS MERELY ON THE BASIS OF DIFFERENCE OF OPINION. 14. IN THE RESULT, APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 27 TH JUNE , 2018 . SD/ - SD/ - ( N. K. PRADHAN ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 27 / 06 / 2018 GIRIDHAR , S R. PS 7 ITA NO.1198/MUM/2016 (A.Y: 2008 - 09) SHRI FARHAD JAMSHED BATLIWALA COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, (ASSTT. REGISTRAR) ITAT, MUM