GOPAL RAMESHKUMAR VAZIR, MUMBAI V. ITO WD 19(2)(4), MUMBAI

ITA 1221/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92504 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2015
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 27-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 12-02-2013
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL G , BENCH MUMBAI . . , , BEFORE : SHRI R.C.SHARMA, AM & SHRI VIJAY PAL RAO , JM ./ ITA NO. 1221 / MUM/20 1 3 ( / ASSESSMENT YEAR : 20 0 9 - 10 ) SHRI GOPAL RAMESHKUMAR VAZIR, 1 ST FLOOR, ASHIANA BUILDING, LINKING ROAD, NR. GRINDLAYS, SANTACRUZ (W), MUMBAI - 400054 VS. ITO, 19(2)(3), MUMBAI ./ ./ PAN/GIR NO . : A A BPV 1172 D ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI RAKESH JOSHI /REVENUE BY : SHRI LOVE KUMAR / DATE OF HEARING : 27 / 0 4 /201 5 / DATE OF PRONOUNCEMENT : 08/05 / 2015 / O R D E R PER R.C.SHARMA ( A .M.) : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 3 3 , MUMBAI , DATED 12 - 11 - 2012 , FOR THE ASSESSMENT YEAR 20 0 9 - 10 , IN THE MATTER OF IMPOSITION OF PENAL TY U /S. 271(1)(C) OF THE I.T.ACT AMOUNTING TO RS.3,50,000/ - . 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF A RE THAT T HE ASSESSEE E - FILED RETURN OF INCOME ON 2/3/2010 DECLARING TO TAL INCOME OF RS.1) 43)294. THE CASE WAS SUBSEQUENTLY SELECTED FOR SCR UTINY AND REGULAR ASSESSMENT U/ S. 143(3) WAS COMPLETED ON 24.10.2011) WHEREIN THE PART OF EXEMPTION CLAIMED U/S.54 WAS DENIED IN RESPECT OF THE COST OF CONSTRUCTION AMOUNTING TO RS.15, 17 , 730/ - . PENALTY ITA NO. 1221 /20 1 3 2 PROCEEDINGS U/ S. 271( 1 )(C) WERE INITI ATED VIDE ISSUE OF NOTICE U/ S. 274 R. W.S. 271 (L)(C) DATED 24.10.2011. DURING THE YEAR ASSESSEE HAD SOLD FLAT NO.702 IN MERIDIAN. APARTMEN TS FOR A CONSIDERATION OF RS.28, 56, 360/ - AND HAD WORKED OUT THE LONG TERM CAPITAL GAIN AS UNDER: SALE CONSIDERATION 28,56,360 LESS: EXEMPTION U/S.54 INVESTMENT IN DAPOLI PROPERTY TAMASTIRTI, DAPOLI HOUSE NO.16 DT.15/01/2009 13,60,000 CONSTRUCTION COST 15,18,300 28,78,300 28,56,360 NIL DURING THE COURS E OF THE ASSESSMENT PROCEEDIN GS THE ASSESSEE WAS ASKED TO PRODUCE RELEVANT BILLS IN RESPECT OF THE COST INCURRED TO WA RDS CONSTRUCTION. IN RESPONSE THE ASSESSEE FILED A LETTER STATING THEREIN THAT THE WORK OF IMPROVEMENT TO THE RESIDENTIAL HOUSE WAS MANAGED AND SUPERVISED BY ASSESSEE'S LATE FATHER SHRI RAMESH N. VAZIR, WHO EXPIRED ON 14/10/2010 AND AS HIS FATHER IS NO MORE, HE WAS UNABLE TO LOCATE RELEVANT BILLS TO SUBSTANTIATE THE CLAIM FOR COST OF CONSTRUCTION/IMPROVEMENT. A REVISED COMPUTATION OF CAPITAL GAIN WAS ALSO FILED A SUNDER : - SALE CONSIDERATION 28,56,360 LESS: EXEMPTION U/S.54 INVESTMENT IN DAPOLI PROPERTY TAMASTIRTI, DAPOLI HOUSE NO.16 DT.15/01/2009 13,38,630 1 5,17 , 730 HOWEVER, THE AO DID NOT CONVINCE WITH THE ASSESSEES EXPLANATION AND IMPOSED PENALTY OF RS. 3, 50,000/ - U/S.271(1)(C). ITA NO. 1221 /20 1 3 3 4. BY THE IMPUGNED ORDER THE CIT(A ) CONFIRMED THE ACTION OF THE AO. IT WAS ARGUED BY THE LD. AR THAT SOME NEW WORK WAS CARRIED OUT IN THE HOUSE, DETAILS OF WHICH COULD NOT BE FURNISHED DUE TO THE FACT THAT CONSTRUCTION WAS TAKEN C ARE OF BY HIS FATHER, WHO WAS NO MORE. THERE WAS NO CONCEALMENT OF INCOME AND THE AMOUNT OF REVISED CAPITAL GAINS WAS SURRENDERED DURING THE COURSE OF ASSESSMENT ITSELF. THEREFORE, NO PENALTY WAS IMPOSABLE U/S.271(1)(C). FOR THIS PURPOSE, RELIANCE WAS PLAC ED ON THE DECISION OF HON BLE SUPREME COURT REPORTED IN 251 ITR 1, ON THE DECISION OF HONBLE BOMBAY HIGH COURT REPORTED IN 271 ITR 278 & ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT REPORTED IN 246 ITR 216 . 5. ON THE OTHER HAND, LD. DR RELIED ON THE OR DERS OF THE AUTHORITIES BELOW . 6. WE HAVE CONSIDERED RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT ASSESSEE ACQUIRED A RESIDENTIAL HOUSE DURING THE YEAR UNDER CONSIDERATION. SALE PROCEEDS WAS UTILIZED FOR ACQUIRING A NEW HOUSE. THEREAFTER HE UNDERTOOK SOME IMPROVEMENT IN THE SAID RESIDENTIAL HOUSE. THE WORK OF IMPROVEMENT OF THIS RESIDENTIAL HOUSE WAS MANAGED AND SUPERVISED BY ASSESSEES FATHER, WHO EXPIRED ON 14 - 10 - 2010 DUE TO CARDIAC ARREST. SINCE ASSESSEES FATHER WAS NO MORE, ASSESSEE COULD NOT LOCATE RELEVANT IMPROVEMENT COST BILLS TO SUBSTANTIATE THE CLAIM FOR COST OF IMPROVEMENTS. DURING THE COURSE OF ASSESSMENT ITSELF, ASSESSEE AT ITS OWN VOLUNTARILY SUBMITTED REVISED COMPUTATION OF INCO ME BEFORE THE AO WHEREIN CLAIM OF EXEMPTION U/S.54 WAS REVISED AND DUE TAXES WERE ALSO PAID BY THE ASSESSEE AT ITS OWN BEFORE COMPLETION OF ASSESSMENT. THIS VOLUNTARY ITA NO. 1221 /20 1 3 4 DECLARATION WAS MADE IN THE MONTH OF AUGUST, 2011 AND DUE TAXES WAS ALSO PAID ON 25 - 8 - 201 1 B EFORE PASSING OF THE ORDER BY THE AO U/S.143(3) ON 24 - 10 - 2011. IT IS NOT THE CASE OF CONCEALMENT OF PARTICULARS OF INCOME BUT MERELY BECAUSE OF REDUCTION IN THE CLAIM MADE U/S.54 BY THE ASSESSEE HIMSELF AT ITS OWN DURING THE COURSE OF ASSESSMENT ITSELF . T HE FACT THAT ASSESSEE HAS INCURRED IMPROVEMENT EXPENDITURE OF RS. 13,39,670/ - IS EVIDENT AS PER THE BALANCE SHEET FILED ALONG WITH THE RETURN, BUT THE SAME COULD NOT BE SUPPORTED BY DOCUMENTS BECAUSE OF DEATH OF FATHER OF THE ASSESSEE. CONSIDERING THE PR OPOSITION OF LAW LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF 251 ITR 1 AND KEEPING IN VIEW TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY MERIT FOR IMPOSITION OF PENALTY U/S.271(1)(C) OF THE ACT. 7 . IN THE RESULT, APPEAL OF T HE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 08/05/ 201 5 . SD/ - SD/ - ( ) ( VIJAY PAL RAO ) ( . . ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 08/05 /201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//