Shri Dhansukhbhai G. Shah, (HUF), Vapi V. The ACIT, Vapi Circle, Vapi

ITA 1237/AHD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8527 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-07-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 25-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Keywords: Cost of acquisition; Fair market value

Judgement Text

ITA NO. 1 2 3 7 /AHD/ 201 4 ASSESSMENT YEAR : 20 0 6 - 07 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR , AM AND MAHAVIR PRASAD , JM] ITA NO. 1 2 3 7 / AHD / 2 0 1 4 ASSESSMENT YEAR: 20 0 6 - 07 DHANSUKHBHAI G SHAH (HUF), ....... ...........APPELLANT NEAR CUSTOMS OFFICE, V API DAMAN ROAD, VAPI. [PAN : A APHS 6063 O ] VS. ASSISTANT COMMISSIONER OF INCOME TAX, VAPI CIRCLE, VAPI. ............................RESPONDENT APPEARANCES BY: HARDIK VORA FOR THE APPELLANT V.K. SINGH FOR THE RESPONDENT D ATE OF C ONCLUDING THE HEARING : 12 .07. 2017 DATE OF PRONOUNCING THE ORDER : 19 .09 .2017 O R D E R PER PRAMOD KUMAR, AM: 1. THIS APPEAL, FILED BY THE ASSESSEE AGAINST LEARNED CIT(A) S ORDER DATED 13 TH MARCH, 2014, IN THE MATTER OF PENALTY UN DER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 , FOR THE ASSESSMENT YEAR 2006 - 07 . T HE GRIEVANCES RAISED ARE AS FOLLOWS : - 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING PENALTY U/S.271(1)(C) OF THE ACT OF RS.5,87,330/ - . 2. IT IS PRAYED THAT A BOVE PENALTY LEVIED BY ASSESSING OFFICER AND CONFIRMED BY COMMISSIONER OF INCOME TAX ( A PPEALS) MAY PLEASE BE DELETED. 2. TO ADJUDICATE ON THE ABOVE GRIEVANC ES, A FEW MATERIAL FACTS NEED T O BE T A KEN NOTE OF. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER ITA NO. 1 2 3 7 /AHD/ 201 4 ASSESSMENT YEAR : 20 0 6 - 07 PAGE 2 OF 3 NOTICED THAT THE FAIR MARKET VALUE A S ON 01.04.1981, IN RESPECT OF A PIECE OF LAND SOLD BY THE ASSESSEE, W AS T AKEN AT RS.8,28,78 0/ - BUT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE THE SAME WITH EVIDENCES OF SALE INSTANCES . THE ASSESSING O FFICER THUS SUBSTITUTED THE FAIR MARKET VALUE AS ON 01.04.1981, ON THE BASIS OF COMPARABLE SALE INSTANCES, AT RS.2,82,038/ - . THE TAXABLE CAPITAL G AINS WERE, ACCORDINGLY, RECOMPUTED. IT WAS IN THIS BACKDROP THAT AS AGAINST RETURNED TAXABLE CAPITAL GAIN OF RS.16,00,000/ - THE ASSESSING OFFICER BROUGHT TO TAX CAPITAL GAINS AT RS.60,98,301/ - . THE MATTER DID NOT REST THERE. THE ASSESSING O FFICER ALSO I MPOSED THE CONCEALMENT PENALTY UNDER SECTION 271(1)(C) WHICH HAS BEEN CONFIRMED BY THE LEARNED CIT(A). THE ASSESSEE IS IN FURTHER APPEAL BEFORE ME. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 4. WE FIND THAT THE ONLY BASIS OF FAIR MARKET VALUE OF LAND AS ON 01.04.1981 IS COMPARABLE SALE INSTANCES REGISTERE D WITH THE AUTHORITIES. IT IS A WELL KNOWN FACT THAT AT THAT POINT OF TIME, I.E. LATE S EVENTIES AND EARLY EIGHTIES, USE OF UNACCOUNTED MONIES WAS SO RAMPANT IN REAL ESTATE TRANSACTIONS THAT REGISTRATION VALUE SELDOM PROVIDED SAFE AND REASONABLE BASIS OF REAL ESTATE. IN THE CASE OF DILIP N. SHROFF VS . JCIT [(2007 ) 291 ITR 519 (SC)], HON BLE SUPREME COURT WAS D E ALING WITH A CASE IN WHICH FAIR MARKET VALUE AS ON 01.04.1981 , AS PER REGISTRAR S RECORDS , OF A PROPERTY WAS RS.1,44,92,907/ - BUT THE MARKET REPORTS, BASED ON RATES PUBLISHED IN ACCOMMODATION TIMES WAS RS.2,52,00,000/ - . THE HUGE VARI ATIONS BETWEEN VALUE AT WHICH SAL E S WERE RECORDED AND THE MARKET PRICES WERE THUS , MORE OFTEN THAN NOT, A GROUND REALITY. THERE IS NOTHING MORE THAN SALE INSTANCES TO SUBSTANTIATE THE STAND TAKEN BY THE ASSESSING O FFICER. WHILE THESE SALE INSTANCES MAY O R MAY NOT BE SUFFICIENT BASIS FOR MAKING QUANTUM ADDITION IN THE COST OF ACQUISITION, WHICH IS ANYWAY NOT OUR CONCERN AT PRESENT. THESE INPUTS PER SE CANNOT CONSTITUTE LEGALLY SUSTAINABLE FOUNDATION FOR THE IMPUGNED CONCEALMENT PENALTY UNDER SECTION 271(1 )(C) . IN THIS BACKDROP, WE ARE OF THE C ONSIDERED VIEW T HAT IMPUGNED PENALTY, WHICH RESTS ON THE RELIABILITY OF REGISTRATION VALUE OF PROPERTY AS ON 01.04.1981, WAS NOT REALLY JUSTIFIED. WE , THEREFORE, DELETE THE IMPUGNED PENALTY. ITA NO. 1 2 3 7 /AHD/ 201 4 ASSESSMENT YEAR : 20 0 6 - 07 PAGE 3 OF 3 5 . IN THE RESULT, THE APPEAL IS ALLOWED . PRONOUNCED IN THE OPEN COURT TODAY ON THE 19 TH DAY OF SEPTEMBER , 2017. SD/ - SD/ - MAHAVIR PRASAD PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 19 TH DAY OF SEPTEMBER , 2017 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUN AL AHMEDABAD BENCHES, AHMEDABAD