SHRI VARUN KUMAR BANSAL, ALWAR V. INCOME TAX OFFICER, WARD-2-2, ALWAR

ITA 1295/JPR/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9965 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-03-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 19-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANMOHAN KANDPAL JCIT DHK
• Keywords: Sale consideration of property below Jantri Value; Capital Gains
• Section: 271(1)(c); 50C

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA , ACCOUNTANT MEMBER VK;DJ VIHY LA -@ ITA NO. 1295/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2011-12 VARUN KUMAR BANSAL, C/O- K.L. DATTA & CO., CHARTERED ACCOUNTANTS, VASHISTHA PLAZA, 2, MANU MARG, ALWAR. CUKE VS. I.T.O., WARD 2(2), ALWAR. LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: AGAPB 5284 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI MANMOHAN KANDPAL (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 22/11/2019 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 03/01/2020 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT(A), ALWAR DATED 27/09/2018 FOR THE A.Y. 2011-12 IN THE MATTER OF IMPOSITION OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ONLY ISSUE INVOLVED IN THE APPEAL IS CONFIRMING THE PENALTY OF RS. 1,82,700/- BY THE LD. CIT(A) U/S 271(1)(C) OF THE ACT. ITA 1295/JP/2018 VARUN KUMAR BANSAL VS ITO 2 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE DERIVED INCOME FROM PROFESSIONAL RECEIPTS AND LONG TERM CAPITAL GAINS. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE A.O. MADE ADDITION ON ACCOUNT OF INTEREST INCOME OF RS. 12,482/- AND LONG TERM CAPITAL GAIN OF RS. 45,41,132/-. IN THE APPEAL FILED BEFORE THE LD. CIT(A), THE ADDITION ON ACCOUNT OF CAPITAL GAIN WAS REDUCED TO RS. 8,74,264/-. THE A.O. LEVIED PENALTY IN RESPECT OF INTEREST INCOME OF RS. 12,482/- AND LONG TERM CAPITAL GAIN OF RS. 8,74,264/-. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE PENALTY SO LEVIED, AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE ITAT. 4. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT THE ADDITION ON ACCOUNT OF CAPITAL GAIN WAS MADE BY THE A.O. BY INVOKING PROVISIONS OF SECTION 50C OF THE ACT ON SALE OF AGRICULTURAL LAND. THERE ARE VARIOUS JUDICIAL PRONOUNCEMENTS ACCORDING TO WHICH NO PENALTY CAN BE IMPOSED IN RESPECT OF ADDITION MADE BY INVOKING PROVISIONS OF SECTION 50C OF THE ACT. I FOUND THAT THE ASSESSEE HAS DISCLOSED ALL THE RELEVANT FACTS OF SALE OF PROPERTY TO THE DEPARTMENT. THE ASSESSEE HAS OFFERED CAPITAL GAIN FOR TAXATION. BY INVOKING DEEMING PROVISIONS OF SECTION 50C OF THE ACT, THE A.O. MADE ADDITION. IN THE CASE OF SHRI JABAR ITA 1295/JP/2018 VARUN KUMAR BANSAL VS ITO 3 SINGH VS. ITO IN ITA NO. 912/JP/2014 ORDER DATED 17.04.2017, THE AO DURING ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE SOLD IMMOVABLE PROPERTY AMOUNTING TO RS. 1,16,71,800/-. THE AO OBSERVED THAT THE ASSESSEE HAD DECLARED SALE CONSIDERATION OF RS. 39 LAKHS AND ACCORDINGLY CALCULATED CAPITAL GAIN THEREON. THE AO HOWEVER ADOPTED THE SALE CONSIDERATION OF RS.1,07,40,030/- ON THE BASIS OF DLC RATE BY INVOKING THE PROVISION OF SECTION 50C AND THEREAFTER, INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) ON THE GROUND OF CONCEALMENT. THUS, THE AO LEVIED PENALTY TILS 271(1)(C) ON THE DIFFERENCE BETWEEN THE STATED SALE CONSIDERATION AND THE DLC RATE ADOPTED BY THE STAMP VALUATION AUTHORITIES. THE ITAT, JAIPUR BENCH, AFTER RELYING ON THE DECISION OF CO-ORDINATE BENCH IN CASE OF ANITA BENIWAL VS. ITO IN ITA NO. 743/JP/2012 AND ALSO ON JUDGEMENT OF THE HON'BLE CALCUTTA HIGH COURT RENDERED IN THE CASE CIT VS. MADAN TEATER LTD.263 CTR 7 DELETED THE PENALTY LEVIED BY HOLDING AS UNDER: 'IN THE PRESENT CASE ALSO, THE FACTS ARE IDENTICAL AS IN THE CASE OF ANITA BENIWAL. IN THIS CASE ALSO THE PENALTY HAS BEEN LEVIED ON THE BASIS THAT THE ACTUAL SALE CONSIDERATION WAS LESSER THAN THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY. THE REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD SUGGESTING THAT THE ASSESSEE HAD RECEIVED ACTUAL CONSIDERATION AS ADOPTED BY THE STAMP VALUATION AUTHORITY. THEREFORE, WE DO NOT SEE ANY REASON FOR TAKING A DIFFERENT VIEW AS ADOPTED BY THE CO-ORDINATE BENCHES OF THIS HON'BLE TRIBUNAL, AT THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. ITA 1295/JP/2018 VARUN KUMAR BANSAL VS ITO 4 MADAN THEATRES LTD. WE THEREFORE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY'. 5. RESPECTFULLY FOLLOWING THE ABOVE JUDICIAL PRONOUNCEMENTS, I DO NOT FIND ANY MERIT WITH RESPECT TO THE PENALTY IMPOSED FOR THE ADDITION MADE U/S 50C OF THE ACT, THEREFORE, I DIRECT THE A.O. TO DELETE THE SAME. 6. WITH REGARD TO LEVY OF PENALTY ON THE INTEREST INCOME, I FOUND THAT DURING THE ASSESSMENT PROCEEDINGS, THE AO FROM THE BANK STATEMENTS OBSERVED THAT THE ASSESSEE HAD NOT DECLARED INTEREST INCOME RECEIVED. THE ASSESSEE ACCEPTED THE SAME AND REQUESTED THE AO TO ADD THE SAME IN THE TOTAL INCOME AS HE HAD INADVERTENTLY FORGOTTEN TO INCLUDE THE SAME. IN THE CASE OF PRICE WATERHOUSE COOPERS (P.) LTD. VS. CIT (2012) 348 ITR 306 (SC), IT WAS HELD THAT WHERE THE ASSESSEE FIRM FILED ITS RETURN OF INCOME ALONG WITH TAX AUDIT REPORT IN WHICH IT WAS INDICATED THAT PROVISION TOWARDS PAYMENT OF GRATUITY WAS NOT ALLOWABLE BUT THE ASSESSEE FAILED TO ADD PROVISION FOR GRATUITY TO ITS TOTAL INCOME, IT IS A CASE OF BONA FIDE AND INADVERTENT ERROR. THE SAME CAN ONLY BE DESCRIBED AS A HUMAN ERROR WHICH WE ALL ARE PRONE TO MAKE. THE ASSESSEE COULD NOT BE HELD GUILTY OF EITHER FURNISHING INACCURATE PARTICULARS OR ATTEMPTING TO CONCEAL ITS INCOME. THEREFORE, IMPOSITION OF PENALTY WAS UNJUSTIFIED. ITA 1295/JP/2018 VARUN KUMAR BANSAL VS ITO 5 7. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE KOLKATA HIGH COURT IN THE CASE OF PCIT VS H.V. WILLIAMS & CO. (2015) 94 CCH 124 (KOL HC). 8. CONSIDERING THE ABOVE JUDICIAL PRONOUNCEMENTS, I DO NOT FIND ANY MERIT IN THE LEVY OF PENALTY WHEREIN DUE TO OVERSIGHT OF THE BANK STATEMENT, THE INTEREST INCOME OF RS. 12,482/- COULD NOT BE INCLUDED IN THE RETURN BUT WAS ACCEPTED AT THE TIME OF ASSESSMENT PROCEEDINGS AND THE ASSESSEE HAS VOLUNTARILY PAID ADDITIONAL TAX ALONGWITH INTEREST ON THE SAME. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03 RD JANUARY, 2020. SD/- JES'K LH 'KEKZ ( RAMESH C SHARMA ) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 03 RD JANUARY, 2020 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI VARUN KUMAR BANSAL, ALWAR. 2. IZR;FKHZ @ THE RESPONDENT- THE I.T.O., WARD 2(2), ALWAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1295/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR