Sh. Satpal Gosain, Ludhiana V. ACIT, Ludhiana

ITA 132/CHANDI/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0685 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 26-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J S KEHLON
• Keywords: Capital asset; Bonafide belief; Revised return; Reassessment proceedings
• Section: 271(1)(c); 133A; 139(5); 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B, CHANDIGARH , !'# $' % & , '( BEFORE: SHRI SANJAY GARG, JM & SMT.ANNAPURNA GUPTA, AM ./ ITA NO.132/CHD/2016 / ASSESSMENT YEAR : 2007-08 SH.SATPAL GOSAIN C/O G.B. AUTO INDUSTRIES (REGD.), C-84, FOCAL POINT, LUDHIANA. THE A.C.I.T., CIRCLEL-1, LUDHIANA. ./PAN NO: ABDPG9952H /APPELLANT /RESPONDENT /ASSESSEE BY : SHRI TEJ MOHAN SINGH, ADV. ! / REVENUE BY : SHRI J.S. KEHLON, SR.DR '# $ /DATE OF HEARING : 14.11.2018 %&'(# /DATE OF PRONOUNCEMENT: 26.11.2018 ') /ORDER PER ANNAPURNA GUPTA, AM : THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, LUDHIANA (IN SHORT CIT(A) DATED 29.1.2 016 PASSED U/S 250 (6) OF THE INCOME TAX ACT, 1961 (IN SHORT REFERRED TO AS ACT), CONFIRMING THE LEVY OF PENAL TY U/S 271(1)(C) OF THE ACT. 2. THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF REASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT A H OUSING SOCIETY CONSISTING OF 95 PRESENT AND EX MLAS OF PUN JAB LEGISLATIVE ASSEMBLY, WAS THE OWNER OF 21.02 ACRE L AND IN VILLAGE KANSAL DISTRICT LUDHIANA. THE SAID HOUSING SOCIETY OF ITA NO.132/CHD/2016 A.Y.2007-08 2 THE MLAS, NAMED AS THE PUNJAB COOPERATIVE HOUSING BUILDINGS SOCIETY LTD., HAD ENTERED INTO A TRIPARTI TE JOINT DEVELOPMENT AGREEMENT WITH M/S HASH BUILDING PVT. L TD, CHANDIGARH AND TATA HOUSING DEVELOPMENT CO. LTD., MUMBAI ,FOR SETTING UP A RESIDENTIAL CUM COMMERCIAL PROJECT CAMELOT. ON PERUSAL OF THE AGREEMENT, THE AO FOUND THAT PUNJAB COOPERATIVE HOUSING BUILDING SOCIETY LTD., W OULD TRANSFER ITS LAND TO TATA HOUSING DEVELOPMENT CO. L TD, MUMBAI IN LIEU OF MONETARY CONSIDERATION AND CONSID ERATION IN KIND. AS PER THE AGREEMENT EACH MEMBER OF THE PU NJAB COOPERATIVE HOUSING BUILDING SOCIETY LTD., HAVING A PLOT OF 500 SQ. YARD IN THE SOCIETY WOULD RECEIVE RS.82,50, 000/- AS MONETARY CONSIDERATION. ACCORDINGLY, A TOTAL MONETA RY CONSIDERATION OF RS.1,06,42,50,000/- WAS RECEIVABLE BY ALL THE INDIVIDUAL MEMBERS OF THE SOCIETY TAKEN TOGETH ER. IN ADDITION TO THIS, AS CONSIDERATION IN KIND EACH SUC H MEMBER (I.E. MEMBERS OWING PLOT OF 500 SQ. YD) WOULD RECEI VE ONE FURNISHED FLAT MEASURING 2250 SQ. FT. TO BE CONSTRU CTED BY M/S TATA HOUSING DEVELOPMENT COMPANY LTD. THE COST OF EACH FURNISHED FLAT @ 4500/- SQ. FT. HAVING AN AREA OF 2250 SQ. FT WAS WORKED OUT TO RS.1,01,25,000/-. THE ASS ESSEE, SH. SATPAL GOSAIN, OWNED A 1000 SQ. YARD LAND IN TH E SOCIETY. AS PER THE AGREEMENT HE WAS ENTITLED FOR F ULL CONSIDERATION COMPRISING RS.1,65,00,000/- AS MONETA RY CONSIDERATION AND TWO FURNISHED FLATS OF 2250 SQ.FT . AS CONSIDERATION IN KIND. THE TOTAL COST OF THESE TWO FURNISHED FLAT CAME TO RS.2,02,50,000/-. SO THE TOTAL CONSIDE RATION ACCORDING TO THE AO WAS AT LEAST RS.3,67,50,000/-. THE ITA NO.132/CHD/2016 A.Y.2007-08 3 ASSESSEE HAD ALSO RECEIVED TWO PAYMENTS OF RS.30 LA C AND RS.36 LAC ALREADY. THEREFORE, THE AO MADE AN ADDITI ON OF RS.3,55,21,070/- TO THE INCOME OF THE ASSESSEE FOR THE IMPUGNED YEAR AND INITIATED PENALTY PROCEEDINGS U/S 271(1) OF THE ACT. 3. DURING THE COURSE OF THE PENALTY PROCEEDINGS, TH E AO ASKED THE ASSESSEE AS TO WHY THE PENALTY MAY NOT BE IMPOSED. THE AR OF THE ASSESSEE REPLIED AS UNDER:- '(A) THAT THE HON'BLE PUNJAB & HARYANA HIGH COURT HAS DIRECTED THAT NO COERCIVE MEASURES SHOULD BE USED. COERCIVE MEASURES INCLUDES PENALTY. AS PER 'THESAURUS.COM' ONLINE DICTIONARY WEBSITE PENALTY HAS BEEN STATED TO BE SYNONYM OF THE WORD COERCIVE MEASURE. (B) THAT IT IS SUBMITTED THAT THE ORDER OF THE WORTHY ITAT- CHANDIGARH BENCH HAS BEEN APPEALED IN PUNJAB & HARAYANA HIGH COURT. (C) THAT THE JOINT DEVELOPMENT AGREEMENT VERY CLEARLY STATES THAT THE SOCIETY WILL BE TRANSFERRING THE LAND ONLY UPON THE RECEIPT OF CONSIDERATION. THE FACT THAT THE LAND ONLY TO THE EXTENT WHICH HAS BEEN TRANSFERRED IN FAVOUR OF THDC, HAS BEEN REGISTERED IN FAVOUR OF THDC AND THE OWNERSHIP OF THE THDC IN RESPECT OF THIS LAND HAS BEEN REGISTERED IN REVENUE RECORDS. THE LAND WHICH HAS NOT BEEN TRANSFERRED TO THDC STANDS IN THE NAME OF SOCIETY TILL DATE IN THE REVENUE RECORDS. THIS IS ENOUGH EVIDENCE THAT OWNERSHIP IN RESPECT OF UNTRANSFORMED LAND LIES WITH THE SOCIETY ONLY AND THE VARIOUS RIGHTS GIVEN UNDER THE JOINT DEVELOPMENT AGREEMENT ARE CONDITIONAL AND NOT ENOUGH TO GIVE THE OWNERSHIP TO THDC HAD POSSESSION AS REFERRED BY THE LD. AO BEEN ANY CRITERIA OF TRANSFER, THE ENTIRE LAND SHOULD HAVE BEEN TRANSFERRED IN THE NAME OF THDC IN THE REVENUE RECORDS. (D) THE ASSESSEE ALSO RELIED UPON CERTAIN JUDICIAL PRONOUNCEMENTS IN HIS FAVOUR. ITA NO.132/CHD/2016 A.Y.2007-08 4 BUT THE AO WAS NOT SATISFIED WITH THE REPLY OF THE ASSESSEE AND IMPOSED PENALTY AMOUNTING TO RS.79,72,552/- U/S 271(1)(C) OF THE ACT FOR CONCEAL ING HIS INCOME. 4. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD.C IT(A) WHO HELD THAT HON'BLE PUNJAB & HARYANA HIGH COURT I N THE CASE OF C.S.ATWAL VS. CIT & ANOTHER IN ITS ORDER DA TED 22.7.2015 HAD HELD THAT THE CAPITAL GAINS TAX WAS N OT PAYABLE ON THE CONSIDERATION WHICH HAD NOT BEEN REC EIVED DURING THE YEAR AND WHICH STOOD CANCELLED AND INCAP ABLE OF PERFORMANCE AT PRESENT DUE TO VARIOUS ORDERS OF THE HON'BLE SUPREME COURT AND THE HON'BLE HIGH COURT IN PILS FI LED. FOLLOWING THE SAME THE LD.CIT(A) HELD THAT THE ASSE SSEE WAS LIABLE TO PAY TAX ONLY ON THE CAPITAL GAINS RELATIN G TO THE AMOUNT RECEIVED BY HIM.CONSEQUENTLY HE HELD THAT NO PENALTY WAS LEVIABLE ON THE CAPITAL GAINS WHICH WAS NOT ACTUALLY RECEIVED BY THE ASSESSEE DURING THE RELEVA NT ASSESSMENT YEAR, HOWEVER, WITH REGARD TO THE AMOUNT RECEIVED DURING THE YEAR THE LD.CIT(A) UPHELD THE L EVY OF PENALTY STATING THAT THE ASSESSEE HAD DISCLOSED THE SAID AMOUNT IN ITS RETURN FILED IN RESPONSE TO NOTICE U/ S 148 ONLY AFTER DETECTION BY THE DEPARTMENT AND NOT SUO MOTTO. THE RELEVANT FINDINGS OF THE LD.CIT(A) AT PARA 2.4 OF HIS ORDER ARE AS UNDER: 2.4 I HAVE CONSIDERED THE FACTS OF THE CASE, THE B ASIS OF THE PENALTY IMPOSED BY THE ASSESSING OFFICER AND ARGUMENTS OF THE AR DURING THE COURSE OF THE PENALT Y AS WELL AS THE APPELLATE PROCEEDINGS. THE HON'BLE PUNJ AB & HARYANA HIGH COURT IN THE CASE OF C.S. ATWAL VS. CIT AND ANR. IN ITA NO.200, 201, 232 TO 25S, 271 TO 273, 283 TO ITA NO.132/CHD/2016 A.Y.2007-08 5 298, 303 TO 308, 310 TO 316, 332 TO 334, 356 TO 358 AND 361 OF 2013, 10 TO 16, 25, 26, 73, 74, 90, 110, 136 , 191, 192, 253, 254, 278 AND 398 OF 2014 VIDE ORDER DATED 22.07.2015 HAS HELD AS UNDER: 'AS PER THE ORDER OF THE HON'BLE PUNJAB & HARYANA HIGH COURT ' IT WAS SUBMITTED BY LEARNED COUNSEL FO R THE ASSESSEE-APPELLANT THAT WHATEVER AMOUNT WAS RECEIVE D FROM THE DEVELOPER, CAPITAL GAINS TAX HAS ALREADY BEEN PAID ON THAT AND SALE DEEDS HAVE ALSO BEEN EXECUTED. IN VIEW OF CANCELLATION OF JDA DATED 25.02.2007, NO FURTHER AM OUNT HAS BEEN RECEIVED AND NO ACTION THEREON HAS BEEN TAKEN. IT WAS URGED THAT AS AND WHEN ANY AMOUNT IS RECEIVED, CAPI TAL GAINS TAX SHALL BE DISCHARGED THEREON IN ACCORDANCE WITH LAW. IN VIEW OF THE AFORESAID STAND, WHILE DISPOSING OF THE APPE ALS, WE OBSERVE THAT THE ASSESSEE APPELLANTS SHALL REMAIN BOUND BY THEIR SAID STAND.' THEREFORE, AS PER THE SAID ORDER OF THE HON'BLE JURISDICTIONAL HIGH COURT, THE APPELLANT WAS NOT LIAB LE TO PAY CAPITAL GAINS TAX ON THE CONSIDERATION WHICH HAD NOT BEEN RECEIVED DURING THE YEAR AND WHICH STOOD CANCELLED A ND INCAPABLE OF PERFORMANCE AT PRESENT DUE TO VARIOUS ORDERS OF THE HON'BLE SUPREME COURT AND THE HON'BLE HIGH COUR T IN PILS. THEREFORE, THE APPELLANT WAS LIABLE TO PAY CAPITAL GAINS TAX ONLY ON THE AMOUNT RECEIVED BY HIM. HENCE, IN VIEW OF THE SAID ORDER OF THE HON'BLE JURISDICTIONAL HIGH COURT, N O PENALTY UNDER SEC271(L)(C) CAN BE LEVIED ON THE AMOUNT OF CAPIT AL GAINS WHICH WAS NOT ACTUALLY RECEIVED BY THE APPELLANT DUR ING THE RELEVANT ASSESSMENT YEAR. HOWEVER, THE APPELLANT HAS RECEIVED AN AMOUNT OF RS.24,00,000/- DURING THE YEAR UNDER CONSIDERATION ON WHICH CAPITAL GAINS TAX WAS TO BE IMPOSED. THE ORIGINAL RETUR N OF INCOME WAS FILED ON 03.12.200/- IN WHICH INCOME FROM CAPIT AL GAINS WAS SHOWN AS NIL. NOTICE U/S 148 WAS ISSUED ON 04 01.2010 AND SERVED ON THE ASSESSEE ON 07.01.2010. IN RESPONSE TO THE SAME, THE APPELLANT FILED A REVISED RE TURN U/S 148 ON 02.02.2010 WHICH ALSO INCLUDED INCOME FROM CAPITAL GAINS AMOUNTING TO RS.22,00,670/- AFTER APP LYING INDEXATION. THE ASSESSING OFFICER REJECTED THIS RETU RN BY HOLDING THAT THE REVISED RETURN FILED BY THE ASSESSE E WAS BEYOND TIME PRESCRIBED U/S 139(5) AND THEREFORE WAS T REATED AS NON-EST. THE CIT (APPEALS) IN THE QUANTUM ORDER FOR THE YEAR UNDER CONSIDERATION HAS HELD THAT THE RETURN FI LED IN RESPONSE TO NOTICE U/S 148 WAS VALID. HOWEVER, THE FA CT REMAINS THAT THE SAME WAS FURNISHED ONLY AFTER DETE CTION BY THE DEPARTMENT AND NOT SUO MOTTO, THE SAID RETURN IS THUS NOT VOLUNTARY BUT ONLY AFTER NOTICE U/S 148 WAS ISSU ED' BY THE DEPARTMENT. THEREFORE, THERE IS NO FORCE IN THE A PPELLANT'S PLEA THAT THE CAPITAL GAINS WERE RETURNED BEFORE DETE CTION BY THE DEPARTMENT. FURTHER, THE APPELLANT IS ADVISED BY EXPERTS/C.AS IN INCOME TAX MATTERS AND IS EXPECTED T O BE AWARE OF THE PROVISIONS OF LAW AND THEREFORE THE PL EA THAT HE WAS VERBALLY TOLD BY OFFICIALS OF TATA HOUSING DEVE LOPMENT CO. LTD. & M/S HASH BUILDERS PVT LTD. THAT THE MONEY PAID ITA NO.132/CHD/2016 A.Y.2007-08 6 WAS ADVANCE MONEY IN CONTEMPLATION OF SALE AND THERE FORE THE SAID AMOUNT WAS NOT INCLUDED IN HIS RETURN, IS NO T ACCEPTABLE. THE CASES RELIED UPON BY THE AR ARE DISTINGUISHABLE ON FACTS. THE AR HAS RELIED ON THE DECISION OF THE JUR ISDICTIONAL HON'BLE HIGH-COURT IN THE CASE OF CIT VS. SURAJ BHAN (2 007) 159 TAXMANN 26 WHEREIN THE ASSESSEE HAD FILED REVIS ED RETURN SHOWING HIGHER INCOME AND EXPLAINED THAT THE S AME WAS DONE TO BUY PEACE OF MIND AND TO AVOID LITIGATI ON AND IT WAS HELD THAT PENALTY CANNOT BE IMPOSED MERELY ON AC COUNT OF SUBSEQUENTLY DECLARED HIGHER INCOME. HOWEVER, IN TH E CASE UNDER CONSIDERATION NOTICE U/S 148 WAS ISSUED ON 04.01.2010 AND THE REVISED RETURN FILED ON 02.02.2010 WAS TREATED AS NON-EST RETURN SINCE IT WAS FILED BEYOND T HE TIME PRESCRIBED U/S 139(5) AND THE ASSESSING OFFICER HAS CATEGORICALLY HELD THAT THE ASSESSEE HAS FAILED TO DIS CLOSE THE PROFITS OR GAINS FROM THE TRANSFER OF CAPITAL ASS ETS PRIOR TO DETECTION BY THE DEPARTMENT. ALTHOUGH THE CIT (A PPEALS) HELD IN THE QUANTUM ORDER THAT THE RETURN WAS VALID BUT THE FACT REMAINS THAT IT WAS FILED AFTER DETECTION BY TH E DEPARTMENT. THE AR HAS FURTHER RELIED ON THE CASE OF ITO VS. CHATRABHUJ HINDUJI SONI OF THE HON'BLE ITAT AHMADABA D IN ITA NO. 620/AHD/2008 WHEREIN THE REVISED RETURN FILED IN PURSUANCE OF NOTICE U/S 148 WHEREIN INCOME WAS SURRENDERED WAS REGULARIZED BY THE REVENUE AND THE ASSESSING OFFICER HAD FAILED TO MAKE ANY OBJECTION THAT THE INCOME DECLARED IN THE REVISED RETURN OR ITS EXPLAN ATION WAS NOT BONAFIDE WHEREAS IN THE INSTANT CASE THE ASSES SING OFFICER HAS DECLARED THE REVISED RETURN AS NON-EST AND HAS RECORDED THAT THE ASSESSEE HAD FAILED TO DISCLOSE T HE SAID INCOME IN ITS RETURN OF INCOME AND THAT THE SAME WAS N OT OFFERED FOR TAX PRIOR TO DETECTION BY THE DEPARTMENT. THE AR HAS ALSO PLACED RELIANCE ON THE CASE OF LATE N.R. P ALANIVEL VS CIT(2014) 90 CCH 0104 WHEREIN THE ASSESSEE WAS OPERATING TRANSPORT BUS AND SURVEY WAS CONDUCTED U/ S 133A . FURTHER, IN THE SAID CASE, NOTICE WAS ISSUED U /S 148 AND THE REVISED RETURN FILED WAS ACCEPTED BY THE ASSE SSING OFFICER WITHOUT ANY ADDITION AND THE EXPLANATION MAD E ON THE BASIS OF EXPLANATION B TO SEC271(L)(C) WAS NOT CONSIDERED BY THE REVENUE AND THEREFORE THE ORDER OF HON'BLE IT AT CONFIRMING THE PENALTY PROCEEDINGS WAS SET-ASIDE WHER EAS THE FACTS IN THE INSTANT CASE ARE DISTINGUISHABLE A S DISCUSSED EARLIER. IT HAS BEEN HELD IN THE CASE OF PREM PAL GANDHI VS CI T 335 ITR 23 (2009) BY THE JURISDICTIONAL HIGH COURT T HAT WHERE THE ASSESSEE HAS FILED A REVISED RETURN SURRENDERIN G THE ADDITIONAL INCOME ONLY ON COMING TO KNOW THE DETECTION OF CONCEALMENT BY THE DEPARTMENT AND IT IS NOT A CASE OF BONAFIDE VOLUNTARY DISCLOSURE, PENALTY U/S 271(L)(C) IS LEVIABLE. RELIANCE IS ALSO PLACED ON THE CASE OF MAHAVIR METAL WORKS VS CIT(PSH) 92 ITR 513 TO HOLD THAT PENALTY U/ S 271(L)(C) IS ATTRACTED NOTWITHSTANDING THE FACT THAT THE ASSESSEE FILED A REVISED RETURN, WHERE THE OMISSION IS DELIBERATE AND WHERE THE RETURN IS REVISED ONLY AFT ER THE ITA NO.132/CHD/2016 A.Y.2007-08 7 DEPARTMENT GOT INFORMATION. FURTHER, IT HAS BEEN HE LD IN BHAIRAV LAI VERMA VS. UNION OF INDIA (ALL) 238 ITR 85 5 THAT 'VOLUNTARILY' MEANS OUT OF FREE WILL WITHOUT ANY COMPULS ION AND THAT IF THE DEPARTMENT HAS INCRIMINATING MATERIA L WITH REGARD TO THE DISCLOSED INCOME, DISCLOSURE IS NOT VOLUN TARY. IN THE INSTANT CASE THE DISCLOSURE WAS NOT VOLUNTARY. THEREFCUTJ 6 APPELLANT HAD NO BONAFIDE CAUSE FOR NOT DECLARING THE SAID CAPITAL GAINS INCOME OF RS.22,00,670 /- ON THE AMOUNT OF CONSIDERATION RECEIVED DURING THE YEAR IN ITS RETURN OF INCOME ORIGINALLY FILED. THEREFORE, THE PE NALTY LEVIED U/S 271(L)(C) FOR CONCEALMENT OF INCOME AS WELL AS FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME IS C ONFIRMED ON THE SAID AMOUNT HOWEVER, THE BALANCE AMOUNT OF PENA LTY LEVIED ON AMOUNT NOT ACTUALLY RECEIVED DURING THE YEAR IS HEREBY DELETED IN VIEW OF THE SAID JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH-COURT. THIS GROUND OF APPEAL IS PAR TLY ALLOWED. 5. AGGRIEVED BY THE SAME THE ASSESSEE HAS COME UP I N APPEAL BEFORE US RAISING FOLLOWING GROUNDS: 1. THAT THE LD. C1T(APPEALS) GROSSLY ERRED IN FACT S AND ON LAW, IN CONFIRMING THE LEVY OF PENALTY, AS IMPOSED BY THE LD. A.O. U/S 271(L)(C) OF THE INCOME-TAX ACT, 1961 FOR ALLEGED NON- DISCLOSURE OF LONG TERM CAPITAL GAINS. 2. THAT THE ASSESSEE HAD DECLARED LONG-TERM CAPITAL GAINS IN HIS RETURN FILED U/S 148 WHICH HAD BEEN DECLARED VA LID AND ACCEPTED AS PER THE ORDER OF C1T(APPEALS) DATED : 21.12.2011. 3. THAT BY ANY RECKONING, THE ISSUE BEING HIGHLY DEB ATABLE AND THE ASSESSEE'S BONAFLDE NOT IN DOUBT, NOR HIS EXPLANATION HELD TO BE FALSE, THE LEVY OF PENALTY W AS WHOLLY ILLEGAL AND HENCE NOT SUSTAINABLE. 4. THAT THE ORDER OF LD, CIT( APPEALS) IS AGAINST LAW AND FACTS OF THE CASE AND THEREFORE, LIABLE TO BE SET ASIDE. 5. THAT THE APPELLANT CRAVES, LEAVE TO ADD, AMEND, ALTER, MODIFY OR SUBSTITUTE ALL OR ANY OF THE ABOVE MENTIO NED GROUNDS OF APPEAL WHEN THE APPEAL IS FINALLY HEARD AND DISPOSED OFF. 6. DURING THE COURSE OF HEARING BEFORE US THE LD. C OUNSEL FOR ASSESSEE POINTED OUT THAT THE PENALTY LEVIED ON IDENTICAL ISSUE OF CONSIDERATION RECEIVED DURING THE YEAR ON ACCOUNT OF TRANSFER OF LAND BY VIRTUE OF JOINT DEVELOPMENT AGREEMENT (JDA) BETWEEN TATA HOUSING BUILDING SOCIE TY ITA NO.132/CHD/2016 A.Y.2007-08 8 LTD., M/S HASH BUILDERS PVT. LTD. AND PUNJABI COOPE RATIVE HOUSE BUILDING SOCIETY LTD. IN WHICH THE ASSESSEE O WNS A PLOT HAS BEEN DEALT WITH BY THE ITAT CHANDIGARH BEN CH IN THE CASE OF SHRI CHARANJIT SINGH ATWAL VS. ITO IN I TA NO.66/CHD/2016 DATED 20.4.2018. IT WAS POINTED OUT THAT THE I.T.A.T. HAD HELD THE ISSUE OF CHARGING THE CA PITAL GAINS EARNED ON TRANSFER OF LAND MADE DURING THE YEAR AS A DEBATABLE ISSUE AND DIRECTED THE DELETION OF PENAL TY LEVIED ON THE SAME. OUR ATTENTION WAS DRAWN TO THE RELEVAN T FINDINGS OF THE I.T.A.T. AT PARA 13 OF THE ORDER AS UNDER: 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AN D HAVE ALSO GONE THROUGH THE RECORDS. IN OUR VIEW, AS THE FACTS NARRATED ABOVE SUGGESTS, IT WAS NOT A SIMPLE CASE OF TRANSFER OF LAND. THE LAND WAS OWNED BY THE SOCI ETY CONSTITUTING 95 MEMBERS INCLUDING THE ASSESSEE. THE CONSIDERATION SETTLED FOR THE TRANSFER WAS IN CASH AS WELL AS IN KIND I.E IN THE SHAPE OF FLATS TO BE GIV EN TO THE MEMBERS AS PER 'THEIR PROPORTIONATE SHARE IN THE PR OPERTY. AS DISCUSSED ABOVE, THOUGH THE ASSESSEE HAD RECEIVE D THE CASH COMPONENT BY WAY OF FIRST TWO INSTALLMENTS AS PER THE PROPORTIONATE SHARE IN THE LAND ON THE PRO- RATA TRANSFER OF THE LAND BY SOCIETY, HOWEVER, THE CONSIDERATION IN KIND I.E. FLATS WAS NOT RECEIVED B Y THE ASSESSEE AS THE JDA COULD NOT MATURE. HENCE, THERE SEEMS FORCE IN THE CONTENTION OF THE ASSESSEE THAT HE WAS OF THE BONAFIDE BELIEF THAT THE TRANSFER IN THI S CASE WOULD BE COMPLETED ONLY WHEN THE JDA WOULD MATURE OR SUCCEED. AS OBSERVED ABOVE, THE HON'BLE SUPREME COURT HAS ALREADY HELD THAT THE TRANSFER IN RESPECT OF TH E REMAINING PART OF THE LAND WOULD NOT FALL IN THE DE FINITION OF THE TRANSFER AS PROVIDED U/S 2(47) OF THE I.T. AC T AND THERE WAS NO CERTAINTY OF THE TRANSACTIONS GETTING SUCCESSFUL. THE ASSESSEE SUO MO TO REVISED THE RETURN THOUGH BELATEDLY ON 7.10.2009 WHEN THE REGULAR ASSESSMENT PROCEEDINGS WERE UNDER PROGRESS AND OFFERED THE CAPITAL GAINS TAX IN RESPECT OF AMOUNT RECEIVED BY HIM AS PER HIS SHARE OUT OF THE FIRST TWO INSTALLMENTS RECEIVED BY THE SOCIETY ON PRORATE TRANSFER OF LAND. TILL TH E FILING OF THE REVISED RETURN, THE ASSESSEC WAS NEVER CONFRONTED BY THE ASSESSING OFFICER ON THIS ISSUE. THE ASSESSEE THUS SUO MOTO /I VOLUNTARILY O FFERED CAPITAL GAINS ON THE AMOUNT ACTUALLY RECEIVED BY HI M. ITA NO.132/CHD/2016 A.Y.2007-08 9 THE ISSUE WAS HIGHLY DEBATABLE. EVEN THE LAND WAS TRANSFERRED BY THE SOCIETY. IN THE JDA, SOCIETY HAS BEEN REFERRED TO AS 'OWNER'. IF THE SOCIETY WAS THE 'OWN ER' THEN THE CAPITAL GAINS APPARENTLY WOULD ALSO BE TAXABLE IN THE HANDS OF THE SOCIETY. THE ASSESSING OFFICER OF THE SOCIETY HAS ALSO TAXED THE CAPITAL G AINS IN THE HANDS OF THE SOCIETY ON PROTECTIVE BASIS. HENCE , IT WAS A DEBATABLE ISSUE WHETHER THE CAPITAL GAINS WIL L BE TAXED IN THE HANDS OF THE SOCIETY OR IN THE HANDS O F THE ASSESSEE. NOT ONLY THE ISSUE REGARDING THE NATURE O F THE TRANSACTIONS BUT ALSO ABOUT THE DATE ON WHICH THE TRANSFER CAN BE SAID TO HAVE COMPLETED, WAS DEBATAB LE. FURTHER, IN THE SIMILAR FACTS AND CIRCUMSTANCES IN THE CASE OF ANOTHER ASSESSEE NAMELY SHRI BALWINDER SING H DHILLON, THE COORDINATE CHANDIGARH BENCH OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2008-09 IN ITA NO. 1140/CHD/2014 VIDE ORDER DATED 3.8.2015 HAS UPHELD THE ORDER OF THE CIT(A) DELETING THE PENALTY SO LEV IED BY THE ASSESSING OFFICER U/S 271(L)(C) OF THE ACT. THE SAID DECISION HAS BEEN FURTHER FOLLOWED BY THE CHANDIGAR H BENCH OF THE TRIBUNAL IN THE CASE OF 'ITO VS. SMT. NEENA CHAUDHARY' IN ITA NO. 1096/CHD/2014 FOR ASSESSMENT YEAR 2008-09 WHEREIN ALSO THE DEPARTMENTAL APPEAL CHALLENGING THE DELETION OF PENALTY LEVIED U/S 271( L)(C) HAS BEEN DISMISSED. THE SAID DECISION HAVE ALSO BEEN FOLLOWED BY THE AMRITSAR BENCH OF THE TRIBUNAL IN ' SHRI RAGHUNATH SAHAI PURI VS. DCIT ORDER DATED 13.6.2016 IN ITA NO. 633/ASR/2014 FOR ASSESSMENT YEAR 2007-08. CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, AND IN VIEW OF THE DECIS IONS OF THE COORDINATE BENCHES OF THE TRIBUNAL, IN RESPE CT OF INCOME EARNED BY THE OTHER MEMBERS OF THE SOCIETY F ROM THE SAME TRANSACTIONS, WHEREBY, UPHOLDING THE ORDER OF THE CIT(A) IN CANCELLING PENALTY U/S 271(L)(C) OF THE ACT, WE ARE OF THE VIEW THAT THIS IS NOT A CASE OF FURNISHING O F INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME SO AS TO ATTRACT THE PENAL PROVISIONS OF SEC TION 271(L)(C) OF THE ACT. THE PENALTY SO LEVIED BY THE L OWER AUTHORITIES IN THIS CASE IS HEREBY ORDERED TO BE DE LETED. 7. THE LD. COUNSEL FOR ASSESSEE, THEREFORE, STATED THAT THE ISSUE WAS DIRECTLY COVERED BY THE AFORESAID DECISIO N OF THE I.T.A.T. AND NO PENALTY WAS LEVIABLE INTEREST HE PR ESENT CASE. 8. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE O RDER OF THE CIT(A). ITA NO.132/CHD/2016 A.Y.2007-08 10 9. WE HAVE HEARD THE RIVAL CONTENTIONS, GONE THROUG H THE ORDERS OF AUTHORITIES BELOW AND ALSO THE DECISIONS REFERRED TO BEFORE US. ADMITTEDLY THE PENALTY IN THE PRESENT CASE HAS BEEN LEVIED ON THE CAPITAL GAINS LIABLE TO TAX IN T HE IMPUGNED YEAR BY VIRTUE OF THE DECISION OF THE HON' BLE JURISDICTIONAL HIGH COURT IN THE CASE OF C.S.ATWAL (SUPRA). WE HAVE ALSO GONE THROUGH THE ORDER PASSED BY THE I .T.A.T. ON THE ISSUE OF PENALTY LEVIED ON THE SAID CAPITAL GAINS IN THE CASE OF C.S.ATWAL (SUPRA) ITSELF AND FIND THAT IT H AD FOUND THE ISSUE OF CHARGING THE CAPITAL GAINS TO TAX IN T HE IMPUGNED YEAR AS A DEBATABLE ISSUE. THE I.T.A.T. HA D HELD THAT THE LAND WAS TRANSFERRED BY THE SOCIETY AND EV EN JDA REFERRED THE SOCIETY AS THE OWNER, THEREFORE THE CA PITAL GAINS SHOULD HAVE BEEN TAXED IN THE HANDS OF THE SOCIETY, WHICH THE A.O. HAD DONE ON PROTECTIVE BASIS. ON THIS BASI S THE I.T.A.T. HELD THAT THE ISSUE WHETHER THE CAPITAL GA INS WERE TAXABLE IN THE HANDS OF THE ASSESSEE WAS A DEBATABL E ISSUE. THE I.T.A.T. ALSO HELD THAT EVEN THE DATE ON WHICH THE TRANSFER COULD BE SAID TO HAVE BEEN COMPLETED WAS D EBATABLE SINCE WHILE THE REVENUE OF THE VIEW THAT THE TRANSF ER TOOK PLACE WHEN JDA WAS ENTERED INTO, THE HON'BLE HIGH C OURT HAD HELD OTHERWISE AND HAD SUBJECTED TO TAX ONLY CA PITAL GAINS EARNED ON TRANSFER OF LAND WHICH HAD ACTUALLY TAKEN PLACE. THE ITAT ALSO HELD THAT THERE WAS FORCE IN T HE CONTENTION OF THE ASSESSEE THAT HE WAS OF THE BONAF IDE BELIEF THAT THE TRANSFER WOULD BE COMPLETED ONLY WHEN THE JDA WOULD MATURE SINCE THE CONSIDERATION IN KIND HAD NO T BEEN RECEIVED AS THE JDA COULD NOT MATURE. SINCE THE FAC TS AND ITA NO.132/CHD/2016 A.Y.2007-08 11 CIRCUMSTANCES LEADING THE LEVY OF PENALTY IN THE PR ESENT CASE ARE IDENTICAL TO THE CASE OF C.S.ATWAL (SUPRA) AND LD. DR HAS NOT BROUGHT TO OUR NOTICE ANY DISTINGUISHING FACTS WITH REGARD TO THE SAID CASE, THE DECISION RENDERED THER EIN WILL APPLY SQUARELY TO THE PRESENT CASE ALSO, FOLLOWING WHICH WE DELETE THE PENALTY LEVIED. 10. THE ASSESSEE HAS ALSO RAISED LEGAL GROUND BEFOR E US BUT NO ARGUMENTS WERE MADE VIS--VIS THE SAME. THE SAME , THEREFORE, IS DISMISSED. 11. IN EFFECT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- # $' % & (SANJAY GARG ) (ANNAPURNA GUPTA) / JUDICIAL MEMBER '( / ACCOUNTANT MEMBER *# /DATED: 26 TH NOVEM BER, 2018 * ' * &) *+,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. - $ / CIT 4. - $ ( )/ THE CIT(A) 5. +./ 0 , #0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35' / GUARD FILE &) $ / BY ORDER, 6 ! / ASSISTANT REGISTRAR ITA NO.132/CHD/2016 A.Y.2007-08 12