The ACIT, Circle-3(2), Hyderabad V. M/s Sumon Technologies Pvt. Ltd, Hyderabad

ITA 1413/HYD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1431 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 14-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MALLIKARJUN
• Assessee Lawyers: B PEDDIRAJULU
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1413/HYD/2012 : ASSESSMENT YEAR 2006-07 ASSTT. COMMISSIONER OF INCOME- TAX CIRCLE 3(2), HYDERABAD. V/S M/S. SUMAN TECHNOLOGIES PVT. LTD., HYDERABAD. (PAN - AADCS 4186 P ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MALLIKARJUN DR RESPONDENT BY : SHRI B.PEDDIRAJULU DATE OF HEARING 21 . 01 .201 3 DATE OF PRONOUNCEMENT 21.01.2013 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-IV HYDERABA D DATED 17.7.2012 CANCELLING THE PENALTY OF RS.10,00,300 LEVIED BY TH E ASSESSING OFFICER UNDER S.271(1)(C) OF THE INCOME TAX ACT FOR THE ASS ESSMENT YEAR 2006- 07. 2. BRIEFLY STATED, FACTS OF THE CASE ARE THAT THE ASSESSEE, ENGAGED IN THE BUSINESS OF MANUFACTURE OF GRINDING WHEELS, FILED RETURN OF INCOME DECLARING LOSS OF RS.14,35,970 SUBSEQUE NTLY, ASSESSMENT WAS COMPLETED UNDER S.143(3) OF THE INCOME-TAX ACT. DURING THE COURSE OF ASSESSMENT, IT WAS FOUND THAT THE ASSESSEE SOLD A PROPERTY FOR RS.12.65 LAKHS AND WHILE CALCULATING THE SHORT TERM CAPITAL GAINS, THE ASSESSEE CONSIDERED THE SALE VALUE AT RS.5,71,986, AND OFFERED SHORT TERM CAPITAL GAINS. HOWEVER, IT WAS FOUND THAT AS PER THE GOVERNMENT VALUATION, THE VALUE OF THE PROPERTY WAS RS.25,53,1 74. THE ASSESSING ITA NO.1413/HYD/12 M/S. SUMAN TECHNOLOGIES PVT. LTD., HYDERABAD. 2 OFFICER COMPUTED THE CAPITAL GAINS ON THE SALE BY I NVOKING THE PROVISIONS OF S.50C OF THE INCOME-TAX ACT AT RS.19,81,188 FOR WHICH THE MANAGING DIRECTOR OF THE COMPANY ACCEPTED THE COMPUTATION OF CAPITAL GAINS. 3. LATER, THE ASSESSING OFFICER INVOKING THE PROV ISIONS OF S.271(1)(C) OF THE ACT, INITIATED THE PROCEEDINGS F OR LEVY OF PENALTY IN RELATION TO THE ADDITION MADE IN THE ASSESSMENT, AN D ULTIMATELY LEVIED A PENALTY OF RS.10,00,300 FOR FURNISHING INACCURATE P ARTICULARS OF INCOME, VIDE ORDER OF PENALTY DATED 30.3.2011 PASSED UNDER S.271(1)(C) OF THE ACT. ON APPEAL, THE CIT(A) DELETED THE SAID PENAL TY, PLACING RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF RELIANCE PETRO PRODUCTS LTD. (322 ITR 158). AGAINST THE SAID ACTI ON OF THE CIT(A), DEPARTMENT IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES. LEARNED COUNS EL FOR THE ASSESSEE PLACED RELIANCE ON THE ORDER OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF RENU HINGORANI, MUMBAI IN I TA NO.2210/MUM/2010 DATED 22.12.2010, WHEREIN PENALTY LEVIED IN RELATION TO AN ADDITION MADE INVOKING THE PROVISIONS OF S.50 C OF THE ACT, THE TRIBUNAL HELD THAT LEVY OF PENALTY UNDER S.271(1)(C ) IS NOT JUSTIFIED. RELEVANT PORTION OF THE SAID ORDER OF THE TRIBUNAL IS AS FOLLOWS- 8. WE HAVE CONSIDERED THE RIVAL CONTENT IONS AND RELEVANT RECORD . WE FIND THAT THE AO HAD MADE ADDITION OF R S.9,00,824/ - BEING DIFFERENCE BETWEEN THE SALE CONSIDERATION AS PER SALE AGREEMENT AND THE VALUATION MADE BY THE STAMP VALUA TION AUTHORITY. THUS, THE ADDITION HAS BEEN MADE BY THE AO BY APPLYING THE PROVISIONS OF SECT ION 50C OF THE ACT. I T IS E VIDENT FROM THE ASSESSMENT ORDER THAT THE AO HAS NOT QUESTIONED THE ACTUAL CONSIDERATION RECEIVED BY THE ASSESSEE BUT THE ADDI TION IS MADE PURELY ON THE BASIS OF DEEMING PROVISIONS OF THE IN COME TAX ACT , 1961. THE AO HAS NOT GIVEN ANY FINDING THAT THE ACT UAL SALE CONSIDERATION IS MORE THAN THE SALE CONSIDERATION A DMITTED AND MENTIONED IN THE SALE AGREEMENT. THUS IT DOES NOT A MOUNT TO CONCEALMENT OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. IT IS ALSO NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS FAILED TO FURNISH THE RELEVANT RECORD AS CAL LE D BY THE AO TO ITA NO.1413/HYD/12 M/S. SUMAN TECHNOLOGIES PVT. LTD., HYDERABAD. 3 DISCLOSE THE PRIMARY FACTS. THE ASSESSEE HAS FURNIS HED AL L THE RELEVANT FACTS, DOCUMENTS/MATERIAL INCLUDING THE SA LE AGREEMENT AND THE AO HAS NOT DOUBTED THE GENUINENESS AND VALI DITY OF THE DOCUMENTS PRODUCED BEFORE HIM AND THE SALE CONSIDER ATION RECEIVED BY THE ASSESSEE. UNDER THESE FACTS AND CIR CUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT FURNISHED CORRECT PARTICULARS OF INCOME. MERELY BECAUSE THE ASSESSEE AGREED FOR ADDITION ON THE BASIS OF VALUATION MADE BY THE STAM P VALUATION AUTHORITY WOULD NOT BE A CONCLUSIVE PROOF THAT THE SALE CONSIDERATION AS PER THIS AGREEMENT WAS INCORRECT A ND WRONG. ACCORDINGLY THE ADDITION BECAUSE OF THE DEEMING PRO VISIONS DOES NOT IPSO FACTO ATTRACT THE PENAL TY U/S 271(1) (C ). HENCE IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V/S RELIANCE PETRO PRODUCTS PVT. LTD (SUPRA), THE PENAL TY LEVIED U/S 271(1)( C ) IS NOT SUSTAINABLE. THE SAME IS DELETE D. FACTS AND CIRCUMSTANCES OF THE CASE LEADING TO THE LEVY OF THE IMPUGNED PENALTY IN THE INSTANT CASE ARE IDENTICAL TO THE ON ES CONSIDERED BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF RENU HI NGORANI (SUPRA), WE FIND THAT THIS IS NOT A FIT CASE FOR THE LEVY OF PE NALTY, AND THE CIT(A), AS SUCH, WAS JUSTIFIED IN CANCELLING THE PENALTY LEVIE D BY THE ASSESSING OFFICER. WE ACCORDINGLY UPHOLD THE ORDER OF THE CI T(A) AND REJECT THE GROUNDS OF THE REVENUE IN THIS APPEAL. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON 21.01.2013 SD/ - (SAKTIJIT DEY) SD/ - (CHANDRA POOJARI) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DT/- 21 ST JANUARY, 2013 COPY FORWARDED TO: 1. M/S. SUMAN TECHNOLOGIES PVT. LTD., 304A, 3 RD FLOOR, SURYA TOWERS, HMT NAGAR, HYDERABAD 2. A SSTT . COMMISSIONER OF INCOME - TAX CIRCLE 3(2), H YDERABAD 3. 4. COMMISSIONER OF INCOME - TAX(APPEALS) IV HYDERABAD COMMISSIONER OF INCOME - TAX I II , HYDERABAD 5. THE DEPARTMENTAL REPRESENTATIVE, ITAT HYDERABAD B.V.S.