Shri Gopalbhai K.Parikh, Baroda V. The Income tax Officer,Ward-4(3), Baroda

ITA 1481/AHD/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1188 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 05-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D V SINGH
• Assessee Lawyers: M K PATEL
• Keywords: Capital asset; Bonafide belief; Bonafide mistake

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND KUL BHARAT, JUDICIAL MEMBER I.T.A. NO. 1481/AHD/2012 (ASS TT. YEAR 2007-08) SHRI GOPALBHAI K. PARIKH 27,MEGHDOOT SOCIETY, KARELIBAUG, VADODARA-390 018 PAN ADCPP 9337L V / S INCOME TAX OFFICER, WARD 4(3), AAYAKAR BAHAVAN NEAR RACE COURSE CIRCLE, VADODARA. (APPELLANT) (RESPONDENT) BY APPELLANT SHRI M.K. PATEL BY RESPONDENT SHRI D.V. SINGH, SR. D.R. / DATE OF HEARING : 11-08-2015 / DATE OF PRONOUNCEMENT: 21-08-2015 / O R D E R PER KUL BHARAT JUDICIAL MEMBER: THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-III, BARODA DATED 26-04-2012. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL: GROUNDS OF APPEAL . 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD.CIT (A) HAS ERRED IN LEVYING AND THE LD. CIT (A) ERRED IN CONFIRMING THE LEVY OF PENALTY U/S. 271(1)(C) OF TH E INCOME TAX ACT,1961 AMOUNTING TO RS.5,64,930/-. ITA NO. 1481/ AHD/2012 ASSESSMENT YEAR 2007-08 SHRI GOPAL K. PARIKH 2. THE APPELLANT CRAVES LEAVE TO AMEND, TO ALTER, T O ADD OR TO DELETE THE GROUNDS OF APPEAL. 2. BRIEFLY STATED THE FACTS ARE THAT ON QUANTUM PRO CEEDINGS THE ASSESSING OFFICER FRAMED ASSESSMENT UNDER SEC.143(3 ) OF THE INCOME TAX ACT (HEREINAFTER THE ACT) AND MADE ADDITION O F RS.24,11,208/- BEING CAPITAL GAINS NOT DISCLOSED IN THE RETURN OF INCOME. ASSESSING OFFICER ALSO INITIATED PENALTY PROCEEDINGS. SUBSEQU ENTLY THE ASSESSING OFFICER LEVIED A PENALTY OF RS.5,59,020/-, VIDE ORD ER DATED 15-12-2009. THE ASSESSEE AGGRIEVED BY THE IMPOSITION OF PENALTY ORDER PREFERRED APPEAL BEFORE THE LD. CIT (A), WHO AFTER CONSIDERIN G THE SUBMISSIONS OF THE ASSESSEE DISMISSED THE APPEAL. 3. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT INAD VERTENTLY AND DUE TO BONAFIDE MISTAKE THE ASSESSEE COULD NOT DISCLOSE CAPITAL GAIN. HE SUBMITTED THAT AGRICULTURAL LAND WAS SOLD AND THE A SSESSEE UNDER THE BONAFIDE BELIEF THAT ON SALE OF AGRICULTURAL LAND W OULD NOT ATTRACT CAPITAL GAIN. HE THEREFORE, FAILED TO OFFER THE CAPITAL GAI N ACCRUED OUT OF SALE OF AGRICULTURAL LAND. HE SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION ON THE BASIS OF THAT THE LAND IN QUESTION FELL WITH IN THE VADODARA MUNICIPAL LIMIT. THEREFORE, IN THE PECULIARITY OF T HE FACTS, HE SUBMITTED THAT PENALTY BE DELETED. ON THE CONTRARY LD. SR. D. R. SUBMITTED THAT IT IS NOT PURELY A CASE OF THE IGNORANCE BUT THE DELIB ERATE ACT ON THE PART OF THE ASSESSEE TO NOT TO DISCLOSE THE CAPITAL GAIN . HE SUBMITTED THAT THE ASSESSEE IS NOT SIMPLY AN AGRICULTURIST WHO MAY NOT BE AWARE OF THE LAW. THE ASSESSEE HAS DISCLOSED INCOME IN HIS RETUR N OF INCOME WHICH INCLUDED DIRECTORS REMUNERATION FROM BARODA COUNTR Y CLUB PVT. LTD., INCOME FROM PARTNERSHIP FIRM I THE NAME OF SHRI RAM KRISHNA HOTELS PVT. LTD., INCOME FROM PARTNERSHIP FIRM M/S. KRISHN A ENTERPRISE AND INCOME FROM M/S. KRISHNA PETROLEUM. HE SUBMITTED TH AT ASSESSEE HAS ITA NO. 1481/ AHD/2012 ASSESSMENT YEAR 2007-08 SHRI GOPAL K. PARIKH SEPARATE BUSINESS AND THEREFORE HIS ACCOUNTS ARE MA INTAINED BY THE PROFESSIONALS. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS NOT DISPUTED THAT THE ASSESSEE HAS B EEN EARNING INCOME FROM BUSINESS, REMUNERATION AS DIRECTOR OF THE COMP ANY. THE PROVISIONS OF SEC. 271(1)(C) IS ATTRACTED WHEN ANY PERSON FAILS TO DISCLOSE TRUE AND CORRECT PARTICULARS OF INCOME OR FURNISHES INACCURATE PARTICULARS OF INCOME. IN THE CASE ON HAND, THERE I S NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE WAS REQUIRED T O DISCLOSE CAPITAL GAIN ACCRUED OUT OF TRANSFER OF CAPITAL ASSET FALLI NG WITHIN THE MUNICIPAL LIMIT OF VADODARA MUNICIPALITY. THEREFORE, THE DEFE NCE OF THE ASSESSEE THAT DUE TO BONAFIDE MISTAKE HE DID NOT DISCLOSE CA PITAL GAIN IS NOT ACCEPTABLE IT WAS ONLY WHEN THE ASSESSING OFFICER R ECEIVED INFORMATION FROM THE CONCERNED AUTHORITY WITH REGARD TO THE TRA NSFER OF THE LAND, THE ASSESSEE CAME WITH AN EXPLANATION THAT HE WAS UNDER BONAFIDE BELIEF THAT SUCH GAIN WOULD BE SUBJECTED TO CAPITAL GAIN T AX AS THE CAPITAL ASSET BEING AGRICULTURAL LAND. 6. IN OUR CONSIDERED VIEW THERE IS NOTHING ON RECOR D TO SUGGEST BONAFIDE OF THE ASSESSEE WITH REGARD TO THE CONTENT ION THAT DUE TO MISTAKE HE COULD NOT OFFER THE CAPITAL GAIN FOR TAX ATION. UNDER THESE FACTS, IF WE ALLOW THE APPEAL OF THE ASSESSEE IT WO ULD SET A WRONG PRECEDENT THAT ANY PERSON WHO IS APPROACHED BY THE AUTHORITIES WOULD COME WITH DEFENCE THAT DUE TO BONAFIDE MISTAKE HE C OULD NOT DISCLOSE THE TAXABLE INCOME. THEREFORE, WE DISMISS THE GROUN D OF APPEAL OF THE ASSESSEE. ITA NO. 1481/ AHD/2012 ASSESSMENT YEAR 2007-08 SHRI GOPAL K. PARIKH 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 21 ST AUGUST,2015 AT AHMEDABAD. SD/- SD/- (PRAMOD KUMAR) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBR AHMEDABAD. DATE:- 21-8 -2015. PATKI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! () / THE CIT(A), AHMEDABAD 5. $%& '', , )*++ / DR, ITAT, AHMEDABAD 6. &,- . / GUARD FILE. TRUE COPY !' / BY ORDER #/!$% &'(' ( DY./ASSTT.REGISTRAR) %' ()% *+',, $./ / ITAT, AHMEDABAD ITA NO. 1481/ AHD/2012 ASSESSMENT YEAR 2007-08 SHRI GOPAL K. PARIKH 1. DATE OF DICTATION- 11-8-2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER :12-8-2015 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P .S./P.S. - 13-8-2015 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT : 21-8-2015 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : 21 -8-2015 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER