M/s. Jyoti Travels Pvt. Ltd, New Delhi V. ITO, New Delhi

ITA 1507/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2295 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 24-08-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 16-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Capital Gains
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA : VICE PRESIDENT AN D SHRI RAJPAL YADAV : JUDICIAL MEMBER ITA NO. 1507/DEL/09 ASSTT. YR: 2005-06 M/S JYOTI TRAVELS PVT. LTD. VS. ITO, WARD 4(2), 804, MEGHDOOT, 94, NEHRU PLACE, NEW DELHI. NEW DELHI. PAN/ GIR NO. AAA CJ 0564 H ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI R.S. SINGHVI CA RESPONDENT BY : SHRI JASDEEP SINGH SR. DR O R D E R PER G.E. VEERABHADRAPPA, V.P: THIS APPEAL, BY THE ASSESSEE, ARISES OUT OF THE OR DER DATED 1-10-2008 OF THE CIT(APPEALS)-VII, NEW DELHI FOR A.Y. 2005-06 . 2. THE ONLY DISPUTE IN THIS APPEAL RELATES TO IMPOS ITION OF PENALTY U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. 3. THE ASSESSEE IS A COMPANY, ENGAGED IN THE BUSIN ESS OF TOUR OPERATORS AND TRAVEL AGENTS. IT SOLD A SHOP AT GURGAON FOR R S. 35,00,000/- AS AGAINST THE PURCHASE VALUE OF RS. 15,23,426/-, RESULTING IN TO CAPITAL GAIN OF RS. 19,76,574/-. DEDUCTION U/S 54D TO THE SAME EXTENT W AS CLAIMED IN THE RETURN FILED. THE ASSESSING OFFICER NOTICED THAT THE ASSES SEE HAD WRONGLY MADE A ITA 1507/DEL/09 M/S JYOTI TRAVELS PVT. LTD. 2 CLAIM FOR DEDUCTION U/S 54D, WHICH APPLIED ONLY TO SALE OF CAPITAL ASSET AS A RESULT OF COMPULSORY ACQUISITION UNDER ANY LAW. THE REFORE, THE ASSESSEES CLAIM FOR DEDUCTION U/S 54D WAS NOT IN ACCORDANCE W ITH THE PROVISIONS OF LAW AND ACCORDINGLY THE SUM IN QUESTION WAS BROUGHT TO TAX BY DISALLOWING THE SAID CLAIM. IT IS WITH REFERENCE TO THIS DISALL OWANCE, THE REVENUE HAS IMPOSED A PENALTY OF RS. 5,00,000/- U/S 271(1)(C) A S AN ACT OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. THE PENAL TY WAS CONFIRMED IN APPEAL BY THE CIT(APPEALS) AND THE ASSESSEE IS BEFORE US. 4. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION OF DELHI HIGH COURT IN THE CASE OF CIT VS. E.I. DUPONT INDIA LTD. (ITA NO. 418/2007 ORDER DATED 29-11-2007), WHEREIN, UNDER IDENTICAL CIRCUMSTANCES PENALTY HAS BEEN CANCELLED. THE LEARNED COUNSEL ALSO RELI ED UPON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS. HARI MACHIN ES LTD. (2009) 311 ITR 285. 5. THE LEARNED DR, ON THE OTHER HAND, STRONGLY JUST IFIED THE IMPOSITION OF PENALTY AND THE REASONS GIVEN BY THE CIT(A). ACCOR DING TO HIM, INCORRECT CLAIM MADE BY THE ASSESSEE IS INTENTIONAL AND MALA FIDE AND THE VERY CLAIM ITSELF IS NOT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 54D AND THEREFORE, THE PENALTY HAS RIGHTLY BEEN IMPOSED. ITA 1507/DEL/09 M/S JYOTI TRAVELS PVT. LTD. 3 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND GONE THROUGH THE RECORDS. IN OUR VIEW, THE PENALTY, HAVING REGAR D TO THE FACTS AND CIRCUMSTANCES OF THE CASE, IS NOT LEVIABLE. THE ASS ESSEE HAS DISCLOSED ALL THE INFORMATION, WHICH IS NECESSARY FOR THE PURPOSE OF MAKING OF ASSESSMENT. HE HAS NOT CONCEALED ANY PARTICULARS OF INCOME OR GIVE N INACCURATE PARTICULARS OF SUCH INCOME. THE FACTS REVEAL THAT THE ASSESSEE HAS STATED THAT HE HAD SOLD THE SHOP. IN FACT, BEFORE US, THE CHARTERED ACCOUNT ANT WHO ADVISED THE ASSESSEE, HAS FILED A LETTER STATING THAT DUE TO SO ME MISCONCEPTION AND MISUNDERSTANDING OF THE LEGAL PROVISION, THEY HAD A DVISED THE ASSESSEE TO CLAIM BENEFIT U/S 54D IN RESPECT OF CAPITAL GAINS O N SALE OF SHOP IN GURGAON AND THE ENTIRE CAPITAL GAIN WAS DEPOSITED IN CAPITA L GAIN SAVING ACCOUNT WITH STATE BANK OF INDIA, SHOWING BONA FIDE IN THE ASSES SEES CLAIM. ALTHOUGH LEGALLY THE ASSESSEE IS NOT ENTITLED, BUT HE HAS DI SCLOSED ALL THE PARTICULARS. IN IDENTICAL SITUATION THE HONBLE DELHI HIGH COURT IN THE CASE OF E.I. DUPONT INDIA LTD. (SUPRA), HAS HELD THAT IN SUCH A SITUAT ION THE ASSESSEE CANNOT BE SAID TO HAVE FURNISHED INACCURATE PARTICULARS. THE ASSESSEE HAS MERELY APPLIED AN INACCURATE LEGAL POSITION IN ITS RETURN. WHEN IT WAS BROUGHT TO ITS KNOWLEDGE, THE ASSESSEE IMMEDIATELY ACCEPTED THE M ISTAKE. THEREFORE, IN OUR VIEW, THE PENALTY HAS BEEN WRONGLY LEVIED AND A PPLYING THE PRINCIPLE ITA 1507/DEL/09 M/S JYOTI TRAVELS PVT. LTD. 4 LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEELS LTD. VS. STATE OF ORISSA (1972) 83 ITR 26 (SC), WE CANCEL THE PENALTY. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 4-12-2009. SD/- SD/- ( RAJPAL YADAV ) (G.E.VEE RABHADRAPPA) JUDICIAL MEMBER VICE PRESIDENT DATED: 4 TH DECEMBER 2009. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR