Shri. Suryaprakash Budhwani, Nagpur V. Income Tax Officer Ward-4(1), Nagpur

ITA 153/NAG/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1815 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 11-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MADHAV VICHORE
• Keywords: Bonafide belief
• Section: 54F; 148; 15

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH , ( E - COURT), MUMBAI , BEFORE SHRI R.K.GUPTA , J M & SHRI RAJENDRA , A M ITA NO S . 15 3 / N AG / 20 1 1 ( ASSESSMENT YEAR : 20 03 - 04 ) SHRI SURYAPRAKASH BUDHWANI , C/O. G.S.TRADING COMPANY, MAYO HOSPITAL ROAD, NAGPUR VS. ITO WARD - 4(1) , NAGPUR - 440 001 . PAN/GIR NO. : A A NPB 6002 G ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : MR. MADHAV VICHORE /REVENUE BY : MR. PRAKASH MANE DATE OF HEARING : 3 0 TH JAN ., 201 3 DATE OF PRONOUNCEMEN T : 8 TH FEB. ,201 3 O R D E R P ER SHRI R.K.G UPTA, JM : TH IS APPEAL HA S BEEN PREFERRED BY THE ASSESSEE BEFORE THE ITAT NAGPUR BENCH, NAGPUR, AGAINST THE ORDER OF LEANED CIT (A) - II, NAGPUR (MAHARASHTRA) RELATING TO THE ASSESSMENT YEAR 20 03 - 04 , WHICH HA S BEEN HEARD THROUGH E - COURT, MUMBAI . 2 . THE ASSESSEE IS OBJECTING THE CONFIRMATION OF LEVY OF PENALTY UNDER SECTION 271(1)(C) RELATING TO ASSESSMENT YEAR 2003 - 04 BY THE LEARNED CIT(A) . ITA NO . 15 3 /20 1 1 2 3 . BRIEF FACTS OF THE CASE ARE THAT IN THIS CASE RETU RN WAS FILED ON 31 - 3 - 2004 DECLARING AN INCOME OF RS. 1,65, 230/ - . IT WAS NOTICED BY THE AO THAT RETURN INCOME IN THE CASE OF GURUMUKHDAS BUDHWANI (HUF) WAS FILED BEFORE THE AO, WARD NO. 2(4), NAGPUR. IN CASE OF HUF, THE RESPECTIVE AO OBSERVED THAT CAPITAL GAI N ON SALE OF SHOP ARE LIABLE TO BE TAXED IN THE CASE OF SHRI SURYAPRAKASH BUDHWANI, THE ASSESSEE, FOR THE REASON MENTIONED IN THAT ORDER FOR ASSESSMENT YEAR 2003 - 04. THEREFORE, THE AO PASSED AN ORDER ON PROTECTIVE BASIS IN CASE OF HUF AND ACCORDINGLY NOTIC E UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE. IT WAS REQUESTED THAT THE RETURN FILED ORIGINALLY MAY BE TREATED FILED IN RESPONSE TO NOTICE UNDER SECTION 148. THEREAFTER THE ASSESSMENT WAS COMPLETED AND CAPITAL GAIN TO THE EXTENT OF RS. 6,44,164/ - WAS ADDE D TO THE INCOME OF THE ASSESSEE. PENALTY PROCEEDING UNDER SECTION 271(1)(C) WAS ALSO INITIATED. THEREAFTER THE AO NOTED THAT THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 54F, WHICH IS NO T ALLOWABLE AND TO THAT EXTENT, THE INCOME WAS TREATED AS CONCEALED INCOME. ACCORDINGLY, ON THAT ACCOUNT, THE AO LEVIED PENALTY OF RS. 1,29,500/ - . 4 . IN APPEAL, L EARNED CIT(A) CONFIRMED THE ACTION OF THE AO . NOW, THE ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL. 5 . L EARNED COUNSEL OF THE ASSESSEE FILED WRITTEN SUBMISS ION. 6 . ON THE OTHER HAND, LEARNED DR PLACED RELIANCE ON THE ORDER OF AO & CIT(A) . ITA NO . 15 3 /20 1 1 3 7 . AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, WE FOUND THAT THE ASSESSEE DESERVES TO SUCCEED IN HIS APPEAL. IT IS NOTED THAT THE FATHER OF THE A SSESSEE, WHO WAS OWNER OF THE SHOPS HAS ALREADY BEEN DIED. THE AMOUNT OF SALE ON ACCOUNT OF SHOPS WAS SHOWN INVESTED IN CONSTRUCTION OF HOUSE. THE CONSTRUCTION OF THE HOUSE WAS NOT COMPLETED IN TIME. THEREFORE, DEDUCTION UNDER SECTION 54F WAS NOT ALLOWED . ON THE AMOUNT TO THE EXTENT OF EXEMPTION UNDER SECTION 54F, THE PENALTY WAS LEVIED BY THE AO. SINCE THE FATHER OF THE ASSESSEE HAD ALREADY EXPIRED AND DETAILS WERE NOT AVAILABLE WITH HIM, THEREFORE, THE ASSESSED INCOME WAS ACCEPTED BY THE ASSESSEE IN HIS H AND ON SUBSTANTIVE BASIS. NO FURTHER APPEAL WAS ALSO FILED BY THE ASSESSEE. THE PENALTY ON THE AMOUNT OF DEDUCTION CLAIMED UNDER SECTION 54F HAS BEEN LEVIED BY THE AO, WHICH IS CONFIRMED BY THE CIT(A) . WE ARE OF THE VIEW THAT THE ASSESSEE HAS NOT FURNISHED ANY INACCURATE PARTICULARS TO CONCEAL ANY INCOME. ALL THE DETAILS IN RESPECT OF SALE OF SHOPS WERE SHOWN IN THE RETURN OF HUF. SINCE NO DETAILS WERE AVAILABLE, THEREFORE, THE SALE OF SHOP WAS ACCEPTED BY THE ASSESSEE IN HIS HAND. IT IS FURTHER SEEN THAT O N THE AMOUNT OF PAYABLE ON ACCOUNT OF SALE OF SHOPS, THE ASSESSEE HAS ALREADY PAID TAX OF RS. 1,30,476/ - AND INTEREST OF RS. 1,7,264/ - ON CAPITAL GAINS. THE ASSESSEE WAS UNDER ITA NO . 15 3 /20 1 1 4 BONAFIDE BELIEF THAT SINCE HIS FATHER HAS INVESTED THE SALE CONSIDERATION IN CONST RUCTION OF HOUSE, THEREFORE, DEDUCTION IS ALLOWABLE. THE CONSTRUCTION C OULD NOT COMPLETE IN TIME, THEREFORE, DEDUCTION WAS DENIED, HOWEVER, IN OUR CONSIDERED VIEW, DENIAL OF DEDUCTION DOES NOT ATTRACT PENALTY AUTOMATICALLY. THE ASSESSEE HAS DECLARED ALL TH E DETAILS IN RESPECT OF SALE OF SHOPS AT THE TIME OF FILING RETURN AS WELL AS IN THE RETURN OF HIS FATHER. THERE WAS A BONAFIDE INTENTION ON THE PART OF THE ASSESSEE IN SHOWING THE INCOME OF HUF IN HIS HANDS AS DETAILS WERE NOT AVAILABLE. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT AT LEAST PENALTY UNDER SECTION 271(1)(C) IS NOT LIABLE TO BE IMPOSED ON THE ASSESSEE ON THE FACTS OF THE PRESENT CASE. ACCORDINGLY, WE CANCEL THE LEVY OF PENALTY. 8 . IN THE RESULT , APPEAL OF THE ASSESSEE I S ALLOWED . ORDER PRONOUNCED IN THE E - COURT ON THIS 8 TH DAY OF FEB , 201 3 . - 201 3 SD/ - SD/ - ( ) ( RAJENDRA ) ( ) ( R .K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 0 8 / 02 / 201 3 . /PKM , PS ITA NO . 15 3 /20 1 1 5 COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI / NAGPUR . 4. / CIT 5. / DR, ITAT, MUMBAI / NAGPUR . 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI