Sudhakar Eknath Avhad, Pune V. Addl. Comm. of Income-tax, Pune

ITA 1533/PUN/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93838 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-09-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 30-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Keywords: Sale consideration of property below Jantri Value; Revised return
• Section: 50C; 139(5); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE: SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO. 1533 /PN/201 1 ASSESSMENT YEAR : 20 04 - 05 MR. SUDHAKAR EKNATH AVHAD, 10, SHEELAVIHAR COLONY, ERANDAWANA, PUNE-411004 VS. ASSESSING OFFICER OF INCOME TAX, WARD 6(2), PUNE (APPELLANT) (RESPONDENT) PAN NO. AFTPA6909A ASSESSEE BY: SHRI M.K. KULKARNI REVENUE BY: SHRI P.S. NAIK DATE OF HEARING : 10-06-2015 DATE OF PRONOUNCEMENT : 24-06-2015 ORDER PER VIKAS AWASTHY, JM:- THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-III, PUNE DATED 25-0 1-2011 FOR THE ASSESSMENT YEAR 2004-05, CONFIRMING THE LEVY OF PENALT Y U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THIS APPEAL OF THE ASSESSEE BEFORE THE TRIBUNAL IS IN SE COND ROUND. EARLIER, THE APPEAL OF THE ASSESSEE WAS ALLOWED BY THE TRIB UNAL VIDE ORDER DATED 12-09-2013. THE REVENUE FILED MISCELLANEOUS A PPLICATION NO. 49/PN/2014 U/S. 254(2) HIGHLIGHTING THE APPARENT FACTUA L ERROR RECORDED BY THE TRIBUNAL WHILE DELETING THE PENALTY VIDE O RDER DATED 12-09-2013. THE TRIBUNAL AFTER EXAMINING THE FACTUAL POSIT ION RECALLED ITS ORDER ON 10-10-2014 WITH THE FOLLOWING OBSERVATIONS: 2 ITA NO. 1533/PN/2011, A.Y. 2004-05 4. BOTH THE PARTIES HAVE BEEN HEARD. WE FIND THAT AN ERROR HAS CREPT IN THE ORDER OF THE TRIBUNAL ON ACCOUNT OF WRON G APPRECIATION OF FACTS RELATING TO THE ADDITION MADE ON ACCOUNT OF CA PITAL GAINS, IN PARTICULAR IN RELATION TO THE ADOPTION OF SALE CONSI DERATION FOR THE PURPOSES OF COMPUTING CAPITAL GAINS. UNDER THESE CIRCU MSTANCES, IT WOULD APPROPRIATE IF THE ORDER OF THE TRIBUNAL DATED 1 2.09.2013 (SUPRA) IS RECALLED SO THAT BOTH THE PARTIES ARE ALLOWED AN OPPORTUNITY TO ADDRESS THE ISSUES AGAIN AND TO ENABLE PROPER APPRECIATION OF FACTS BEFORE ADJUDICATING THE IMPOSITI ON OF PENALTY U/S 271(1)(C) OF THE ACT. THEREFORE, THE ORDER OF THE TRIBUNAL DATED 12.09.2013 (SUPRA) IS RECALLED AS ABOVE AND THE MATTER S HALL BE POSTED FOR A FRESH HEARING BEFORE THE REGULAR BENCH . REGISTRY IS DIRECTED TO RE-POST THE APPEAL IN DUE COURSE BEFORE THE REGULAR BENCH. IN THE LIGHT OF THIS BACKGROUND, THE APPEAL IS LISTED BEFORE THE BENCH FOR DE NOVO ADJUDICATION. 3. BEFORE WE PROCEED WITH THE MERITS OF THE CASE IT WOU LD BE ESSENTIAL TO EXAMINE BRIEF FACTS OF THE CASE. THE ASSESSEE IS AN IN DIVIDUAL AND IS CONDUCTING COACHING CLASS FOR LAW STUDENTS. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004-05 ON 31 -01-2005 DECLARING TOTAL INCOME OF RS.24,63,868/-. IN THE RETURN OF INCOME, THE ASSESSEE INTER ALIA OFFERED LONG TERM CAPITAL GAINS OF RS.17,50,928/-. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE ASSESSEE WAS GIVEN A QUESTIONNAIRE IN RESPECT OF INCOME RETURNED. THE ASSESSE E FILED REVISED RETURN OF INCOME ON 02-11-2006 OFFERING CAPITAL GAIN OF RS. 25,19,296/- AS AGAINST RS.17,50,928/- DISCLOSED IN THE ORIGINAL RETURN OF INCOME. THE ASSESSEE ALSO OFFERED INCOME FROM HOUSE PROPERTY WHIC H WAS NOT DISCLOSED BY THE ASSESSEE IN HIS ORIGINAL RETURN OF INCOME. ON THE BASIS OF INFORMATION RECEIVED IN THE PURPORTED REVISED RETURN O F INCOME, THE ASSESSING OFFICER MADE ADDITIONS/DISALLOWANCES. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE SECOND RETURN OF INCOME WAS FILED BY THE 3 ITA NO. 1533/PN/2011, A.Y. 2004-05 ASSESSEE BEYOND THE TIME LIMITS SPECIFIED U/S. 139(5) OF THE A CT, THEREFORE, IT CANNOT BE CONSIDERED AS REVISED RETURN OF IN COME. PENALTY PROCEEDINGS U/S. 271(1)(C) WERE INITIATED AGAINST THE ASSESSE E FOR NOT DISCLOSING INCOME FULLY AND TRULY IN THE RETURN OF INCOME. P ENALTY U/S. 271(1)(C) OF RS.1,95,800/- WAS LEVIED BY THE INCOME TAX OFFICER VIDE ORDER DATED 11-05-2007. AGGRIEVED BY THE PENALTY ORDER U/S. 271(1)(C), THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDE R CONFIRMED THE LEVY OF PENALTY. NOW, THE ASSESSEE IS IN SECOND APPEAL IMPUGNING THE FINDING S OF FIRST APPELLATE AUTHORITY. 4. SHRI M.K. KULKARNI APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED THAT THE ASSESSEE HAD SOLD LAND FOR RS.29,00,000/-. THE L ONG TERM CAPITAL GAIN WAS COMPUTED ON THE CONSIDERATION RECEIPT. H OWEVER, DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS TH E ASSESSING OFFICER DIRECTED THE ASSESSEE TO ADOPT THE MARKET VALUE OF THE LAND AS PER STAMP VALUATION AS REQUIRED U/S. 50C OF THE ACT. ACCORD INGLY, THE ASSESSEE FILED REVISED RETURN DECLARING THE SALE CONSIDERAT ION OF RS.36,50,000/- AND COMPUTED THE CAPITAL GAINS THEREON. TH E LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS NOT A CASE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS IN TERMS OF SECTION 2 71(1)(C). THE CAPITAL GAINS HAVE BEEN REVISED BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT. TO SUPPORT HIS SUBMISSIONS THE LD. COUNS EL PLACED RELIANCE ON THE JUDGMENT OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. MADAN THEATRES LTD. REPOR TED AS 260 CTR (CAL) 75. 4 ITA NO. 1533/PN/2011, A.Y. 2004-05 5. AU CONTRAIRE, SHRI P.S. NAIK REPRESENTING THE DEPARTME NT SUBMITTED THAT THE ASSESSEE HAD DELIBERATELY SUPPRESS ED THE SALE CONSIDERATION OF LAND. THE ASSESSEE IN THE RETURN OF INCOM E FILED ON 02- 11-2006 HAS ADMITTED THE SALE CONSIDERATION AS RS.36,50,00 0/- AND HAS COMPUTED LONG TERM CAPITAL GAINS THEREON. WHEREAS, IN TH E ORIGINAL RETURN OF INCOME THE ASSESSEE HAD DISCLOSED SALE CONSIDE RATION AS RS.29,00,000/- ONLY. THE LD. DR FURTHER SUBMITTED THAT THE STAMP DUTY OF RS.2,38,030/- CLAIMED AS EXPENSES FOR TRANSFER OF THE PR OPERTY INCLUDED PENALTY OF RS.1,14,030/- PAID FOR CONTRAVENTION OF LAW WHICH IS NOT AN ALLOWABLE EXPENSES IN CONNECTION WITH TRANSFER OF PR OPERTY. FURTHER, THE ASSESSEE IN HIS ORIGINAL RETURN OF INCOME DID NOT SHOW ANY INCOME FROM HOUSE PROPERTY. HOWEVER, IN THE RETURN OF INC OME SUBSEQUENTLY FILED DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE ASSESSEE ADMITTED RENTAL INCOME OF RS.3,000/- PER MONTH. THE ASSESSEE HAS NOT VOLUNTARILY DISCLOSED ALL THESE SUPPRESSED INCOMES . IT WAS ONLY DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, WH EN QUESTIONNAIRE WAS ISSUED TO THE ASSESSEE, THE ASSESSEE SUCCUMBED AND DISCLOSED THE ACTUAL SALE CONSIDERATION OF LAND AND RENTAL INCOME. THE LD. DR VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYE D FOR DISMISSING THE APPEAL OF THE ASSESSEE. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUT HORITIES BELOW. WE HAVE ALSO EXAMINED THE JUDGMENT ON WHICH THE LD. COUNSEL HAS PLACED RELIANCE. IN THE ORIGINAL RETURN OF INCOME FILED ON 31-01-200 5, THE ASSESSEE DISCLOSED SALE CONSIDERATION OF LAND SITUATED AT OLD S. NO. 9 AND NEW S. NO. 11 AT KATRAJ, PUNE AS RS.29,00,000/- AND COMPU TED LONG TERM CAPITAL GAINS OF RS.17,50,928/-. DURING THE COURSE O F SCRUTINY ASSESSMENT WHEN THE ASSESSING OFFICER ASKED FOR CERTAIN D ETAILS AND EXPLANATIONS AFTER ISSUING QUESTIONNAIRE TO THE ASSESSEE , THE ASSESSEE 5 ITA NO. 1533/PN/2011, A.Y. 2004-05 FILED SECOND RETURN OF INCOME ON 02-11-2006 ADMITTING ANNU AL RENTAL INCOME OF RS.25,200/- AND SALE CONSIDERATION OF LAND AS RS.3 6,50,000/-. IT IS PERTINENT TO MENTION HERE THAT THE ASSESSING OFFICER HAD ASKED THE ASSESSEE TO COMPUTE LONG TERM CAPITAL GAINS BY ADOPTING MARKET VALUE OF LAND AS PER STAMP VALUATION IN ACCORDANCE WITH SECTION 50C OF THE ACT I.E. RS.36,83,872/-. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE IS THA T THE LAND HAS BEEN ACTUALLY SOLD FOR RS.29,00,000/-. THE CONSIDERATIO N OF RS.36,50,000/- HAS BEEN SHOWN IN THE REVISED RETURN OF INC OME FOR COMPUTING LONG TERM CAPITAL GAINS IN ACCORDANCE WITH THE DIRECTIONS OF THE ASSESSING OFFICER. WE DO NOT CONCUR WITH THE SUBMISSIO NS OF THE ASSESSEE. WE OBSERVE THAT AT THE TIME OF FILING OF SECOND RETURN OF INCOME AND IN THE STATEMENT OF FACTS FILED BEFORE COMMISSIONE R OF INCOME TAX (APPEALS) AT THE TIME OF FILING APPEAL, THE ASSE SSEE ADMITTED THE SALE CONSIDERATION OF LAND AS RS.36,50,000/-. THE RELEV ANT EXTRACT OF THE STATEMENT OF FACTS IS REPRODUCED HERE-IN-BELOW: THE ASSESSEE RECEIVED SALES PROCEEDS OF RS.36,50,000/- ON ACCOUNT OF SALE OF LAND. ACCORDING TO ASSESSING OFFIC ER THE ASSESSEE SHOULD HAVE ADOPTED STAMP VALUATION RS.36,83,872/- IN VIE W OF S. 50C OF THE INCOME-TAX ACT. FURTHER, BOTH THE ASSESSING OFFICER AND THE COMMISSIONER O F INCOME TAX (APPEALS) HAVE RECORDED IN THEIR FINDINGS THAT I N THE REVISED RETURN, WHILE COMPUTING THE CAPITAL GAINS THE SALE CONSIDER ATION WAS ADOPTED AT RS.36,50,000/-. THIS FACT HAS NOT BEEN DENIED BY THE LD. COUNSEL FOR THE ASSESSEE. 7. THUS, IT IS OWN ADMISSION OF THE ASSESSEE THAT LAND WAS SOLD FOR RS.36,50,000/- AND NOT RS.29,00,000/- AS DISCLOSED BY THE A SSESSEE IN HIS ORIGINAL RETURN OF INCOME FILED ON 31-01-2005. FURTHER, T HE ASSESSEE 6 ITA NO. 1533/PN/2011, A.Y. 2004-05 IN THE SECOND RETURN OF INCOME FILED ON 02-11-2006 DISCLOS ED RENTAL INCOME OF RS.25,200/- WHICH WAS NOT EARLIER ADMITTED BY THE ASSESSEE IN HIS ORIGINAL RETURN OF INCOME. IT IS RELEVANT TO MENTION HE RE THAT SUBSEQUENT RETURN FILED ON 02-11-2006 BY THE ASSESSEE DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS CANNOT BE ACCEPTED A S REVISED RETURN UNDER THE PROVISIONS OF SECTION 139(5), AS THE SAM E WAS FILED MUCH AFTER THE LAPSE OF TIME AS SPECIFIED UNDER THE ACT. AS PER THE PROVISIONS OF SECTION 139(5), THE REVISED RETURN CAN BE FILED BEFORE THE EXPIRY OF ONE YEAR OF THE END OF RELEVANT ASSESSMENT YEA R OR BEFORE COMPLETION OF ASSESSMENT, WHICHEVER IS EARLIER. IN THE PRES ENT CASE THE ASSESSEE SHOULD HAVE FILED REVISED RETURN ON OR BEFORE 31 -03-2006. WHEREAS, THE RETURN WAS FILED BY THE ASSESSEE ON 30-11 -2006 I.E. AFTER EIGHT MONTHS OF THE LAST DATE ON WHICH REVISED RETURN SH OULD HAVE BEEN FILED. THEREFORE, THE SUBSEQUENT RETURN FILED BY THE ASSESS EE CANNOT BE CONSIDERED AS REVISED RETURN OF INCOME UNDER THE PROVISIONS OF ACT. 8. THE ASSESSEE IN SUPPORT OF HIS SUBMISSION HAS PLACED RELIANCE ON THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE O F COMMISSIONER OF INCOME TAX VS. MADAN THEATRES LTD. (SUPRA). THE CONT ENTION OF THE ASSESSEE IS THAT WHEN CAPITAL GAINS ARE COMPUTED BY INVO KING THE PROVISIONS OF SECTION 50C AND THE ASSESSEE HAS COMPUTED CAPITAL GAINS ON ACTUAL SALE PRICE, IT IS NOT A CASE OF FILING OF INACCURATE PARTICULARS. THE PENALTY U/S. 271(1)(C) CANNOT BE LEVIED. THE FACTS OF THE CASE RELIED UPON BY THE LD. COUNSEL IS ENTIRELY DIFFERENT FROM THE FACTS OF THE CASE IN HAND. IN THE PRESENT CASE THE ASSESSEE HAS NOT CORR ECTLY DISCLOSED THE SALE CONSIDERATION IN THE ORIGINAL RETURN OF INCOME. THE PEN ALTY HAS NOT BEEN LEVIED FOR NOT ADOPTING MARKET PRICE IN ACCORDANCE W ITH THE PROVISIONS OF SECTION 50C BUT FOR NOT FULLY AND TRULY DISC LOSING THE SALE CONSIDERATION IN THE RETURN OF INCOME. THEREFORE, THE RATIO LAID DOWN IN 7 ITA NO. 1533/PN/2011, A.Y. 2004-05 THE CASE OF COMMISSIONER OF INCOME TAX VS. MADAN THEATRE S LTD. (SUPRA) WILL NOT BE APPLICABLE IN THE PRESENT CASE. 9. FROM THE APPRECIATION OF FACTS OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS NOT FULLY AND TRULY DISCLOS ED ALL MATERIAL FACTS WHICH ARE NECESSARY FOR THE ASSESSMENT. THE ASSE SSEE HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE ASSESSE E IN HIS RETURN OF INCOME SUPPRESSED THE ACTUAL SALE CONSIDERATIO N OF LAND AND ALSO THE RENTAL INCOME, THUS, MAKING HIM LIABLE FOR LEVY OF PENA LTY U/S. 271(1)(C) OF THE ACT. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). THE APPEAL OF THE AS SESSEE IS DISMISSED AND THE IMPUGNED ORDER IS UPHELD. ORDER PRONOUNCED ON WEDNESDAY, THE 24 TH DAY OF JUNE, 2015 AT PUNE SD/- SD/- (R.K. PANDA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 24 TH JUNE, 2015 RK/PS COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - III, PUNE 4 THE CIT - I II, PUNE 5 6 THE DR, ITAT, A BENCH, PUNE. GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE