ACIT, CHENNAI V. R.Veena, CHENNAI

ITA 1562/CHNY/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4479 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 15-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: G BASKAR
• Keywords: Gift; Cost of acquisition; Difference of opinion
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NOS. 1560, 1561 & 1562/MDS/2013 ASSESSMENT YEARS : 2003-04, 2004-05 & 2006-07 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-III(3), 3 RD FLOOR, UTHAMAR GANDHI SALAI, NUNGAMBAKKAM, CHENNAI 600 034. (APPELLANT) VS SMT. R. VEENA, OLD NO.24, NEW NO.38, ABM AVENUE, R.A.PURAM, CHENNAI 600 028. [PAN: AFGPV 7602 A] (RESPONDENT) REVENUE BY : SHRI N. MADHAVAN, JCIT ASSESSEE BY : SHRI G. BASKAR, ADVOCATE DATE OF HEARING : 23-09-2013 DATE OF PRONOUNCEMENT : 23-09-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE SET OF THREE APPEALS FOR THE ASSESSMENT YEARS (AYS) 2003-04, 2004-05 & 2006-07 HAVE BEEN FILED BY THE R EVENUE AGAINST THE COMMON ORDER OF THE COMMISSIONER OF INC OME TAX(APPEALS)-II, CHENNAI DATED 25-04-2013 U/S. 271( 1)(C) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). SINCE ITA NOS. 1560, 1561 & 1562/MDS/2013 2 COMMON ISSUE IS INVOLVED IN ALL THE THREE APPEALS, THEY HAVE TAKEN UP TOGETHER FOR ADJUDICATION. 2. THE BRIEF FACTS OF THE CASE ARE: SEARCH OPERATI ONS WERE CARRIED OUT U/S. 132 OF THE ACT IN THE PREMISES OF SHRI R. RANGARAJAN AND HIS FAMILY MEMBERS ON 26-08-2008. T HE ASSESSEE IS THE DAUGHTER OF SHRI R. RANGARAJAN. TH E ASSESSEE HAD FILED RETURN OF INCOME U/S. 139. NOTICE U/S. 153A R.W.S. 153C WAS ISSUED TO THE ASSESSEE. CONSEQUENT TO THE NOTI CE ISSUED U/S. 153A R.W.S. 153C, THE ASSESSEE FILED HER RETURN OF INCOME ADMITTING ADDITIONAL INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE ASSESSING OFFICER AFTER MAKING ADDI TION IN THE INCOME RETURNED BY THE ASSESSEE, INITIATED PENALTY PROCEEDINGS FOR THE ADDITIONS MADE. THE ACIT, CENTRAL CIRCLE-III(3 ), CHENNAI VIDE ORDER DATED 27-06-2011PASSED U/S. 271(1)(C) LEVIED PENALTY ON ACCOUNT OF UN-DISCLOSED AGRICULTURAL INCOME, UN-EXP LAINED CASH CREDIT, UN-DISCLOSED JEWELLERY AND THE DIFFERENCE O F INCOME BETWEEN THE ORIGINAL INCOME AND THE RETURN FILED U/ S. 153C. ON APPEAL BEFORE THE CIT(APPEALS), THE CIT(APPEALS) DE LETED THE PENALTY LEVIED ON THE DIFFERENCE OF INCOME BETWEEN THE ORIGINAL RETURN AND THE RETURN FILED U/S. 153C FOR ALL THE T HREE AYS. I.E., 2003-04, 2004-05 & 2006-07. IN THE AY. 2006-07, TH E ITA NOS. 1560, 1561 & 1562/MDS/2013 3 CIT(APPEALS) ALSO DELETED PENALTY IN RESPECT OF LO NG TERM CAPITAL GAINS. AGGRIEVED AGAINST THE ORDER OF THE CIT(APPEALS), TH E REVENUE HAS COME IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI N. MADHAVAN, APPEARING ON BEHALF OF THE RE VENUE SUBMITTED THAT THE ADDITIONAL INCOME DISCLOSED CONS EQUENT TO SEARCH AFTER ISSUING NOTICE U/S. 153A R.W.S. 153C A MOUNTS TO CONCEALMENT OF INCOME AND FURNISHING INACCURATE PAR TICULARS IN THE ORIGINAL RETURN DELIBERATELY AND INTENTIONALLY. TH EREFORE, THE ASSESSEE HAS MADE HERSELF LIABLE FOR PENALTY U/S. 2 71(1)(C). THE LD. DR IN ORDER TO SUPPORT HIS CONTENTIONS RELIED O N THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SMT. MEERA DEVI REPORTED AS 253 CTR 559 (DELHI). THE LD. DR FURTHER SUBMITTED THAT IN ITA NO. 1562/ 2013 RELEVANT TO THE AY. 2006-07, THERE IS AN ADDITIONAL ISSUE WITH REGARD TO ADDITION OF ` 9,06,196/- ON ACCOUNT OF LONG TERM CAPITAL GAINS. THE ASSESSEE CLAIMED THE COST OF ACQUISITIO N OF PROPERTY AS ` 6,00,000/- AS AGAINST THE COST OF ` 1,13,000/-. IN THE CASE OF WILL OR GIFT, THE COST OF ACQUISITION OF THE PREVIO US OWNER IS THE DEEMED COST FOR SUBSEQUENT OWNER. IN THE PRESENT C ASE THE PROPERTY WAS ACQUIRED BY ASSESSEE AS GIFT FROM HER MOTHER, ITA NOS. 1560, 1561 & 1562/MDS/2013 4 THEREFORE, ACQUISITION COST OF HER MOTHER SHOULD HA VE BEEN TAKEN. THE ASSESSEE HAS TAKEN ` 6,00,000/- AS COST OF ACQUISITION WITHOUT ANY BASIS. 4. ON THE OTHER HAND, SHRI G. BASKAR, ADVOCATE APP EARING ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE IMP UGNED ORDER PASSED BY THE CIT(APPEALS). THE LD. COUNSEL SUBMIT TED THAT IN THE ORIGINAL RETURN, THERE WAS AN ERROR IN COMPUTATION OF INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY WHICH WAS REC TIFIED IN SUBSEQUENT RETURN FILED U/S. 153C. THE ASSESSEE VO LUNTARILY RECTIFIED THE MISTAKE AFTER IT CAME TO HER KNOWLEDG E. THE LD. COUNSEL FURTHER SUBMITTED THAT THE ASSESSE E HAD DISCLOSED LONG TERM CAPITAL GAINS BY FURNISHING VAR IOUS DETAILS REQUIRED TO COMPUTE CAPITAL GAINS. THE ASSESSEE HA D ACQUIRED THE PROPERTY FROM HER MOTHER, WHO IN TURN HAD RECEIVED IT FROM HER FATHER AS GIFT IN THE YEAR 1980. THE PROPERTY AT T HE TIME OF GIFT WAS VALUED AT ` 1,13,000/-. SINCE, THE PROPERTY WAS ACQUIRED PRIOR TO 01-04-1981 THE ASSESSING OFFICER HAS TAKEN THE INDE XED COST AS ON 01-04-1981 AS ` 1,13,000/- AS THE DATE OF GIFT WAS VERY NEAR TO THE CUT-OFF DATE. THE ASSESSEE HAD DISCLOSED COMPL ETE FACTS. THERE IS NO CONCEALMENT ON THE PART OF THE ASSESSEE . THE INTERPRETATION OF PROVISIONS OF LAW HAS RESULTED IN HIGHER LONG TERM ITA NOS. 1560, 1561 & 1562/MDS/2013 5 CAPITAL GAINS. THE ASSESSEE CANNOT BE PENALISED FO R TAKING A DIFFERENT VIEW. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE JUDGMENT RELIE D UPON BY THE LD. DR. IN ALL THE APPEALS IDENTICAL ISSUES ARE INVOLV ED, THEREFORE, ALL THE APPEALS ARE DECIDED BY THIS SINGLE ORDER. 6. IN RESPECT OF ADDITIONAL INCOME DISCLOSED BY ASS ESSEE IN RETURN FILED U/S.153C, THE DR HAS CONTENDED THAT TH E ASSESSEE HAS NOT VOLUNTARILY DISCLOSED THE ENTIRE INCOME UNDER T HE HEAD INCOME FROM HOUSE PROPERTY. IT IS ONLY BY VIRTUE OF SEA RCH PROCEEDINGS THAT THE ASSESSEE WAS FORCED TO COME OUT WITH THE C ORRECT FACTS AND AS SUCH THE ASSESSEE SHOWED HIGHER UNDER THE HE AD INCOME FROM HOUSE PROPERTY. ON THE OTHER HAND, THE LD. COUNSEL CONTROVERTING T HE SUBMISSIONS OF DR STATED THAT IN THE RETURN FILED U /S. 153A R.W.S. 153C, THE ASSESSEE HAD VOLUNTARILY ADMITTED THE ADD ITIONAL INCOME OF ` 2,31,065/- UNDER THE HEAD INCOME FROM HOUSE PROPER TY. WE FIND THAT THERE IS NO SPECIFIC FINDING IN THE PENAL TY ORDER WITH REGARD TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURAT E PARTICULARS BY ITA NOS. 1560, 1561 & 1562/MDS/2013 6 THE ASSESSEE. WE CONCUR WITH THE FINDINGS OF THE C IT(APPEALS) ON THIS ISSUE AND ACCORDINGLY CONFIRM THE SAME. 7. IN THE AY. 2006-07, THE REVENUE HAS TAKEN ADDITI ONAL GROUND THAT THE APPELLANT HAD TAKEN THE COST OF ACQ UISITION OF PROPERTY AT ` 6.00 LAKHS WITHOUT ANY BASIS. THE LONG TERM CAPITA L GAIN WAS RECALCULATED AFTER VALUING THE COST OF ACQ UISITION OF PROPERTY AS ON 01-04-1981. THE ASSESSEE HAD RECEIV ED THE PROPERTY AS A GIFT FROM HER MOTHER ON 29-06-2003, W HO IN TURN HAD RECEIVED THE SAME AS GIFT FROM HER FATHER ON 30-08- 1980. ON THE DATE OF GIFT THE VALUE OF PROPERTY WAS DETERMINED A S ` 1,13,000/-. AS PER THE PROVISIONS OF SECTION 49 OF THE ACT, IN CASE OF GIFT OR WILL, THE COST OF ACQUISITION OF THE ASSET SHALL BE DEEME D TO BE THE COST FOR WHICH THE PREVIOUS OWNER OF THE PROPERTY ACQUIR ED IT. THE PROPERTY WAS VALUED BY THE ASSESSING OFFICER AT ` 1,13,000/- ON 01-04-1981 AS THE DATE OF GIFT WAS VERY CLOSE TO TH E CUT-OFF DATE. THE ASSESSEE WHILE CALCULATING LONG TERM CAPITAL GA IN HAD TAKEN THE COST OF ACQUISITION AS ` 6,00,000/-. AS IS EVIDENT FROM THE RECORDS, THE ASSESSEE HAD DISCLOSED COMPLETE FACTS WITH DETAILS OF THE DATE OF ACQUISITION. THERE WAS NO CONCEALMENT OF FACTS OR INACCURATE PARTICULARS. THE VARIATION IN COST OF A CQUISITION SEEMS TO BE ON ACCOUNT OF DIFFERENCE OF OPINION. THEREF ORE, IT IS NOT A ITA NOS. 1560, 1561 & 1562/MDS/2013 7 CASE WARRANTING LEVY OF PENALTY U/S. 271(1)(C). TH E HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS P. LTD., REPORTED AS 322 ITR 158 HAS HELD THAT MERE MAKING OF CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS. WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. 8. WE HAVE GONE THROUGH THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SMT. MEERA DEVI (SUPRA) CITED BY THE LD. DR. WE FIND THAT THE RATIO OF THE DECISION RELIED ON BY THE DR IS NOT APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. THEREFORE, THE SAME WILL NOT SUPPORT THE CAU SE OF REVENUE. 9. ALL THE THREE APPEALS OF THE REVENUE ARE DISMISS ED FOR THE REASONS AFOREMENTIONED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON MONDAY, THE 23 RD SEPTEMBER, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIK AS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 23 RD SEPTEMBER, 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR