Shri Keshubhai D. Harsoda, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-1(3), GANDHIDHAM

ITA 163/RJT/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0131 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 24-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND N SONTAKKE
• Keywords: Earning of tax free income; Revised return
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: SHRI S.S. GODARA, JUDICIAL MEMBER AND S H RI AMARJIT SINGH , ACCOUNTANT MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] SHRI KESHUBHAI D. HARSODA, PROP. OF M/S. LAXMI ENTERPRISE, MIRA VASTRA BHANDAR STREET, K. D. PARK ROAD, AT. MAVDI, DIST: RAJKOT - 360004 PAN: ABNPH7831A (APPELLANT) VS THE ITO, WARD - 1(3), RAJKOT (RESPONDENT) REVENUE BY : S H RI ARVIND N. SONTAKKE , D . R. ASSESSEE BY: S H RI CHETAN AGRAWAL , A.R. DATE OF HEARING : 06 - 10 - 2 016 DATE OF PRONOUNCEMENT : 24 - 10 - 2 016 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THI S ASSESSEE S APPEAL FOR A.Y. 2009 - 10 , AR ISES FROM ORDER OF THE CIT(A) - 1, RAJKOT DATED 16 - 02 - 2015 IN APPEAL NO. CIT(A) - I T A NO . 163 / RJT /20 15 A SSESSMENT YEAR 200 9 - 10 I.T.A NO. 163 /RJT /20 15 A.Y. 2009 - 10 PAGE NO SHRI KESHUBHAI D. HARSODA VS. ITO 2 1 / RJT/0051/12 - 13 , IN PROCEEDINGS UNDER SECTION 271(1 ) (C) OF THE INCOME TAX AC T, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUND OF APPEAL: - 1. THAT, THE LEARNED CIT(A) HAS ERRED IN IMPOSING PENALTY U/S. 271(1)(C) OF RS. 2,20,154/ - IS NOT JUSTIFIED AND SHOULD BE CANCELLED. 3. IN THIS CASE, THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 2 , 30 , 050/ - WAS FILED BY THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 9 , 67 , 912/ - UNDER THE HEAD LONG TERM CAPITAL GAIN STATING THAT STATEMENT OF ASSESSEE U/S . 131 SUB - SECTION 1 OF THE I.T. ACT WAS RECORDED IN WHICH HE HAD STATED THAT HE AND HIS FATHER AND BROTHER HAD SOLD AGRICULTURAL LAND FOR RS. 1.5 CRORES AND HIS SHARE IN THE SAID LAND WAS 1/3. THE SAID AGRICULTURAL LAND WAS INHERITED PROPERTY WHICH WAS IN THE NAME OF GRAND FATHER FROM 28 TH OCT, 1961 TO 17 TH OCT, 1987 AN IN THE NAME OF HIS FATHER FROM 18 - 10 - 1987 AND THEN THE NAME OF THE ASSESSEE AND HIS BROTHER WAS INCLUDED W.E.F. 5 TH DECEMBER, 2000. HE FURTHER STATED THAT HE HAD RECEIVED RS. 35 LACS TOW ARDS 1/3 SHARE OF SALE OF SAID AGRICULTURAL LAND BUT BY MISTAKE HE HAS NOT SHOWN ANY CAPITAL GAIN IN THE RETURN OF INCOME IN ASSESSMENT YEAR 2009 - 10 AND THE ASSESSEE HAD OFFERED L ONG TERM CAPITAL GAIN OF RS. 9 , 67 , 912/ - . THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE I.T. ACT AND LEVIED PENALTY OF RS. 2 , 21 ,1 54/ - FOR CONCEALMENT OF INCOME BY FURNISHING INACCURATE PARTICULARS OF INCOME I.T.A NO. 163 /RJT /20 15 A.Y. 2009 - 10 PAGE NO SHRI KESHUBHAI D. HARSODA VS. ITO 3 U/S. 271(1) (C) OF THE I.T. ACT. ASSESSEE HAS MADE APPEAL AGAINST THE PENALTY ORDER OF THE ASS ESSING OFFICER BEFORE THE LD. COMMISSIONER OF INCOME TAX (A). THE LD. COMMISSIONER OF INCOME TAX (A) HAS DISMISSED THE APPEAL OF THE ASSESSEE BY STATING AS UNDER: - IN THE INSTANT CASE THE APPELLANT NEITHER SHOWED THE SALE TRANSACTION OF SALE OF LAND IN T HE RETURN OF INCOME NOR BY WAY OF FILING REVISED RETURN. IF AT ALL THE APPELLANT DID NOT DISCLOSE THE GAIN ON THE BONAFIDE PREMISE THAT THE INCOME IS EXEMPT, THEN HE SHOULD HAVE SHOWN IN COMPUTATION OF INCOME AND WOULD HAVE CLAIMED AS EXEMPT AS IS DONE IN CASE OF AGRICULTURAL INCOME OR ANY OTHER EXEMPTED INCOME, HE AGREED FOR ADDITION AND TO PAY TAX ONLY WHEN POINTED OUT BY THE AO DURING THE ASSESSMENT PROCEEDINGS. THIS ACT OF THE APPELLANT DEFINITELY LEADS TOWARDS CONCLUSION THAT THE APPELLANT HAS 'WILLFUL LY' CONCEALED THE INCOME (LTCG). IF HE WOULD HAVE SHOWN IN THE RETURN AS EXEMPTED INCOME THE SITUATION WOULD HAVE BEEN ENTIRELY DIFFERENT THE A.O. HAS LEVIED PENALTY UPON THE ORIGINAL ADDITION OF INCOME WHICH THE APPELLANT AGREED FOR. HENCE,' THE LATER ACT ION OF THE A,O, U/S,154 WHICH WAS DELETED BY THE CIT(A) HAS NO RELEVANCE HERE. FURTHER, NONE OF THE JUDGEMENTS QUOTED BY THE APPELLANT IS OF ANY HELP SO FAR AS THE IS SUE OF 'WILLFULNESS' IS CONCERNED. HERE, IN MY OPINION, THE AO IS RIGHT IN LEVYING THE PEN ALTY AS THIS IS A CLEAR CASE OF WILLFUL CONCEALMENT OF INCOME, THEREFORE., THE PENALTY LEVIED IS CONFIRMED AND THE GROUND OF APPEAL IS HEREBY DISMISSED. 4. THE ASSESSEE HAS FILED APPLICATION FOR ADJOURNMENT OF THE APPEAL WHICH WAS REJECTED. THE LD. DEP ARTMENTAL R EPRESENTATIVE RELIED ON THE ORDER OF THE COMMISSIONER OF INCOME TAX (A). 5. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSAL OF THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAD RECEIVED ONE THIRD SHARE AS CONSIDERATION O N SA LE OF AGRICULTURAL LAND WHICH WAS INHERITED PROPERTY. THE SAID AGRICULTURAL LAND WAS IN THE NAME OF HIS GRANDFATHER THEN INHERITED IN THE NAME OF HIS FATHER AND LATER ON THE I.T.A NO. 163 /RJT /20 15 A.Y. 2009 - 10 PAGE NO SHRI KESHUBHAI D. HARSODA VS. ITO 4 NAME OF THE ASSESSEE WAS ADDED. THE ASSESSEE HAS NOT OFFERED LONG T ERM CAPITAL GAIN ON RECEIPT CONSIDERATION FROM THE SALE OF SAID AGRICULTURAL LAND ON THE BONA FIDE BELIEF THAT IT IS EXEMPT INCOME. THE LD. CIT(A) HAS NOT ACCEPTED THE CONTENTION OF THE ASSESSEE ON THE REASONING THAT THE ASSESSEE SHOULD HAVE SHOWN THE S AME IN THE COMPUTATION OF INCOME AS EXEMPT AS DONE IN THE CASE OF AGRICULTURAL INCOME OR ANY OTHER EXEMPTED INCOME. 6. IN THE PRESENT CASE, WE OBSERVED THAT THE ASSESSEE HA D NOT OFFERED CAPITAL GAIN ON THE SALE OF THE SAID AGRICULTURAL LAND AS HE WAS U NDER BONAFIDE IMPRE SSION THAT AGRICULTURE LAND WAS N OT COME IN THE DEFINITION OF ASSE T AND LONG TERM CAPITAL GAIN EARNED ON IT NOT TO BE TAXABLE . THEREFORE, W E DO NOT AGREE WITH THE FINDINGS OF THE AUTHORITIES BELOW AND A CCORDINGLY, WE SET ASIDE THE IMPU GNED ORDER AND ALLOW THE APPEAL OF THE ASSESSEE . 7. IN THE END , APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 24 - 10 - 201 6 SD/ - SD/ - (S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 24 /10 /2016 AK I.T.A NO. 163 /RJT /20 15 A.Y. 2009 - 10 PAGE NO SHRI KESHUBHAI D. HARSODA VS. ITO 5 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT