ITO 19(1)(3), MUMBAI V. CHANDRAKANT M MEHTA, MUMBAI

ITA 1694/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3732 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 11-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Valuation report
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI BEFORE SHRI D. KARUNAKARA RAO,AM AND SHRI AMARJIT S INGH, JM / I.T.A. NO.1694/MUM/14 ( / ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER 19(1)(3) ROOM NO.314, 3 RD FLOOR, PIRAMAL CHAMBERS, PAREL, LALBAUG, MUMBAI - 400012 / VS. CHANDRAKANT M. MEHTA 398, KIRTI KUNJ, 14 TH ROAD, KHAR (W), MUMBAI 400052 ./ ./ PAN/GIR NO. : AADPM2882K ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 03.12.2015 /DATE OF PRONOUNCEMENT: 11.03.2016 !' / O R D E R PER AMARJIT SINGH, JM: THIS IS AN APPEAL FILED AGAINST THE ORDER DATED 04 .12.2013 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-30, MU MBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] FOR THE A SSESSMENT YEAR 2009-10 WHEREIN THE DELETION OF THE PENALTY BY THE LEARNED CIT(A) HAS BEEN CHALLENGED BY THE REVENUE. 2. THE FACT TO LEVY THE PENALTY IS THAT ASSESSEE DE CLARED THE LONG TERM CAPITAL LOSS TO THE TUNE OF RS.1,92,09,99 8/- ON SALE OF ASSESSEE BY: SHRI BHARAT PARIKH DEPARTMENT BY: SHRI SHIDDARAMAPPA K. NAVAR ITA NO.1694/MUM/2014 ASSESSMENT YEAR: 2009-10 2 PROPERTY BY VIRTUE OF RETURN FILED ON 27.07.2009. THE APPELLANTS SOLD RD SHARE IN THE PROPERTY OF PLOT BEARING CTS NO. E/49 8 AT BANDRA (W), MUMBAI BY VIRTUE OF AGREEMENT DATED 23. 09.2008 ENTERED BETWEEN ASSESSEE AND ONE FARHEEN KADAWALA, WHO WAS BUYER OF THE PROPERTY OR AGREEMENT VALUE OF RS.2,00 ,00,000/-. THE APPELLANT HAS SOLD HIS RD SHARE IN THE MENTIONED PROPERTY ON THE VALUE OF RS.66,66,666/-. THE APPELLANT TOOK THE SA LE VALUE TO THE TUNE OF RS.2,00,00,000/- FOR COMPUTING THE LONG TER M CAPITAL GAIN BECAUSE OF THE ACQUISITION OF THE SAID PROPERT Y AS ON 01.04.1981 SO FAR AS THE RD SHARE OF THE PROPERTY OF THE ASSESSEE WAS CONCERNED THE SAME WAS VALUED AT RS.61,50,618/- ON THE BASIS OF VALUATION REPORT OF THE GOVERNMENT APPROVED VALU ER. THE INDEXATION COST OF THE PROPERTY WAS WORKED OUT TO T HE TUNE OF RS.3,97,70,000/-. CAPITAL LOSS TO THE TUNE OF RS.1 ,92,09,998/-. THE ASSESSING OFFICER DID NOT ACCEPTED ABOVE SAID VALUA TION AND CALCULATED THE VALUATION WITH THE RATE PRESCRIBED B Y THE INDIAN VALUERS DIRECTORY & RECKONER WHICH INDICATED AT RS. 61,50,618/-. THE RD SHARE OF THE PROPERTY WAS COMPUTED TO THE TUNE OF RS.20,50,206/- ON THE BASIS OF AGREEMENT DATED 23. 09.2008 LONG TERM CAPITAL GAIN WAS COMPUTED TO THE TUNE OF RS.62 ,60.801/-. THEREAFTER, THE ASSESSING OFFICER INITIATED THE PEN ALTY PROCEEDINGS U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961( IN SHOR T THE ACT). FOR FURNISHING THE INACCURATE PARTICULARS OF LONG T ERM CAPITAL GAIN ON SALE OF PROPERTY. THE ASSESSEE WAS NOT SAT ISFIED TO THE CALCULATION AS ASSESSED BY THE ASSESSING OFFICER AN D FILED THE APPEAL BEFORE LEARNED CIT(A) AND THE LEARNED CIT(A) HAS DELETED ITA NO.1694/MUM/2014 ASSESSMENT YEAR: 2009-10 3 THE SAID PENALTY. FEELING AGGRIEVED THE REVENUE HA S FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND HAVE GONE THROUGH THE RECORD CAREFULLY. IN THE INSTANT CASE THE ASSESSEE TOOK THE VALUATION OF THE SALE OF THE PLOT ON THE BASIS OF THE VALUATION REPO RT OF THE GOVERNMENT APPROVED VALUER. THE ASSESSING OFFICER DID NOT ACCEPT THE SAID VALUE AND RELIED UPON THE VALUE ADO PTED BY THE STAMP VALUE AUTHORITY. IT IS TO BE SEEN WHETHER TH IS FACTS ARE AMOUNT TO FURNISHING INACCURATE PARTICULARS AND CON CEALMENT OF PARTICULARS TO EVADE TAX. THE LEARNED CIT(A) WHILE DELETING THE SAID PENALTY HAS PLACE RELIANCE UPON THE LAW SETTLE D IN COMMISSIONER OF INCOME TAX VS. RELIANCE PETROPRODUC TS PVT. LTD. 322 ITR 158(SC) . IN THE ABOVE MENTIONED CIRCUMSTANCES INCOME TAX APPELLATE TRIBUNAL HAS PASSED THE JUDGEM ENT IN CASE CITED AS RENU HINGORANI VS. ACIT RG. 19(3) DECIDED ON 22.12.2010. IN THE SAID LAW IT IS HELD THAT: 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RELEVANT RECORD. WE FIND THAT THE AO HAD MADE ADDITION OF RS.9,00,824/- BEING DIFFERENCE BETWEEN THE SALE CONSIDERATION AS PER SALE AGREEMENT THE AO BY APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT. IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT THE AO HAS NOT QUESTIONED THE ACTUAL CONSIDERATION RECEIVED BY ITA NO.1694/MUM/2014 ASSESSMENT YEAR: 2009-10 4 THE ASSESSEE BUT THE ADDITION IS MADE PURELY ON THE BASIS OF DEEMING PROVISIONS OF THE INCOME TAX ACT, 1961. THE AO HAS NOT GIVEN ANY FINDING THAT THE ACTUAL SALE CONSIDERATION IS MORE THAN THE SALE CONSIDERATION ADMITTED AND MENTIONED IN THE SALE AGREEMENT. THUS IT DOES NOT AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. IT IS ALSO NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS FAILED TO FURNISH THE RELEVANT RECORD AS CALLED BY THE AO TO DISCLOSE THE PRIMARY FACTS. THE ASSESSEE HAS FURNISHED ALL THE RELEVANT FACTS, DOCUMENTS / MATERIALS INCLUDING THE SALE AGREEMENT AND THE AO HAS NOT DOUBTED THE GENUINENESS AND VALIDITY OF THE DOCUMENTS PRODUCED BEFORE HIM AND THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE. UNDER THESE FACTS AND CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT FURNISHED CORRECT PARTICULARS OF INCOME. MERELY BECAUSE THE ASSESSEE AGREED FOR ADDITION ON THE BASIS OF VALUATION MADE BY THE STAMP VALUATION AUTHORITY WOULD NOT BE A CONCLUSIVE PROOF THAT THE SALES CONSIDERATION AS PER THIS AGREEMENT WAS INCORRECT AND WRONG. ACCORDINGLY THE ADDITION BECAUSE OF THE DEEMING PROVISIONS DOES NOT IPSO FACTO ATTRACT ITA NO.1694/MUM/2014 ASSESSMENT YEAR: 2009-10 5 THE PENALTY U/S. 271(1)(C). HENCE IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V/S. RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA), THE PENALTY LEVIED U/S. 271(1)(C) IS NOT SUSTAINABLE. THE SAME IS DELETED. 4. IN VIEW OF THE ABOVE SAID CIRCUMSTANCES APPARENT LY THE LEARNED CIT(A) HAS DECIDED THE CASE IN FAVOUR OF TH E ASSESSEE BY RELAYING LAW SETTLED IN COMMISSIONER OF INCOME TAX VS. RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158(SC) . IN VIEW OF THE SAID CIRCUMSTANCES IT IS CONCLUDED THAT IT IS N OT THE CASE OF CONCEALMENT OF FACTS AND FURNISHING INACCURATE PART ICULARS. THEREFORE, FINDING NOT GROUND TO BE INTERFERE WITH THE ORDER PASSED BY THE LEARNED CIT(A) IN QUESTION. WE DISMISSED TH E APPEAL OF THE REVENUE. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH MARCH , 2016. SD/- SD/- (D.KARUNAKARA RAO) (AMARJIT SINGH) ! / ACCOUNTANT MEMBER $% ! /JUDICIAL MEMBER & ' MUMBAI; (! DATED : 11 TH MARCH, 2016 MP MP MP MP ITA NO.1694/MUM/2014 ASSESSMENT YEAR: 2009-10 6 !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. *+, %%-. , -. , & ' / DR, ITAT, MUMBAI 6. ,/0 1 / GUARD FILE. / BY ORDER, * % //TRUE COPY// % / & ' (DY./ASSTT. REGISTRAR) , & ' / ITAT, MUMBAI