Radhesham brijlal Rawat, Nashik V. ITO, Nashik

ITA 1727/PUN/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1157 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 24-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N O N E
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition
• Section: 50C; 54F; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 1727/PN/2012 %' ( ')( / ASSESSMENT YEAR : 2008-09 RADHESHAM BRIJLAL RAWAT, 3/A, ISHWAR SANKUL, GAIKWAD MALA, NASHIK ROAD, NASHIK PAN : ACPPR9304P ....... / APPELLANT ' / V/S. INCOME TAX OFFICER, WARD 2(3), NASHIK / RESPONDENT ASSESSEE BY : N O N E REVENUE BY : SHRI SANTOSH KUMAR / DATE OF HEARING : 06-07-2015 / DATE OF PRONOUNCEMENT : 04-09-2015 * / ORDER PER VIKAS AWASTHY, JM : THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, NASHIK DATED 18- 05-2012 FOR THE ASSESSMENT YEAR 2008-09, CONFIRMING THE LEVY OF PENALT Y U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE BRIEF FACTS OF THE CASE ARE : THE ASSESSEE IS AN INDIVIDUAL. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMEN T YEAR 2 ITA NO. 1727/PN/2012, A.Y. 2008-09 2008-09 ON 28-09-2008 DECLARING TAXABLE INCOME OF RS.1,03 ,290/-. THE ASSESSEE SOLD LAND AT IGATPURI ON 18-04-2007. THE ASSESSEE HAD 50% SHARE IN THE SAID LAND. THE REMAINING 50% SHARE WAS OWNED BY POONAMCHAND BRIJLAL RAWAT. THE SAID LAND WAS PURPORTEDL Y SOLD FOR A CONSIDERATION OF RS.4,80,000/- (50% SHARE OF ASSESSEE RS.2,4 0,000/-). THE LAND WAS ALLEGEDLY PURCHASED (50% SHARE) FOR RS.15,752/ - ON 21.12.1990. THE INDEXED COST OF ACQUISITION OF LAND AT THE TIME OF SALE WAS DETERMINED AT RS.47,689/- (50% SHARE). THUS, THE LO NG TERM CAPITAL GAIN ARISING TO THE ASSESSEE FROM THE SALE OF LAND WAS COMPUTE D AT RS.1,92,311/-. THE ASSESSEE PURCHASED A RESIDENTIAL FLA T FOR RS.6,48,020/- ON 22-11-2007 AND CLAIMED EXEMPTION U/S. 54F AGAINST THE LONG TERM CAPITAL GAIN FROM THE SALE OF HIS SHARE IN LA ND AT IGATPURI. IN SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSE SSING OFFICER INVOKED THE PROVISIONS OF SECTION 50C AND DETERMINED THE TOTAL SALE VALUE OF LAND AT IGATPURI AT RS.21,39,000/-, 50% SHARE OF T HE ASSESSEE BEING RS.10,69,500/-. THE ASSESSEE FURNISHED VALUATION CERT IFICATE OBTAINED FROM THE OFFICE OF DY. REGISTRAR, IGATPURI DATED 04- 12-2010 (BASED ON STAMP VALUATION) IN RESPECT OF LAND DETERMINING THE VALUE AT RS.18,94,000/- FOR THE YEAR 2010. THE ASSESSING OFFICER ADO PTED THE SAME AND COMPUTED LONG TERM CAPITAL GAIN AT RS.8,99,311/- . PENALTY PROCEEDINGS U/S. 271(1)(C) WERE INITIATED FOR FURNISHING INACCUR ATE PARTICULARS OF INCOME, AGAINST THE ASSESSEE. THE ASSESSING OFFICER VIDE ORDER DATED 23-06-2011 LEVIED PENALTY OF RS.51,765/- U/S. 271(1)(C) OF THE ACT. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COM MISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER CONFIRMED THE LEV Y OF PENALTY. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL IMPUGNING THE LEVY OF PENALTY. 3 ITA NO. 1727/PN/2012, A.Y. 2008-09 3. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERV ICE OF NOTICE THROUGH RPAD. ON THE PREVIOUS DATE OF HEARING I.E. 19-03 -2015 NONE HAD APPEARED TO REPRESENT ASSESSEE DESPITE SERVICE OF NOTICE. FRESH NOTICE OF HEARING WAS ISSUED TO THE ASSESSEE THROUGH RP AD. A PERUSAL OF AD CARD ON RECORD SHOWS, THAT THE NOTICE HAS BEEN D ULY SERVED ON THE ASSESSEE. IN SPITE OF REPEATED NOTICES NEITHER THE ASSESSEE NOR HIS AUTHORIZED REPRESENTATIVE HAS APPEARED BEFORE US. IT S EEMS THAT THE ASSESSEE IS NOT KEEN TO DEFEND HIS APPEAL EITHER IN PERSO N OR THROUGH ANY OF HIS AUTHORIZED REPRESENTATIVES. WE ARE CONSTRAINE D TO DECIDE THE APPEAL ON THE BASIS OF MATERIALS AVAILABLE ON RECORD. 4. SHRI SANTOSH KUMAR REPRESENTING THE DEPARTMENT VE HEMENTLY SUPPORTED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEA LS) IN CONFIRMING THE PENALTY. THE LD. DR SUBMITTED THAT THE ASSE SSEE HAD FURNISHED INACCURATE PARTICULARS WITH RESPECT TO SALE OF P ROPERTY AT IGATPURI. THE ASSESSING OFFICER DURING ASSESSMENT PROCEED INGS HAD FURNISHED A VALUATION CERTIFICATE FROM THE DY. REGISTRAR, IGAT PURI SHOWING THE VALUE OF LAND AT RS.18,94,000/-, WHEREAS, THE ASSESSEE HAD DISCLOSED THE SALE PRICE OF THE LAND AT RS.4,80,000/-. THE A SSESSING OFFICER RIGHTLY INVOKED THE PROVISIONS OF SECTION 50C FOR DET ERMINING LONG TERM CAPITAL GAIN. THE ASSESSEE ACCEPTED THE SAME AND PAID RS.60,900/- AS TAX ALONG WITH THE INTEREST U/S. 234B AND 234D OF THE ACT. SINCE, THE ASSESSEE HAD ACCEPTED THE ADDITION AND HAS PAID TAX AND INTEREST THEREON, THE PENALTY HAS BEEN RIGHTLY LEVIED . THE LD. DR PRAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE LD. DR AND HAVE PERUSED THE MATERIALS AVAILABLE ON RECORD. PENALTY HAS BE EN LEVIED FOR UNDER STATING LONG TERM CAPITAL GAIN ARISING FROM SALE OF LA ND. AS PER THE SALE DEED THE SALE CONSIDERATION IS STATED TO BE RS.4 ,80,000/-. THE 4 ITA NO. 1727/PN/2012, A.Y. 2008-09 ASSESSING OFFICER SOUGHT VALUATION AS PER STAMP VALUATION A UTHORITY WHICH IS RS.21,39,000/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FURNISHED VALUATION CERTIFICATE DA TED 04-12- 2010 FROM THE OFFICE OF DY. REGISTRAR, CLASS-I, IGATPURI. ACCORDING TO THE CERTIFICATE THE VALUE OF LAND WAS RS.18,94,000/- FOR THE YEAR 2010. THE ASSESSING OFFICER ADOPTED THE SAME AND COMPUTED THE SHA RE OF ASSESSEE IN THE LONG TERM CAPITAL GAIN AS RS.8,99,311/-. T HE CONTENTION OF THE ASSESSEE IS THAT THE VALUE OF LAND AS P ER CERTIFICATE CANNOT BE ADOPTED, AS THE VALUE OF PROPERTY STATED IN VALUATION CERTIFICATE IS WITH RESPECT TO THE YEAR 2010. WHEREAS, TH E PROPERTY WAS SOLD BY THE ASSESSEE ON 18-04-2007. THERE IS A TIME LA G OF 3 YEARS. DURING THESE 3 YEARS, THE VALUE OF PROPERTY HAS APPRECIA TED SUBSTANTIALLY. 6. WE OBSERVE THAT THE ADDITION HAS BEEN MADE BY INVOK ING THE PROVISIONS OF SECTION 50C. IT IS A WELL SETTLED LAW THAT PEN ALTY CANNOT BE LEVIED ON THE ADDITIONS BASED ON ASSUMPTIONS, ESTIMATIONS AND BY INVOKING DEEMING PROVISIONS. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS DISCLOSED THE SALE TRANSACTION OF LAND IN HIS RETURN OF INCOME AND HAS EVEN COMPUTED LONG TERM CAPITAL GAIN THEREON. THE ASSESSEE HAD COMPUTED LONG TERM CAPITAL GAIN ON THE BASIS OF SALE CONS IDERATION STATED IN SALE DEED, WHEREAS, THE ASSESSING OFFICER HAS DETERMINED L ONG TERM CAPITAL GAIN ON THE BASIS OF VALUATION CERTIFICATE SUB MITTED BY THE ASSESSEE FOR THE YEAR 2010. THE ADDITION HAS BEEN MADE BY INVOKING DEEMING PROVISIONS OF SECTION 50C. IN OUR CONSIDERED VIEW IN ASSESSMENT PROCEEDINGS THE PROVISIONS U/S. 50C CAN BE I NVOKED FOR MAKING ADDITION, HOWEVER PENALTY CANNOT BE LEVIED ON THE B ASIS OF SUCH DEEMING PROVISIONS. THE DEPARTMENT CANNOT PRESUME THAT THERE IS A CONCEALMENT OR INACCURATE PARTICULARS ARE FURNISHED. THER E MUST BE INDEPENDENT FINDING. ONCE, THE ASSESSEE HAS FURNISHED THE 5 ITA NO. 1727/PN/2012, A.Y. 2008-09 EXPLANATION, THE ONUS SHIFTS ON THE REVENUE TO PROVE THA T THE EXPLANATION FURNISHED BY ASSESSEE IS WRONG. WE OBSERVE T HAT THE REVENUE HAS NOT DISCHARGED THE ONUS IN PROVING THAT TH E SALE CONSIDERATION STATED IN THE SALE DEED IS WRONG. THEREFORE , IN THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT PENALTY U/S. 271(1)(C) CANNOT BE LEVIED ON SUCH ADDITIONS EVEN IF ADMITTED BY THE ASSESSEE IN QUANTUM PROCEEDINGS. 7. OUR VIEW IS FORTIFIED BY THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF RENU HINGORANI VS. ACIT IN ITA NO. 2210/MUM/ 2010 FOR THE ASSESSMENT YEAR 2006-07 DECIDED ON 22-12-2010. I N THE SAID CASE THE CO-ORDINATE BENCH DELETED THE PENALTY, WHERE THE AD DITION WAS MADE BY THE ASSESSING OFFICER BY APPLYING THE PROVISIONS O F SECTION 50C, SUBSTITUTING THE SALE CONSIDERATION WITH VALUATION MADE BY THE STAMP VALUATION AUTHORITY. THE RELEVANT EXTRACT OF THE FIN DINGS OF THE CO-ORDINATE BENCH IN THE CASE OF RENU HINGORANI VS. ACIT (SUPRA) ARE AS UNDER: 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RE LEVANT RECORD . WE FIND THAT THE AO HAD MADE ADDITION OF RS.9,00,824/- BEING DIFFERENCE BETWEEN THE SALE CONSIDERATION AS PER SALE AGREEMEN T AND THE VALUATION MADE BY THE STAMP VALUATION AUTHORITY. THUS, THE AD DITION HAS BEEN MADE BY THE AO BY APPLYING THE PROVISIONS OF SECTIO N 50C OF THE ACT. IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT THE AO HAS N OT QUESTIONED THE ACTUAL CONSIDERATION RECEIVED BY THE ASSESSEE BUT T HE ADDITION IS MADE PURELY ON THE BASIS OF DEEMING PROVISIONS OF THE IN COME TAX ACT, 1961. THE AO HAS NOT GIVEN ANY FINDING THAT THE ACTUAL SA LE CONSIDERATION IS MORE THAN THE SALE CONSIDERATION ADMITTED AND MENTI ONED IN THE SALE AGREEMENT. THUS IT DOES NOT AMOUNT TO CONCEALMENT O F 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/MATERIA L INCLUDING THE SALE AGREEMENT AND THE AO HAS NOT DOUBTED THE GENUINENES S AND VALIDITY OF THE DOCUMENTS PRODUCED BEFORE HIM AND THE SALE CONS IDERATION RECEIVED BY THE ASSESSEE. UNDER THESE FACTS AND CIRCUMSTANCE S, IT CANNOT BE SAID 6 ITA NO. 1727/PN/2012, A.Y. 2008-09 THAT THE ASSESSEE HAS NOT FURNISHED CORRECT PARTICU LARS OF INCOME. MERELY BECAUSE THE ASSESSEE AGREED FOR ADDITION ON THE BAS IS OF VALUATION MADE BY THE STAMP VALUATION AUTHORITY WOULD NOT BE A CON CLUSIVE PROOF THAT THE SALE CONSIDERATION AS PER THIS AGREEMENT WAS IN CORRECT AND WRONG. ACCORDINGLY THE ADDITION BECAUSE OF THE DEEMING PRO VISIONS DOES NOT IPSO FACTO ATTRACT 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 RE LIANCE PETROPRODUCTS PVT. LTD (SUPRA), THE PENALTY LEVIED U/S 271(1)( C ) IS NOT SUSTAINABLE. THE SAME IS DELETED. 8. THUS, IN VIEW OF THE FACTS OF THE CASE, WE DELETE THE PEN ALTY AND ALLOW THE APPEAL OF THE ASSESSEE ACCORDINGLY. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 04 TH DAY OF SEPTEMBER, 2015. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 04 TH SEPTEMBER, 2015 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-II, NASHIK 4. ' / THE CIT-II, NASHIK 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE