PARASMAL C. RANKA, MUMBAI V. ASST CIT 14(1), MUMBAI

ITA 1877/MUM/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79443 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 19-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law; Wrong claim
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO , JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.1877/M/2014 ( / ASSESSMENT YEAR: 2004 - 2005 ) SHRI PARASMAL C RANKA, PROP. M/S. PARAS CHAINS, KAPADIA BUILDING NO.2, 2 ND FLOOR, 191 ZAVERI BAZAR, MUMBAI - 02. / VS. ACIT - 14(1), MUMBAI. ./ PAN : AAAPR 6900 N ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VIMAL PUNMIYA / RESPONDENT BY : SHRI SUNIL KUMAR AGARWAL / DATE OF HEARING : 9.7.2014 / DATE OF PRONOUNCEMENT : 18 .7.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 19.3.2014 IS AGAINST THE ORDER OF THE CIT (A) - 25, MUMBAI DATED 28.2.2014 FOR THE ASSESSMENT YEAR 2004 - 2005. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN CONFIRMING THE PENALTY OF RS. 4,76,350/ - U/S 271(1)(C) OF THE ACT. 2. THE LD CIT (A) FAILED TO CONSIDER THAT ISSUE IS ALREADY ADMITTED BY HONBLE HIGH COURT ON QUESTION OF LAW , THEREFORE PENALTY CANNOT BE LEVIED. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURERS / DEALERS OF GOLD CHAINS / ORNAMENTS. DURING THE PROCEEDINGS BEFORE THE AO, ASSESSEE CLAIMED EXEMPT ION U/S 54F OF THE ACT ON PURCHASE OF 13% WIFE SHARE IN FLAT NO.101 AND 102. ASSESSEE EARNED LONG TERM CAPITAL GAI NS ON SALE OF SHARES. AO DENIED THE SAID CLAIM OF EXEMPTION HOLDING THAT 2 ASSESSEE PURCHASED 13% SHARE IN BOTH THE FLATS. DURING THE FIRST A PPELLATE PROCEEDINGS, CIT (A) ALLOWED THE SAID CLAIM OF THE ASSESSEE BY HOLDING THAT BOTH THE FLATS ARE ADJACENT TO EACH OTHER AND THEY WERE USED AS ONE FUNCTIONAL UNIT. SIMILAR CLAIM OF THE ASSESSEE WAS ALLOWED BY THE CIT (A) IN THE EARLIER ASSESSMENT YE AR 2003 - 04, WHICH WAS CONFIRMED BY THE ITAT VIDE ITS ORDER DATED 30.11.2010. IN THE CURRENT YEAR, THE ITAT DENIED THE EXEMPTION ON THE GROUND THAT PURCHASE OF ADDITIONAL 13% RIGHT IN EACH OF THE FLAT IS NOT ELIGIBLE FOR EXEMPTION U/S 54F OF THE ACT. ASSE SSEE IS IN APPEAL BEFORE THE HONBLE HIGH COURT AGAINST THE SAID ORDER OF THE TRIBUNAL FOR THE AY 2004 - 05, DATED 10.12.2012. THE HONBLE HIGH COURT ADMITTED THE APPEAL AND THE MATTER IS STILL PENDING. IN THE BACKGROUND OF THE ABOVE, THE AO LEVIED THE PEN ALTY RELYING ON THE ORDER OF THE TRIBUNAL FOR THE AY 2004 - 2005 TO THE EXTENT OF RS.4,76,350/ - ON THE GROUND THAT THE ASSESSEE HAS INCREASED THE SHARE BY 13% IN EACH OF THE TWO FLATS NO.101 AND 102 AND THE CLAIM OF EXEMPTION U/S 54F CONSTITUTES WRONG CLAIM AND IT ATTRACTS PENALTY U/S 271(1)(C) OF THE ACT . THE SAID PENALTY IS CONFIRM ED BY THE CIT (A) AND THEREFORE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 4. AT THE OUTSET, LD COUNSEL FOR THE ASSESE MENTIONED THAT THE SIMILAR CLAIM OF EXEMPTION U/S 54F IS VARIEDLY DECIDED BY VARIOUS OFFICERS NAMELY AO, CIT (A) AND THE TRIBUNAL OVER THE YEARS . THEREFORE, IT IS THE CASE OF VARIOUS INTERPRETATIONS AND THE ISSUE IS DEBATABLE. OTHERWISE, ASSESSEE HAS NOT CONCEALED ANY PARTICULARS AND THE FACTS ARE CLEARLY MENTIONED IN THE RETURN OF INCOME AND THE VARIOUS OFFICERS HAVE INTERPRETED THE CLAIM DIFFERENTLY. IN THESE CIRCUMSTANCES, THE PENALTY IS NOT LEVYABLE. FOR THIS PROPOSITION, LD COUNSEL RELIED ON THE JUDGMENT OF THE H ONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. CHANDABEN MAGANLAL [2000] 245 ITR 182 (GUJ), WHICH IS COMPARABLE TO THE PRESENT CASE. HE ALSO RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS LTD [2010] 189 TAXMAN 322 (SC) FOR THE PROPOSITION THAT THE PENALTY IS NOT LEVYABLE BEFORE THE ASSESSEE HAD CLAIMED EXPENDITURE IN THE RETURN OF INCOME. 5. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 6. WE HAVE HEARD BOTH THE PARTIES AND PE RUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED JUDGMENTS OF THE HIGHER JUDICIARY. ON HEARING BOTH 3 THE PARTIES, WE FIND THAT THERE IS NO INCRIMINATING MATERIAL BROUGHT IN BY THE AO TO DEMONSTRATE THAT THE EXPLANATION GIVEN BY THE ASSESSEE IS WRONG AND MALA FIDE. AS SUCH, WE FIND VARIOUS OFFICERS HAVE TAKEN DIFFERENT INTERPRETATIONS ON THE SAME FACTS AVAILABLE ON THE RETURN AND RECORD. THIS INDICATES THE DEBATABILITY OF THE CLAIM OF EXEMPTION U/S 54F OF THE ACT. ON FINDING THAT THERE IS NO MATERIAL TO DEMONSTRATE THE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS, WE ARE OF THE OPINION THAT THIS IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED . 7. IN T HE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRON OUNCED IN THE OPEN COURT ON 1 8 T H JULY, 2014. S D / - S D / - (VIJAY PAL RAO) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 1 8 .7.2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI