A.Kasthuribai, CHENNAI V. ITO, Trichy

ITA 1912/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96265 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 07-10-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 08-07-2014
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SRIDHAR
• Keywords: Sale consideration of property below Jantri Value; Valuation report
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI , . ! '# , $ %& ' [ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ] ./ I.T.A.NO.1912/MDS/2014 / ASSESSMENT YEAR : 2010-11 SMT. A. KASTHURIBAI C-3/64, BHEL TOWNSHIP KAILASAPURAM TIRUCHIRAPALLI 620 014 VS. THE INCOME TAX OFFICER WARD I(4) TIRUCHIRAPALLI [PAN AALPK 8321 R ] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE /RESPONDENT BY : SHRI A.V.SREEKANTH, JCIT / DATE OF HEARING : 07 - 10 - 2015 / DATE OF PRONOUNCEMENT : 16 - 10 - 2015 , / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEEE IS DIRECTED AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), TIRUC HIRAPALLI, DATED 9.4.2011 PASSED IN I.T.A.NO.203/13-14(CIT(A)/TRY, C ONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1 )(C) OF THE INCOME- TAX ACT, 1961 (IN SHORT THE ACT) FOR THE ASSESSME NT YEAR 2010-11. ITA NO.1912/14 :- 2 -: 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS AN INDIVID UAL AND FILED RETURN OF INCOME BY DECLARING TOTAL INCOME OF `6,97,700/-. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED U/S 143(1) OF THE ACT AND AFTER DUE PROCESS, THE ASSESSMENT WAS COMPLETED U/S 143( 3) OF THE ACT. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS MAD E ADDITIONS IN RESPECT OF CAPITAL GAINS OF ` 5,75,000/-, DIFFERENCE IN COST OF CONSTRUCTION OF ` 1,42,982/- AND UNEXPLAINED DEPOSIT TO THE EXTENT O F ` 75,000/-. 3. THEREAFTER, THE ASSESSING OFFICER HAS INITIATED PEN ALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. IN THE PEN ALTY ORDER, IN RESPECT OF ` 5,75,000/-, THE ASSESSING OFFICER HAS OBSERVED THA T THE ASSESSEE HAD SOLD THE IMMOVABLE PROPERTY TO SHRI A.RAMAMOORT HY FOR A SALE CONSIDERATION OF ` 16,50,000/- AS PER THE SALE DEED. EVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS ADMITTED THE SALE CONSIDERATION AS ` 16,50,000/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER SUMMONED THE PUR CHASER OF THE PROPERTY AND STATEMENT WAS RECORDED. THE PURCHASER STATED THAT THE PROPERTY WAS PURCHASED FOR A CONSIDERATION OF ` 20,75,000/- FOR WHICH HE MADE PAYMENT OF ` 15 LAKHS BY CHEQUE AND ` 5,75,000/- IN CASH. THE SAME WAS CONFRONTED TO THE ASSESSEE. THE ASS ESSEE HAS OFFERED THE DIFFERENCE OF ` 5,75,000/- FOR ASSESSMENT. ACCORDING TO THE ITA NO.1912/14 :- 3 -: ASSESSING OFFICER, THE ASSESSEE HAS CONCEALED THE AMOUNT OF ` 5,75,000/- AND PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIED. 4. ON APPEAL, THE CIT(A) HAS CONFIRMED THE ORDER OF TH E ASSESSING OFFICER. 5. BEFORE US, THE LD. COUNSEL SUBMITTED THAT BASED ON THE STATEMENT GIVEN BY THE PURCHASER, ADDITION WAS MADE AND NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO CROSS EXAM INE THE PURCHASER. HE ALSO SUBMITTED THAT THE ASSESSEE WANTED TO BUY PEACE OF MIND, THEREFORE, HE ACCEPTED THE ADDITION AND PAID THE TA XES. THE PENALTY MAY, THEREFORE, BE DELETED. 6. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT THE A SSESSEE HAS RECEIVED AN AMOUNT OF ` 20,75,000/- AND HE HAS SHOWN ONLY ` 16,50,000/- FOR TAXATION. THEREFORE, THE BALANCE A MOUNT OF ` 5,75,000/- IS CONCEALED INCOME AND THE CIT(A) HAS R IGHTLY CONFIRMED THE PENALTY. 7. AFTER CONSIDERING THE ARGUMENTS OF BOTH SIDES AND P ERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE HAS SOLD THE PROPERTY TO ONE SHRI A. RAMAMOORTHY FOR A SALE CONSIDERATION OF ` 16,50,000/-. AS PER THE SALE DEED, THE ASSESSEE H AS RECEIVED THE SAME AMOUNT. WHEN THE ASSESSING OFFICER ASKED THE PURCHASER, HE ITA NO.1912/14 :- 4 -: STATED THAT HE HAS PURCHASED THE PROPERTY FOR A CON SIDERATION OF ` 20,75,000/-. THE ASSESSING OFFICER, THEREFORE, CAM E TO THE CONCLUSION THAT THE ASSESSEE HAS UNDERSTATED THE SALE CONSIDE RATION. BY INVOKING SECTION 50C OF THE ACT, HE ADDED ` 5,75,000/- AS UNDISCLOSED INCOME AND INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) O F THE ACT. WE ARE UNABLE TO UNDERSTAND AS TO HOW THE ASSESSING OFFICE R HAS INVOKED SEC. 50C OF THE ACT. THE SALE CONSIDERATION OF ` 16,50,000/- RECEIVED BY THE ASSESSEE IS AS PER THE SALE DEED AND IT IS ACC ORDING TO THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY. THEREFORE , THIS ADDITION CANNOT BE SUSTAINED U/S 50C OF THE ACT. INSOFAR A S THE STATEMENT GIVEN BY THE PURCHASER IS CONCERNED, THE ASSESSEE WAS NOT GIVEN ANY OPPORTUNITY TO CROSS EXAMINE THE PURCHASER. THE AS SESSING OFFICER HAS ONLY ASKED THE ASSESSEE BY QUOTING THE STATEMENT G IVEN BY THE PURCHASER AND ADDITION WAS MADE. THE ASSESSEE ACCE PTED THE ADDITION MADE BY THE ASSESSING OFFICER AND TAXES WE RE PAID ACCORDINGLY. IN OUR OPINION, SIMPLY ACCEPTING THE A DDITION MADE BY THE ASSESSING OFFICER AMOUNTS TO NEITHER CONCEALMENT NO R FURNISHING INACCURATE PARTICULARS OF INCOME. THUS, IT IS NOT A FIT CASE FOR LEVYING PENALTY U/S 271(1)(C) OF THE ACT. WE, THEREFORE, CANCEL THE PENALTY ON THIS COUNT. 8. THE ASSESSING OFFICER HAS INITIATED PENALTY ON ACCO UNT OF DIFFERENCE IN COST OF CONSTRUCTION BASED ON THE VAL UATION REPORT ITA NO.1912/14 :- 5 -: REFERRED BY THE ASSESSING OFFICER AND BASED ON THE REPORT SUBMITTED BY THE ASSESSEE. WE FIND THAT THE PENALTY IMPOSED BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE IN THE COST OF CON STRUCTION BASED ON THE VALUATION REPORT CANNOT BE SAID THAT IT IS EITH ER CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. THEREFORE, WE CANCEL THE PENALTY ON THIS COUNT ALSO. 9. INSOFAR AS UNEXPLAINED DEPOSIT OF ` 75,000/-, OUT OF THE TOTAL DEPOSITS MADE BY THE ASSESSEE OF ` 5 LAKHS, THE ASSESSEE WAS ABLE TO EXPLAIN THE SOURCE TO THE EXTENT OF ` 4,25,000/- AND WAS UNABLE TO SUBSTANTIATE THE REMAINING AMOUNT OF ` 75,000/-. IN OUR OPINION, IT DOES NOT AMOUNT TO EITHER CONCEALING THE INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THEREFORE, IT IS NOT A FIT CASE TO LEVY PENALTY U/S 271(1)(C) OF THE ACT. THUS, THE PENA LTY LEVIED BY THE ASSESSING OFFICER IS CANCELLED ON THIS COUNT ALSO. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 1 6 TH OF OCTOBER, 2015, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! '# ) ( V. DURGA RAO ) $ / JUDICIAL MEMBER !' / CHENNAI #$ / DATED: 16 TH OCTOBER, 2015 RD ITA NO.1912/14 :- 6 -: $%&& '(&)( / COPY TO: & 1 . / APPELLANT 3. & *&+, / CIT(A) 5. (-.& / / DR 2. / RESPONDENT 4. & * / CIT 6. .0&1 / GF