Shri Jatinbhai Bhanubhai Patel, Ahmedabad V. The Income tax Officer,Ward-10(3), Ahmedabad

ITA 1951/AHD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0281 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-12-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 31-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA
• Keywords: Value adopted by valuation officer; Opportunity of being heard; Principle of natural justice; Cost of acquisition; Fair market value
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI D.K.TYAGI , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO. 1951/AHD/2012 ASSESSMENT YEARS :2005-06 JATINBHAI BHANUBHAI PATEL, 17, SHIVALIK, NR. ANAND NAGAR, SATELLITE, AHMADABAD - 380015 V/S . ITO, WARD 10(3), AHMEDABAD PAN NO. A A UPP1288P (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI SAKAR SHARMA, A.R. /BY RESPONDENT SHRI Y.P. VERMA, SR. DR /DATE OF HEARING 28.12.2012 /DATE OF PRONOUNCEMENT 15.02.2013 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WHI CH HAS EMANATED FROM THE ORDER OF CIT(A)-XVI, AHMEDABAD, DATED JUNE 1, 2012 FOR A.Y. 2005- 06. THE SOLE GROUND OF APPEAL IS AGAINST CONFIRMING PENALTY U/S. 271(1)(C) AT RS. 1,00,023/- FOR A.Y. 05-06. 2. THE APPELLANT FILED RETURN OF INCOME FOR A.Y, 05 -06 AT NIL INCOME ON 31.10.2005. IN THIS CASE, SCRUTINY ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE IT ACT ON 20.12.2007. THE ASSESSEE HAS SHOWN P ROFIT ON SALE OF FLAT AT ITA NO. 1951/AHD/12 A.Y. 05-06 PAGE 2 RS.65,000/- IN P&L ACCOUNT FILED ALONGWITH THE RETU RN OF INCOME. THE APPELLANT HAD TAKEN COST OF ACQUISITION OF THIS FLAT AS ON 01 .04.1981 AT RS. 1,45,000/-, WHEREAS AS PER FINDING OF THE A.O., THE ASSESSEE HA S PURCHASED THIS FLAT AT RS.65,000/- ON 30.09.1982. ACCORDINGLY, AFTER ALLO WING THE INDEXATION ON RS.65,000/- FROM 30.09.1982 TO DATE OF SALE I.E. 31 .12.2004, THE LONG TERM CAPITAL GAIN WAS CALCULATED AT RS.5,13,761/-. AFTE R REDUCING THE CAPITAL GAIN SHOWN BY THE APPELLANT AT RS.1,04,000/-, THE DIFFER ENCE OF RS. 4,09,761/- WAS ADDED IN THE INCOME OF THE ASSESSEE. ACCORDINGLY, PENALTY PROCEEDING U/S.271(1)(C) WAS INITIATED FOR CONCEALING THE INCO ME AND FURNISHING INACCURATE PARTICULARS OF INCOME. SIMILARLY, THE A PPELLANT HAD CLAIMED INTEREST EXPENSES OF RS.67,114/- TWICE, WHICH WAS DISALLOWED AND ADDED TO THE TOTAL INCOME AND FOR WHICH PENALTY PROCEEDING IS INITIATE D U/S.271(1)(C) FOR CONEALING THE INCOME AND FURNISHING INACCURATE PART ICULARS OF INCOME. 3. THE ASSESSEE CARRIED THE QUANTUM ADDITION BEFORE THE CIT(A), WHO HAD CONSIDERED REMAND REPORT ALONGWITH DEPARTMENT VALUE R REPORT. AFTER VERIFYING BOTH GOVERNMENT VALUER REPORT AS WELL AS DVO REPORT, HE ESTIMATED THE FAIR MARKET VALUE AT RS.65,000/- AS T HE APPELLANT PURCHASED THIS FLAT IN OCTOBER 1980 FOR RS.60,000/-. EVEN THROUGH , THE SALE DEED WAS EXECUTED ON 30.09.1981 FOR RS.65,000/-. IN APPEAL EFFECT ORDER, THE NET LONG TERM CAPITAL GAIN WAS WORKED OUT AT RS. 4,88,000/- ON TAX OF RS.97,600/-. THE APPELLANT WAS AFFORDED REASONABLE OPPORTUNITY O F BEING HEARD ON BOTH THE ISSUES BEFORE IMPOSING THE PENALTY WHICH HAS BEEN C ONSIDERED BY THE A.O., ITA NO. 1951/AHD/12 A.Y. 05-06 PAGE 3 BUT THE SAME WAS NOT FOUND CONVINCING TO HIM. THER EFORE, HE IMPOSED 100% PENALTY OF RS.1,23,000/- ON TAX SOUGHT TO BE EVADED . 4. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE CARRIED THE PENALTY ORDER PASSED U/S.271(1)(C) BEFORE CIT(A), W HO HAD DISMISSED THE APPEAL ON THE GROUND THAT THE LD. A.O. HAD GIVEN RE ASONABLE OPPORTUNITY OF BEING HEARD BEFORE IMPOSING THE PENALTY ON 21.03.20 11. THE APPELLANT DID NOT MAKE ANY COMPLIANCE OF THE NOTICE AND HE DID NOT MA KE COMPLIANCE TO THE STATUTORY NOTICE AND REASONS WHY THE IMPUGNED PENAL TY ORDER WAS NOT CONTESTED BEFORE THE A.O. THE APPELLANT HAD NOT RA ISED THE ISSUE ON VALUATION OF PRINCIPLE OF NATURAL JUSTICE BEFORE THE CIT(A). BY NOT RESPONDING THE STATUTORY NOTICE ISSUED BY THE A.O. OR TO SAY AVAIL ING THE OPPORTUNITY OF BEING HEARD, THE APPELLANT HAS DEEMED TO HAVE ACCEPTED TH E CONSEQUENCES OF NOTICE U/S.271(1)(C). THE LD. CIT(A) DID NOT FIND ANY GRIEVANCE WHICH COULD BE ADDRESSED AT THE TIME OF APPEAL. THEREFORE, HE CON FIRMED THE PENALTY. 5. NOW THE ASSESSEE IS BEFORE US. LD. COUNSEL FOR THE APPELLANT CONTENDED THAT ADDITION CONFIRMED BY THE CIT(A) IS DEBATABLE AND THE CLAIM OF INTEREST HAS BEEN CLAIMED TWICE THROUGH OVER SIGHT. HE FURTHER RELIED UPON IN CASE OF PRICE WATERHOUSE COOPERS (P.) LTD. V. CIT (2012) 34 8 ITR 306 (SC) AND CLAIMED THAT IT WAS A SILLY MISTAKE MADE BY THE APPELLANT. HE RELIED IN CASE OF NEW SORATHIA ENGINEERING COMPANY VS. CIT 282 ITR 642 (GUJARAT HIGH COURT) AND CLAIMED THAT THERE ARE NO SPECIFIC FINDINGS OF THE A.O. WHETHER PENALTY WAS INITIATED FOR INACCURATE PARTICULARS OR CONCEALMENT OF INCOME. THEREFORE, HE REQUESTED TO DELETE THE PENALTY. AT THE OUTSET, LD. SR. D.R. ITA NO. 1951/AHD/12 A.Y. 05-06 PAGE 4 ARGUED THAT PRICE WATERHOUSE COOPERS (P.) LTD. V. C IT (SUPRA), IS NOT SQUARELY APPLICABLE IN CASE OF THE APPELLANT AS THERE WAS A REMARK IN AUDIT REPORT ABOUT GRATUITY PROVISION NOT ALLOWABLE BY THE AUDITOR WHI CH HAD NOT BEEN ADDED IN THE COMPUTATION OF INCOME BY THE APPELLANT WHEN NOT ICE ISSUED BY THE A.O. U/S. 148. THE APPELLANT ADMITTED THE MISTAKE BEFOR E THE A.O. AND REVISED THE RETURN ON SAME DAY. HE FURTHER RELIED IN CASE OF Z OOM COMMUNICATION (DELHI HIGH COURT), WHEREIN HONBLE APEX COURT IN CASE OF RELIANCE PETRO-CHEM HAS BEEN CONSIDERED. IT WAS CONTENDED THAT IN CASE OF ZOOM COMMUNCIATION, THE INCOME TAX DEBITED IN THE P&L ACCOUNT HAD NOT BEEN ADDED BACK BY THE APPELLANT. THEREFORE, HONBLE DELHI HIGH COURT CON FIRMED THE PENALTY U/S.271(1)(C). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. LD. A.O. SPECIFICALLY HELD IN PENALTY ORDE R AS THE ASSESSEE HAS FURNISHED INACCURATE OF HIS INCOME AND THEREBY CON CEALING HIS INCOME TO THE EXTENT OF RS. 5,47,114/-. THE ASSESSEE HAD NOT FI LED ANY REPLY BEFORE THE A.O. AND THE A.O. HAS NOT VIOLATED THE PRINCIPLE OF NATURAL JUSTICE. THERE WAS NOT GROUND OF APPEAL BEFORE THE CIT(A) OF VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. THUS, THE CIT(A) WAS RIGHT IN CONFIRMING THE ORDER. HOWEVER, IN THE INTEREST OF JUSTICE, THE ASSESSEE IS ALLOWED ONE MO RE OPPORTUNITY TO EXPLAIN THE REASONS FOR NOT IMPOSING PENALTY BY THE A.O. WE SE T ASIDE THE ORDER OF THE A.O. THE ASSESSEE IS DIRECTED TO MAKE FULL COMPLIA NCE OF THE NOTICE OF THE A.O. ITA NO. 1951/AHD/12 A.Y. 05-06 PAGE 5 7. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. THIS ORDER PRONOUNCED IN OPEN COURT ON 15.02.2013 SD/- SD/- ( D.K.TYAGI ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ;