M/s Rajshree Steels Pvt. Ltd., Delhi V. ITO, New Delhi

ITA 1976/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7969 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 05-05-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 04-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KESONG Y SHERPA
• Assessee Lawyers: ADHIR K SAMAL
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C; 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI C.M. GARG: JUDICIAL MEMBER ITA NO. 1976/DEL/2013 ASSTT. YR: 2007-08 M/S RAJSHREE STEELS PVT. LTD., VS. INCOME-TAX OFFI CER, (NOW KNOWN AS RAJSHREE INFRATECH WARD-15(2), NEW DELHI. (P) LTD.), 17, MEERA TOWER (FIRST FLOOR) WAZIRPUR INDUSTRIAL AREA, DELHI-110052. PAN: AAACR 4386 D ( APPELLANT ) (RESPONDENT) APPELLANT BY : SHRI ADHIR K. SAMAL CA RESPONDENT BY : MS. KESONG Y. SHERPA SR. DR DATE OF HEARING : 05/05/2016. DATE OF ORDER : 10/05/2016. O R D E R PER S.V. MEHROTRA, A.M: THIS IS ASSESSEES APPEAL ASSAILING THE ORDER DAT ED 14.12.2012, PASSED BY THE LD. CIT(A)-XVIII, NEW DELHI IN APPEAL NO. 62 /12-13, FOR A.Y. 2007- 08, CONFIRMING THE PENALTY LEVIED BY THE AO U/S 271 (1)(C) OF THE I.T. ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY IN THE RELEVANT ASSESSMENT YEAR WAS ENGAGED IN THE BUSINESS OF CONS TRUCTION. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE COMPANY HAD F ILED RETURN OF INCOME 2 DECLARING NIL INCOME. THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS. 1,18,64,960/-, INTER ALIA, MAKING FOLLOWING ADDITI ONS. (I) RS. 43,75,000/- ON ACCOUNT OF UNDISCLOSED CONSIDERA TION OF PROPERTIES (LAND); AND (II) RS. 93,50,000/- ON ACCOUNT OF UNVERIFIED SHARE APPL ICATION MONEY/ PREMIUM 3. THE AO ALSO INITIATED PENALTY PROCEEDINGS U/S 2 71(1)(C) FOR CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME IN RESPECT OF ABOVE TWO ISSUES AND VIDE PENALTY ORDER DATED 31.3. 2012IMPOSED PENALTY OF RS. 45,29,250/- U/S 271(1)(C) OF THE ACT. IN APPEAL THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT (A) HAS ERRED IN LAW WHILE S USTAINING THE PENALTY AMOUNTING TO RS. 45,29,250/-, LEVIED BY THE LD. AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 . THE PENALTY SO SUSTAINED BY THE LD CIT (A) IS BAD IN L AW AND MAY PLEASE BE DELETED. 2. THAT THE LD. CIT (A) HAS ERRED IN LAW WHILE CON FIRMING THE LEVY & IMPOSITION OF PENALTY U/S 271(1)(C) IN RESPECT OF ADDITION OF RS. 43,75,000/- MADE U/S 50C OF THE IN COME TAX ACT, 1961, WHILE OVERLOOKING THE FACT THAT THE PROP ERTY SOLD WAS HELD AS STOCK-IN-TRADE, AND AS SUCH PROPORTIONATE P ENALTY OF RS. 14,43,750/- (RS. 43,75,000* 45,29,250/ 1,37,25,000) SO CONFIRMED BY THE LD CIT (A) IN RESPECT OF ADDITION OF RS. 43,75,000 MAY PLEASE BE DELETED. 3 3. THAT THE LD CIT (A) HAS ERRED IN LAW WHILE CONFI RMING THE PENALTY U/S 271(1)(C) IN RESPECT OF ADDITION OF RS. 93,50,000/- UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 TREATING THE SHARE APPLICATION MONEY AS UNEXPLAINED AND AS SUCH PROPORTIONATE PENALTY OF RS. 30,85,500/- (93,50,000 *45,29,250/ 1,37,25,000) SO CONFIRMED BY THE LD CIT (A) IN RESP ECT OF ADDITION OF RS. 93,50,000 MAY PLEASE BE DELETED. 4. THAT THE LD CIT (A) HAS ERRED IN LAW WHILE PASSI NG THE PENALTY ORDER U/S 271(1)(C) DATED 30.01.2013, WHER E ASSESSEE PREFERRED AN APPEAL AGAINST THE ORDER OF FIRST APPE LLATE AUTHORITY ON QUANTUM DATED 14.12.2012 BEFORE HONBLE INCOME T AX APPELLATE TRIBUNAL VIDE ACKNOWLEDGEMENT DATED 29.01 .2013, AND AS SUCH PASSING THE APPELLATE ORDER U/S 250 REA D S. 271(1)(C) DATED 30.01.2013, PENDING THE QUANTUM APP EAL BEFORE HON'BLE ITAT IS BAD IN LAW MAY PLEASE BE NULLIFIED. 5. THAT WE CRAVE TO ADD, ALTER, DELETE, MODIFY OR W ITHDRAW ANY OF THE ABOVE GROUNDS AT THE TIME OF HEARING. 4. LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMI TTED THAT IN QUANTUM APPEAL THE ITAT DELHI BENCH F VIDE ITS ORDER DATE D 19.2.2016 IN ITA NO. 518/DEL/2013, QUA THE FIRST ADDITION, ON ACCOUNT OF UNDISCLOSED CONSIDERATION OF PROPERTIES, HAS DELETED THE ADDITION. THEREFO RE, NO PENALTY SURVIVES IN RESPECT OF THIS ADDITION. 4.1. HOWEVER, QUA SECOND ADDITION THE TRIBUNAL HAS RESTORED THE MATTER BACK TO THE FILE OF AO, INTER ALIA, OBSERVING AS UN DER: 8. IT APPEARS FROM THE ORDER OF THE ID.CIT(A) THAT THE AO HAD ISSUED SUMMONS U/S 133(6) OF THE INCOME-TAX ACT TO CONFIRM THE GENUINENESS OF THE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE. IN RESPONSE TO THE SAME, THE LD. AO HAD R ECEIVED THE NECESSARY DETAILS FROM SIX PARTIES. IN RESPECT OF S HRI CHARANJEET KAUR, SHRI MANJEET SINGH SANDHU AND SMT. SUNEET SAN DHU THE 4 LD. AO DID NOT RECEIVE ANY RESPONSE. HOWEVER, IT WA S INFORMED BY THE FATHER OF SHRI MANJEET SINGH SANDHU THAT ALL THE THREE PERSONS HAVE LEFT INDIA AND HAVE NOT COME BACK TILL DATE. HE ALSO FILED DETAILS LIKE BANK STATEMENTS, WHICH SHOW N THE CREDIT WORTHINESS OF ALL THE THREE PARTIES AND GENUINENESS OF THE PAYMENTS MADE BY THEM TO THE ASSESSEE. 9. AT THIS JUNCTURE, THE LD. AR SUBMITS THAT THIS I SSUE CAN BE SENT BACK TO THE LD. AO FOR VERIFICATION FROM THE BANK I N RESPECT OF THE MONIES HELD BY THE PARTIES. 10. THE LD. DR DOES NOT OBJECT THE SUBMISSIONS MADE BY THE LD. AR. WE ACCORDINGLY SET ASIDE THIS ISSUE TO THE FILE OF THE LD. AO FOR VERIFICATION OF THE DETAILS TO BE FILED BY THE ASSESSEE . 4.2. LD. COUNSEL SUBMITTED THAT SINCE IN QUANTUM A PPEAL THE ISSUE RELATING TO ADDITION ON ACCOUNT OF UNVERIFIED SHARE APPLICAT ION MONEY/ PREMIUM, HAS BEEN RESTORED TO THE FILE OF AO FOR FRESH ADJUDICAT ION, THEREFORE, NO PENALTY UNDER SECTION 271(1)(C) SURVIVES IN RESPECT OF THIS ADDITION ALSO. 5. LD. DR RELIED ON THE ORDERS OF LOWER REVENUE AU THORITIES. 6. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IN QUANTUM APPEAL THE ITAT HAS DELETED THE ADDITION OF RS. 43,75,000/-, MADE ON ACCOUNT OF UNDISCLOSED CONSIDERATION OF PROPERTIES (LAND), INTER ALIA, HOLDING THAT PROVISI ONS OF SECTION 50C WERE NOT APPLICABLE TO ASSESSEES CASE. IN THAT VIEW OF THE MATTER, PENALTY LEVIED BY THE AO, ON THIS ISSUE, HAS NO LEGS TO STAND. 6.1. AS REGARDS THE ADDITION OF RS. 93,50,000/- ON ACCOUNT OF UNVERIFIED SHARE APPLICATION MONEY/ PREMIUM, SINCE IN QUANTUM APPEAL THE ITAT HAS RESTORED THE MATTER TO THE FILE OF LD. AO, IMPUGNED PENALTY LEVIED U/S 271(1)(C) ON THIS ISSUE CANNOT BE SUSTAINED. ACCOR DINGLY, ORDER OF LD. CIT(A), CONFIRMING THE ACTION OF LD. AO ON THIS ISS UE IS SET ASIDE. HOWEVER, 5 LD. AO WOULD BE FREE TO INITIATE FRESH PENALTY PROC EEDINGS, IN ACCORDANCE WITH LAW, DEPENDING ON THE OUTCOME OF THE ISSUE RE STORED TO HIS FILE. 7. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED , ACCORDINGLY. ORDER PRONOUNCEMENT IN OPEN COURT ON 10/05/2016. SD/- SD/- (C.M. GARG) (S.V. MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 10/05/2016. *MP* COPY OF ORDER TO: 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI.