The ITO, Ward 14(2), Ahmedabad V. Shri Anilkumar Kanaiyalal Patel, Ahmedabad

ITA 2022/AHD/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8270 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-08-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 29-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PF JAIN
• Keywords: Bonafide belief; Additional evidence; Bonafide mistake

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER !# I.T.A. NO.2022/AHD/2013 ( / ASSESSMENT YEAR : 2009-10) INCOME TAX OFFICER, WARD 14(2), AHMEDABAD. # VS. ANILKUMAR KANAIYALAL PATEL, GURUKRUPA VIDHYALAY, CTM SQUARE, AMRAIWADI AHMEDABAD - 380026 $ # % & # PAN/GIR NO. : ADSPP 7041 B ( !$' / APPELLANT ) .. ( ($' # RESPONDENT ) !$') # APPELLANT BY : SHRI K. MADHUSUDAN, SR.D.R. ($'*) / RESPONDENT BY : SHRI P. F. JAIN, A.R. + ,*-. / DATE OF HEARING 24/10/2017 /012*-. / DATE OF PRONOUNCEMENT 31/10/2017 3# O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-XXI, AHMEDABAD, DATED 02/05/2013 FOR THE ASSESSMENT YEAR (AY) 2009-10, ON THE FOLLOWING GROUNDS: I. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE PENALTY U/S.271(1)(C) OF THE ACT. II. THE LD. CIT(A) ERRED IN LAW IN ADMITTING ADDITIONAL EVIDENCES (AFFIDAVIT) IN VIOLATION OF RULE 46A AND FURTHER ER RED IN RELYING ON THE SAME IN ARRIVING AT THE FINDING OF BONAFIDE MISTAKE. ITA NO.2022/AHD /2013 ITO VS. ANILKUMAR KANAIYALAL PATEL ASST.YEAR 2009-10 - 2 - III. THE LD.CIT (A) ERRED IN ARRIVING AT FACTUAL FINDING OF BONAFIDE MISTAKE WHEN THE FACTS ON RECORD INCLUDING SHOW-CA USE NOTICE OF THE AO INDICATE MALAFIDES AND CLEAR INTENT TO EV ADE SUBSTANTIAL TAX. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- IN THIS CASE, ASSESSEE IS A SALARIED PERSON AND W ORKING AS A TEACHER. ON PERUSAL OF THE DETAILS FILED BY THE ASSESSEE IT NOTICED THAT THE ASSESSEE WITH THREE PERSON SOLD AGRICULTURAL LAND SITUATED A T CHARODI VILLAGE DIST. AHMEDABAD. THIS AGRICULTURAL LAND WAS SALE ON 24/09 /2008. THE TOTAL SALE VALUE WAS RS.5,39,00,000/-. THE ASSESSEE'S SHA RE ON THE SALE CONSIDERATION IS RS.1,34,75,000/-. DURING THE COURS E OF ASSESSMENT PROCEEDING, THE ASSESSEE WAS REQUESTED TO EXPLAIN T HE SALE CONSIDERATION WITH TAXES PAID THEREON. THE ASSESSEE STATED THAT I T WAS AN AGRICULTURAL LAND AND IT DID NOT COME UNDER THE PURVIEW OF INCOM E. THE ASSESSEE WAS APPRAISED WITH FACT THAT SUCH LAND IS SITUATED WITHIN 8 KMS. FROM THE URBAN AREA AND HENCE, TRANSA CTION ATTRACT PROVISION OF SECTION 45 I.E. CAPITAL GAIN. A SHOW-C AUSE NOTICE WAS ISSUED TO THE ASSESSEE. IN THIS REGARD, THE ASSESSE E IN RESPONSE SUBMITTED HIS DETAILED REPLY ON 07/12/2011, WHICH IS REPRODUC E HERE AS UNDER: DURING THE YEAR UNDER REVIEW ASSESSEE HAS NOT PURC HASED ANY IMMOVABLE PROPERTY. HOWEVER LAND HELD AS CO-OWNER W ITH OTHER THREE PERSON AND SITUATED AT CHHARODI, TALUKA DASKROI WAS SOLD FOR RS.5,39,00,000/-. THE ASSESSEE IS HAVING 1/4 TH SHARE IN THE SALES MADE. WE ARE ENCLOSING HEREWITH COPY OF DOCUMENTS OF PURC HASE OF LAND, SALE OF LAND, COPY OF 7/12 SHOWING REVENUE RECORD AND PR OOF AGRICULTURAL ACTIVITIES, COPY OF FORM 8A SHOWING REVENUE RECORD AND PROOF OF AGRICULTURAL LAND OWNERSHIP AS ANNEXURE-2. THE ASSE SSEE HAD SOLD LAND THE LAND AGRICULTURE LAND LOCATED AT VILLAGE CHHARO DI, TA. DASKROI WHICH WAS BOUGHT AS 25% CO-OWNER DURING DECEMBER -2 004. THIS ITA NO.2022/AHD /2013 ITO VS. ANILKUMAR KANAIYALAL PATEL ASST.YEAR 2009-10 - 3 - AGRICULTURAL LAND IS SOLD ON 25-09-2008 FOR 5.39 CR ORES AND ASSESSEE'S SHARE IN SALES CONSIDERATION IS RS.1,34,75,000/- BE ING COMPUTED @25%. THE ASSESSEE FILED HIS RETURN THROUGH ACCOUNTANT, W HO WAS HAVING KNOWLEDGE THAT THE TRANSACTION UNDER QUESTION IS EX EMPT BECAUSE THE LAND SOLD IS AGRICULTURAL LAND AND SAME IS SITUATED BEYOND 8 KM. LIMIT FROM MUNICIPAL CORPORATION. THE ASSESSEE IS A TEACH ER IN PRIVATE SCHOOL AND IS NOT CONVERSANT WITH THE IT LAWS. DUE TO ABOV E REFERRED REASONS THE LONG TERM CAPITAL GAIN INCOME AMOUNTING TO RS.1 ,32,22,199/- COULD NOT BE OFFERED OR TAXATION. THERE WAS NO MALAFIDE I NTENTION IN NOT DECLARING INCOME BUT FOR THE REASONS EXPLANATION HE REIN ABOVE. THE ABOVE REFERRED FACTS WERE EXPLAINED TO THE ASSE SSEE BY THE CHARTERED ACCOUNTANT WHO WAS CONSULTED AFTER GETTIN G THE LETTER FROM IT DEPARTMENT. THE CA EXPLAINED THE PROVISIONS OF THE ACT AND AFTER GETTING THE CLARIFICATION THE ASSESSEE HEREBY SUO M OTO OFFERS THE LONG TERM INCOME AMOUNTING TO RS.1,32,22,199/- AGREEING TO FILE THE REVISED STATEMENT OF INCOME AND PAYING THE TAX AND INTEREST THEREON, THE ASSESSEE THROUGH THIS LETTER PLEADS THAT HE IS A SC HOOL TEACHER IN A PRIVATE SCHOOL AND DOES NOT HAVE ANY KNOWLEDGE ABOU T IT LAWS. FOR BUYING PEACE OF MIND AND AVOIDING UNDUE LITIGATION, THE ASSESSEE VOLUNTARY AGREE TO PAY THE TAX WITH A HUMBLE REQUES T THAT NO PENALTY BE LEVIED UNDER SECTION 271 (1)(C), THE ASSESSEE MAKIN G ARRANGEMENT FOR FUND FOR MAKING THE PAYMENT OF TAX. THE COPY OF COM PUTATION SHOWING LONG TERM CAPITAL GAIN AND THE PROPOSED AND ARRIVED TAX LIABILITY OF RS.43,07,860/-. WHICH THE ASSESSEE AGREE TO PAY IS ENCLOSE AS ANNEXURE-3. BUT LD. AO WAS NOT AGREE WITH THE CONTENTION OF THE ASSESSEE AND MADE AN ADDITION OF RS.1,32,22,199/-. PENAL PROCEED ING UNDER U/S.271(1)(C) WERE SEPARATELY INITIATED. 2.2 IN ORDER PENALTY WAS LEVIED BY THE LD. ITO U/S. 271(1)(C) OF THE I.T. ACT. ITA NO.2022/AHD /2013 ITO VS. ANILKUMAR KANAIYALAL PATEL ASST.YEAR 2009-10 - 4 - 3. AGAINST THE SAID ORDER ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) WHO PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4. NOW APPEAL IS BEFORE US. 5. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. LD.AR CITED AN ORDER OF OUR OWN BENCH IN ITA NO.667 /AHD/2014 FOR ASST. YEAR 2009-10. IN WHICH, ONE OF THE CO-OWNER O F THE SAME PROPERTY, PENALTY WAS DELETED WITH FOLLOWING OBSERVATION: THE UNDISPUTED FACT IS THAT THE PROPERTY SOLD BY T HE ASSESSEE ALONG WITH THREE OTHER PERSONS WAS AGRICULTURAL LAND SITU ATE AT VILLAGE CHHORADI. THE ASSESSEE WAS UNDER A BONA FIDE BELIEF THAT ANY GAINS ARISING OUT OF THE SAID AGRICULTURAL LAND IS EXEMPT FROM TAX. IT IS EQUALLY TRUE THAT WHEN THE AO POINTED OUT THE AGRICULTURAL LAND LIES WITHIN THE MUNICIPAL CORPORATION LIMIT AND IS LIABLE FOR CAPIT AL GAINS TAX. THE ASSESSEE IMMEDIATELY AGREED FOR CAPITAL GAINS TAX L IABILITY. NOT ONLY THE ASSESSEE BUT ALSO ALL THE CO-OWNER; THEIR RESPECTIV E RETURN OF INCOME ACCEPTED THE CAPITAL GAINS TAX LIABILITY. THEREFORE , THE BONA FIDE OF THE ASSESSEE CANNOT BE DOUBTED. IN OUR CONSIDERED OPIN ION, THE LEVY OF PENALTY ON THE GIVEN FACTS IS NOT JUSTIFIABLE AND T HE FIRST APPELLATE AUTHORITY HAS RIGHTFULLY DELETED THE PENALTY AND TH EREFORE, NO INTERFERENCE IS CALLED FOR. 5.2 LD. AR ALSO CITED AN ANOTHER ORDER IN ITA NO.19 75/AHD/2014 FOR ASST. YEAR 2009-10. IN THIS CASE, IT WAS HELD AS UN DER: WHEN THE MATTER WAS AGITATED BEFORE THE LD.CIT(A). IT WAS BROUGHT TO THE NOTICE OF THE LD.CIT(A) THAT IN THE CASE OF THE CO-OWNER OF THE IMPUGNED LAND, THE PENALTY LEVIED BY THE A.O. HAS B EEN DELETED. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE FIRS T APPELLATE AUTHORITY OBSERVED AS UNDER:- 6.3 THUS, ON CONSIDERATION OF ENTIRE FACTS, AFFIDA VIT FILED BY APPELLANT, ORDER OF CIT(A) IN CASE OF ONE OF THE CO -PARTNERS, DECISION OF I.T.A.T. REFERRED SUPRA AND ALSO THE OR DER OF SHRI BHARATBHAI B. PATEL, ONE OF THE CO-OWNER DECIDED BY ME IN ITA NO.2022/AHD /2013 ITO VS. ANILKUMAR KANAIYALAL PATEL ASST.YEAR 2009-10 - 5 - APPEAL NO. CIT(A)/GNR/41/2012-13 DATED 24/12/2013, IT IS HELD THAT APPELLANT HAS NOT WILLFULLY CONCEALED ANY PART ICULARS OF INCOME BUT HAD BONAFIDE BELIEF THAT LAND IS AGRICUL TURAL LAND AND BEYOND 8 KMS AWAY FROM MUNICIPAL LIMITS. THUS, THE CASE LAW RELIED UPON IS SQUARELY APPLICABLE TO THE FACTS OF THE APPELLANT'S CASE. THEREFORE, PENALTY OF RS.29,68,908/- LEVIED B Y AO U/S.271(1)(C) OF THE ACT ON ADDITION OF CAPITAL GAI N ARISING OUT SALE OF AGRICULTURAL LAND IS HEREBY DIRECTED TO BE DELETED. 6. WE FIND THAT THE SAID ORDER OF THE FIRST APPEL LATE AUTHORITY HAS BEEN CONFIRMED BY THE TRIBUNAL IN ITA NO.667/AHD/2014 VI DE ORDER DATED 16/06/2017. THE RELEVANT FINDINGS OF THE TRIBUNAL R EADS AS UNDER:- 9. THE UNDISPUTED FACT IS THAT THE PROPERTY SOLD B Y THE ASSESSEE ALONG WITH THREE OTHER PERSONS WAS AGRICULTURAL LAN D SITUATE AT VILLAGE CHHORADI. THE ASSESSEE WAS UNDER A BONA FID E BELIEF THAT ANY GAINS ARISING OUT OF THE SAID AGRICULTURAL LAND IS EXEMPT FROM TAX. IT IS EQUALLY TRUE THAT WHEN THE A.O. POINTED OUT THE AGRICULTURAL LAND LIES WITHIN THE MUNICIPAL CORPORA TION LIMIT AND IS LIABLE FOR CAPITAL GAINS TAX. THE ASSESSEE IMMED IATELY AGREED FOR THE CAPITAL GAINS TAX LIABILITY. NOT ONLY THE A SSESSEE BUT ALSO ALL THE CO-OWNERS IN THEIR RESPECTIVE RETURN OF INC OME ACCEPTED THE CAPITAL GAINS TAX LIABILITY. THEREFORE, THE BON A FIDE OF THE ASSESSEE CANNOT BE DOUBTED. IN OUR CONSIDERED OPINI ON, THE LEVY OF PENALTY ON THE GIVEN FACTS IS NOT JUSTIFIABLE AN D THE FIRST APPELLATE AUTHORITY HAS RIGHTFULLY DELETED THE PENA LTY AND, THEREFORE, NO INTERFERENCE IS CALLED FOR. 7. AS THE PENALTY HAS BEEN DELETED IN THE CASE OF THE CO-OWNER ON IDENTICAL SET FACTS, WE DO NOT FIND ANY ERROR OR IN FIRMITY IN THE FINDINGS OF THE LD.CIT(A). APPEAL FILED BY THE REVENUE IS AC CORDINGLY DISMISSED. 6. RESPECTFULLY FOLLOWING THE ABOVE SAID TWO ORDERS , WE DISMISS THE APPEAL OF THE DEPARTMENT. ITA NO.2022/AHD /2013 ITO VS. ANILKUMAR KANAIYALAL PATEL ASST.YEAR 2009-10 - 6 - 7. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 31 / 10 /201 7 SD/- SD/- ( ) 4 5 ( N.K. BILLAIYA ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 31/10/2017 PRITI YADAV, SR.PS !'#$ %$' # COPY OF THE ORDER FORWARDED TO : 1. !$' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 67- + 8- / CONCERNED CIT 4. + 8- 4!5 / THE CIT(A)-XXI, AHMEDABAD. 5. 9:;-67 !.!672 ! / DR, ITAT, AHMEDABAD 6. ;<=, # GUARD FILE. & ' / BY ORDER, (9-- //TRUE COPY// (/' )* ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 24/10/2017(DICTATION-PAD 3 PAG ES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 30/10/2017 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER