ITO, UDAIPUR V. Shri Chok Chand Nagda (HUF), UDAIPUR

ITA 203/JODH/2010

• Counselvise Citation: 20323314 RSA 2010
• Duration Of Justice: 1 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-12-2011
• Assessment Year: 1999-2000
• Appeal Filed On: 05-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R H GOHEL
• Keywords: Business income; Fair market value; Difference of opinion
• Section: 143(3)

Judgement Text

1 ITA 203(3)-10 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 203/JODH/2010 ASSTT. YEAR : 1999-2000. THE INCOME-TAX OFFICER, VS. SHRI CHOK CHAND NAGDA HUF, WARD 2(2), VILLAGE: SISARMA, TEHSIL GIRVA, UDAIPUR. UDAIPUR. ITA NO. 204/JODH/2010 ASSTT. YEAR : 1999-2000. THE INCOME-TAX OFFICER, VS. SHRI DHANNALAL NAGDA HUF, WARD 2(2), VILLAGE: SISARMA, TEHSIL GIRVA, UDAIPUR. UDAIPUR. ITA NO. 205/JODH/2010 ASSTT. YEAR : 1999-2000. THE INCOME-TAX OFFICER, VS. SHRI KESULAL NAGDA HU F, WARD 2(2), VILLAGE: SISARMA, TEHSIL GIRVA, UDAIPUR. UDAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.H. GOHEL RESPONDENT BY : SHRI SHRAWAN KUMAR GU PTA DATE OF HEARING : 09.12.2011. DATE OF PRONOUNCEMENT : 15.12.2011. ORDER DATED : 15/12/2011. PER BENCH : THESE ARE THREE APPEALS BY DEPARTMENT AGAINST THRE E DIFFERENT ASSESSEES I.E. SHRI CHOK CHAND NAGDA HUF, SHRI DHANNALAL NAGDA HUF AND SHRI KESULAL NAGDA HUF. 2 2. IDENTICAL FACTS ARE INVOLVED IN THESE THREE APPE ALS, THEREFORE, THEY ARE BEING DISPOSED OFF TOGETHER. 3. THE APPEALS ARE AGAINST DELETING THE PENALTY LEV IED UNDER SECTION 271(1)(C) RELATING TO RS. 1999-2000 IN CASE OF ALL THE THREE ASSESSEES. 4. WE WILL DISCUSS THE FACTS IN CASE OF SHRI CHOK C HAND NAGDA HUF AND THE OUTCOME OF THE SAME WILL BE APPLICABLE IN ALL THE T HREE CASES AS THE FACTS ARE IDENTICAL. 5. ASSESSEE FILED RETURN DECLARING INCOME OF RS. 2, 60,300/- ON 30.9.1999 WHICH INCLUDED INCOME FROM LONG TERM CAPITAL GAIN AT RS. 2,50,300/- AND BUSINESS INCOME AT RS. 10,000/- BESIDES AGRICULTURAL INCOME OF RS. 20,000/ -. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) AND LONG TERM CAPITAL GAIN WAS ASSESSED AT RS. 37,00,837/- AGAINST LOAN TERM CAPITAL GAIN SHOWN AT RS. 2,50,300/-. SI NCE THERE WAS NO REGULAR BUSINESS ACTIVITY, THE INCOME FROM BUSINESS SHOWN HAS BEEN C ONSIDERED AS INCOME FROM OTHER SOURCES. INCOME ON FDR WAS ALSO ASSESSED AS INCOME FROM OTHER SOURCES AFTER PROVIDING DEDUCTION UNDER SECTION 80L. THE ASSESSING OFFICER WHILE COMPUTING LONG TERM CAPITAL GAIN, HE OBSERVED THAT ASSESSEE HAS SOLD AGRICULTUR AL LAND ADMEASURING 31 BIGHAS LOCATED IN VILLAGE SISARMA, TEHSIL GIRWAL, DISTRICT UDAPUR ALONG WITH CO-OWNERS HUFS. TOTAL SALE CONSIDERATION RECEIVED WAS SHOWN AT RS. 1,24,0 0,000/- OUT OF WHICH THE ASSESSEES SHARE AT 1/3 RD . THE ASSESSING OFFICER NOTED THAT WHILE WORKING O UT THE CAPITAL GAIN, THE FAIR MARKET VALUE OF LAND WAS SHOWN AT RS. 1,06,000 /- PER BIGHA, WHICH WAS SAID TO BE BASED ON A CERTIFICATE GIVEN BY SHRI S.M. JAIN, REG ISTERED VALUER. THE ASSESSING OFFICER NOTED THAT THERE WERE INSTANCES OF SALE OF AGRICULT URAL LAND SITUATED AT VILLAGE SISARMA AROUND THE PERIOD 1.4.81 FOR RS. 9,523/- PER BIGHA. THEREFORE, THE ASSESSING OFFICER SOUGHT REPORT FROM THE DVO AND THE DVO AFTER GIVING DUE NOTICE TO THE ASSESSEE ESTIMATED FMV OF TOTAL 31 BIGHAS OF LAND AT RS. 3,3 8,000/- AS ON 1.4.1981 @ RS. 10,897/- 3 PER BIGHA. THE DVO HAS GIVEN HIS DETAILED REASON. COPY OF DVOS REPORT WAS SUPPLIED TO THE ASSESSEE AND THE WRITTEN SUBMISSIONS ARE FIL ED ON BEHALF OF THE ASSESSEE. THEREAFTER, HE CONCLUDED THAT FMV ADOPTED BY ASSESS EE AT RS. 1,06,000/- PER BIGHA HAS NO BASIS AT ALL AND THE VALUE DETERMINED BY DVO AT RS. 10,897/- PER BIGHA AS ON 1.4.1981 WAS REALISTIC AND BASED ON SALE INSTANCES, LOCAL PA TWARIS CERTIFICATE ETC. THEREFORE, THE ASSESSING OFFICER ADOPTED THE FAIR MARKET VALUE OF LAND SOLD AT RS. 3,38,000/- PER BIGHA AND THE ASSESSEES 1/3 RD SHARE ARRIVED AT RS. 1,12,666/-. IN THIS WAY TAXA BLE LONG TERM CAPITAL GAIN WAS ADOPTED AT RS. 37,24,552/- AS PER WORKING PROVIDED IN THE ASSESSMENT ORDER. 6. ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) UDA IPUR WHO VIDE ORDER DATED 27.3.2002 ADOPTED THE FAIR MARKET VALUE AS ON 1.4.1 981 AT RS. 50,000/- PER BIGHA. DETAILED REASONING WERE GIVEN BY THE ASSESSEE. 7. AGAINST THE ORDER OF LD. CIT (A), BOTH FILED APP EAL BEFORE THE TRIBUNAL. THE TRIBUNAL HAS DECIDED THE APPEAL VIDE ORDER DATED 11 .8.2006 WHEREIN FMV AS ON 1.4.1981 WAS ADOPTED AT R. 60,000/- AGAINST THE VALUE TAKEN BY ASSESSING OFFICER AT RS. 10,987/- AND ENHANCED BY LD. CIT (A) AT RS. 50,000/- PER BIG HA. THE DEPARTMENTAL APPEAL HAS BEEN DISMISSED. AFTER THE RECEIPT OF ORDER OF TRIBUNAL, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 271(1)(C) THAT WHY PENALTY UNDER SEC TION 271(1)(C) SHOULD NOT BE LEVIED ON THE FINALLY COMPUTED CAPITAL GAIN. DETAILED SUBMIS SIONS WERE FILED. IT WAS SUBMITTED THAT VARIOUS AUTHORITIES HAVE TAKEN DIFFERENT VALUE AND, THEREFORE, THERE IS A DIFFERENCE OF OPINION AND ACCORDINGLY PENALTY UNDER SECTION 271(1 )(C) IS NOT LEVIABLE. HOWEVER, ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLAN ATION AS IN HIS VIEW THE ASSESSEE HAS SHOWN WRONG VALUATION AS ON 1.4.1981 WHICH IS MUCH HIGHER THAN ADOPTED BY DVO OR BY LD. CIT (A) OR BY TRIBUNAL. THEREFORE, HE LEVIED A PENALTY OF RS. 3,45,000/-. THE 4 ASSESSING OFFICER BY LEVYING PENALTY OF RS. 3,45,00 0/- HAS ALSO CONSIDERED THE AMOUNT OF INTEREST ON FDR AT RS. 69,790/- FOR THE PURPOSE OF LEVY OF PENALTY. 8. ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A). D ETAILED WRITTEN SUBMISSIONS WERE FILED. RELIANCE WAS PLACED ON VARIOUS CASE LAWS MEN TIONED IN THE ORDER OF LD. CIT (A). 9. AFTER CONSIDERING THE SUBMISSIONS AND VARIOUS CA SE LAWS, THE LD. CIT (A) FOUND THAT ASSESSING OFFICER WAS NOT JUSTIFIED IN LEVYING PENALTY ON ACCOUNT OF LONG TERM CAPITAL GAIN ON ACCOUNT OF INTEREST ON FDR. THE LD. CIT (A ) HAS TAKEN INTO CONSIDERATION THE ASPECT THAT VARIOUS AUTHORITIES INCLUDING THE REGIS TERED VALUER, THE DVO, THE ASSESSING OFFICER AND THE LD. CIT (A) AND THE TRIBUNAL HAVE T AKEN A DIFFERENT FMV AS ON 1.4.1981. THEREFORE, IT CANNOT BE SAID THAT ASSESSEE HAS CONC EALED ANY PARTICULARS OF INCOME. RELIANCE HAS BEEN PLACED ON THE DECISION OF JODHPUR BENCH OF THE TRIBUNAL IN THE CASE OF ANITA BUILDERS, 74 TTJ 364 AND ALSO ON THE DECISIO N OF HONBLE SUPREME COURT IN CASE OF DILIP N. SHROFF, 210 CTR 228. 10. NOW THE DEPARTMENT IS IN APPEAL HERE BEFORE THE TRIBUNAL. 11. THE LD. D/R HAS STRONGLY PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. 12. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSES SEE HAS PLACED RELIANCE ON THE ORDER OF LD. CIT (A). 13. AFTER CONSIDERING THE ORDERS OF THE ASSESSING O FFICER AND LD. CIT (A), WE FIND THAT LD. CIT (A) WAS JUSTIFIED IN CANCELLING THE LEVY OF PENALTY ON ACCOUNT OF LONG TERM CAPITAL GAIN FINALLY ASSESSED. IT IS SEEN THAT ASSESSEE HA S ADOPTED FAIR MARKET VALUE AT RS. 1,06,000/- PER BIGHA ON THE BASIS OF REGISTERED VAL UERS REPORT. ASSESSING OFFICER BASED ON DVOS REPORT ADOPTED FMV AT RS. 10,000/- OR ODD PER BIGHA. THE LD. CIT (A) ENHANCED THE SAME TO RS. 50,000/- PER BIGHA AND TRIBUNAL HAS ENHANCED THIS VALUE AT RS. 60,000/- PER BIGHA AND ORDER OF THE TRIBUNAL HAS BEEN AFFIRM ED BY THE HONBLE HIGH COURT. FROM 5 THE ABOVE FACTS, IT IS CLEARLY SEEN THAT AT DIFFERE NT LEVEL DIFFERENT AUTHORITIES HAVE ADOPTED DIFFERENT FMV. THEREFORE, IT CANNOT BE SAID THAT A SSESSEE HAS FURNISHED INACCURATE PARTICULARS FOR THE PURPOSE OF CONCEALING INCOME. THE ASSESSEE IS A LAY MAN AND ON THE BASIS OF CERTIFICATE OF REGISTERED VALUER, HE ADOPT ED FMV AT RS. 1,06,000/- PER BIGHA FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN. T HEREFORE, IN OUR CONSIDERED VIEW, THE PENALTY UNDER SECTION 271(1)(C) WAS NOT LEVIABLE AN D THE LD. CIT (A) WAS JUSTIFIED IN CANCELING THE LEVY OF PENALTY. ACCORDINGLY, WE CON FIRM THE ORDER OF LD. CIT (A) 14. IDENTICAL FACTS ARE INVOLVED IN OTHER TWO CASES ALSO AS THEY ARE CO-OWNERS OF THE LAND AND, THEREFORE, ON THE REASONING GIVEN ABOVE I N CASE OF SHRI CHOK CHAND NAGDA HUF, WE CONFIRM THE CANCELLATION OF PENALTY IN CASE OF OTHER TWO ASSESSEE ALSO. 15. IN THE RESULT, APPEALS OF THE DEPARTMENT ARE DI SMISSED. 16. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 15 .12.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JODHPUR, COPY FORWARDED TO :- THE ITO, WARD 2(2), UDAIPUR. SHRICHOK CHAND NAGDA HUF, UDAIPUR. SHRI DHANNALAL NAGDA HUF, UDAIPUR. SHRI KESULAL NAGDA HUF, UDAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 203(3)/JODH/2010) BY ORDER, AR ITAT JODHPUR.