Bhailal N. Patel, Vadodara V. The Dy. Commissioner of Income Tax, Circle-4, Vadodara

ITA 2034/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5865 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 04-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Capital asset
• Section: 143(3); 54

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.2034/AHD/2016 / ASSTT. YEAR: 2009-2010 BHAILALBHAI N. PATEL 10, SANDALWOOD SOCIETY B/H. KALPANA SOCIETY RACE COURSE CIRCLE VADODARA 390 007. PAN : ACUPP 2966 J VS. ACIT (OSD) CIR.10, AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI M.K. PATEL, AR REVENUE BY : SHRI PRASOON KABRA, SR.DR ! / DATE OF HEARING : 12/03/2018 '#$ ! / DATE OF PRONOUNCEMENT: 13/03/2018 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-2, VADODRA DATED 25.5.2016 PASSED FOR ASS TT.YEAR 2009- 10. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING PENALTY OF RS.6,79,800/- IMPOSE D BY THE AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 . ITA NO.2034/AHD/2016 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 30.3.2010 DECLARING TOTAL INCOME AT RS.65,02,760/-. AN ASSESSMENT ORDER WAS PASSED ON 29.11.2011 UNDER SECTION 143(3) OF THE ACT WHEREBY INCOME OF THE ASS ESSEE WAS DETERMINED AT RS.94,64,960/-. IT IS PERTINENT TO O BSERVE THAT THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 54 OF THE ACT WHICH WAS DISALLOWED TO HIM BY THE LD.AO ON THE GROUND THAT T HE AMOUNTS WHICH WERE RECEIVED BY THE ASSESSEE ON SALE OF OLD HOUSE WAS NOT USED BY HIM FOR CONSTRUCTING NEW HOUSE. THE ASSESSEE CHALLENG ED THIS DISALLOWANCE BEFORE THE LD.CIT(A), AND ULTIMATELY MATTER TRAVELL ED TO THE TRIBUNAL IN ITA NO.37/AHD/014. TRIBUNAL HAS DELETED THE DISALL OWANCE AND GRANTED DEDUCTION ADMISSIBLE UNDER SECTION 54 OF THE INCOME TAX ACT VIDE ITS ORDER DATED 3.1.2017. CONCLUDING PARAGRAPH OF THE TRIBUNALS ORDER READS AS UNDER: 15. WE ARE, THEREFORE, OF THE VIEW THAT IN THE CAS E OF ASSESSEE LONG TERM CAPITAL GAIN AROSE FROM SALE OF OLD RESIDENTIAL HOUSE ON 18.07.2008 AND ASSESSEE INVEST ED RS.53,92,287 IN CONSTRUCTING ANOTHER RESIDENTIAL HO USE CONSTRUCTION OF WHICH WAS COMMENCED IN 2006 BUT WAS COMPLETED ON 16.4.2009 AND WAS WELL WITHIN THE STAT UTORY TIME LIMIT MEANT FOR CONSTRUCTING OF NEW RESIDENTIA L HOUSE WITHIN 3 YEARS FROM THE DATE OF TRANSFER OF CAPITAL ASSET AS ENVISAGED IN THE PROVISIONS OF SECTION 54 OF THE AC T AND, THEREFORE, ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S 54 OF THE ACT AT RS.29,62,200/-. ACCORDINGLY, WE SET ASIDE TH E ORDERS OF LOWER AUTHORITIES AND ALLOW THE APPEAL OF ASSESSEE. 4. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE RECORD. WE FIND THAT SUB-CLAUSE (III) OF SECTION 271(1)(C) PRO VIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEMPLATES THAT TH E ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE HIM, WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF CONC EALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDED UPON THE ADDITION MADE TO THE INCOME OF THE ASSESSEE. SINCE BASIS FOR VISITING T HE ASSESSEE WITH ITA NO.2034/AHD/2016 3 PENALTY HAS BEEN EXTINGUISHED BY DELETING ADDITION BY THE TRIBUNAL VIDE ITS ORDER DATED 3.1.2017 (SUPRA) IN THE QUANTUM APP EAL OF THE ASSESSEE, THEREFORE IMPUGNED PENALTY IS NOT SUSTAINABLE, ACCO RDINGLY WE CANCEL THE PENALTY AND ALLOW APPEAL OF THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 13 TH MARCH, 2018. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER