Padmaben Navinbhai Patel, Surat V. ITO, Ward-1, Bardoli

ITA 210/SRT/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1804 (ITAT-SURAT)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-07-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 09-11-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAURYA SHASWAT SUKLA
• Keywords: Cost of acquisition; Fair market value
• Section: 271(1)(c); 274

Judgement Text

आयकर अपीलȣय अͬधकरण,स ु रत Ûयायपीठ,स ु रत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND Dr ARJUN LAL SAINI, ACCOUNTANT MEMBER आ.अ.सं./ITA No.210/SRT/2021(AY 2012-13) (Hearing in Virtual Court) Padmaben Navinbhai Patel, At Post: Mota, Taluka: Bardoli, Dist. Surat-394345 PAN : BMHPP 9078 F Vs Income-Tax Officer, Ward-1, Bardoli, 2 nd Floor, BSNL, Building, Opp. Jalaram Temple, Station Road, Bardoli-394601 अपीलाथȸ/Appellant Ĥ×यथȸ /Respondent Ǔनधा[ǐरतीकȧओरसे /Assessee by None (Written Submission) राजèवकȧओरसे /Revenue by Shri Shaurya Shaswat Sukla Sr-DR सुनवाई की तारीख/Date of hearing 25.07.2022 उɮघोषणा कȧ तारȣख/Date of pronouncement 28.07.2022 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre (NFAC)/learned CIT(A)dated 28.09.2021, which in turn, arises against penalty levied by the Assessing Officer under section 271(1)(c) of Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 27.02.2017 for assessment year (AY) 2012-13. The assessee has raised the following grounds of appeal:- ITA No.210/SRT/2021 (A.Y 12-13) Padmaben N Patel 2 “1.On the facts and in the circumstances of the case, the National faceless Appeal Centre, Delhi has grossly erred in confirming the penalty to the extent of Rs.98,460/- u/s 271(1)(c) of the Act. 2.That the impugned order passed by the National Faceless Appeal Centre, Delhi is in violation of principles of natural justice as the detailed submissions filed have not been considered at all by the NFAC, Delhi, and therefore, the impugned order is required to be quashed.” 2. Brief facts of the case are assessee filed her return of income claiming to be an agriculturist, for the assessment year 2012- 13 on 17.12.2013 declaring “nil” income. Case of assessee was selected for scrutiny and assessment completed under section 143(3) of the Act on 10.02.2015 by making addition of long term capital gain (LTCG) of Rs.17,91,090/-. The facts leading to the addition of LTCG are that during the period under consideration the assessee with her co-owners sold a piece of land situated in Survey no. 78/1+79 Block No. 83, of Village Karadava, Surat. The assessee had 1/5 share in the land and has shown her consideration at Rs. 17,95,600/-. The assessee shown the value of her share at Rs. 3,59,120/- by adopting fair market value as on 1 st April 1981 @ Rs. 250/- per square meter on the basis of report of registered valuer and computed loss on sale of such asset. The assessing officer obtained ITA No.210/SRT/2021 (A.Y 12-13) Padmaben N Patel 3 information from the office of sub-registrar Surat and on the basis of such information adopted value of assessee as on 01.04.1981 @ Rs.0.40/- per square meter, thereby making addition of Rs.17,95,600/-.The Assessing Officer at the time of passing assessment order initiated penalty levied u/s 271(1)(c). Aggrieved by the order in the quantum assessment, assessee filed an appeal before Ld. CIT(A), wherein the assessee was granted partial relief vide order dated 04.12.2015. The ld CIT(A) directed to adopt the value of asset as on 01.04.1981 @ Rs. 14.18/- per square meter, thereby addition of LTCG was reduced to Rs.16,35,701/-. After receipt of order of Ld. CIT(A) the Assessing Officer issued show cause notice under section 274 rws 271(1)(c) for levy of penalty. The Assessing Officer recorded that hearing was fixed on 02.12.2016. None appeared on behalf of assessee nor any compliance was made on the part of assessee. The Assessing Officer levied the penalty @ 100% tax sought to be evaded. The assessing officer worked out penalty of Rs.2,97,814/-, vide order dated 27.02.2017. ITA No.210/SRT/2021 (A.Y 12-13) Padmaben N Patel 4 3. Aggrieved, the assessee filed appeal before the Ld. CIT(A). The appeal of assessee was transferred to NFAC Delhi and was adjudicated vide order dated 28.09.2021, wherein the Ld. NFAC/Ld. CIT(A) granted partial relief to the assessee by taking view that Assessing Officer during the scrutiny assessment taken a value of land / assets on 01.04.1981 @ Rs. 0.40 per square meter However, the Hon'ble Tribunal in quantum assessment restricted the fair market value as on 01.04.1981 @ Rs.100/- per square meter in ITA No.275/AHD/2016 dated 13.01.2021. Further, aggrieved assessee has filed present appeal before the Tribunal. 4. None appeared on behalf of assessee. On perusal of record, we find that assessee has already filed written submission and prayed therein that appeal may be decided on the basis of her written submission. In the written submission, the assessee submitted that NFAC/CIT(A) in impugned order partly allowed appeal of assessee in directing the Assessing Officer to re- compute the penalty by adopting cost of asset as on 01.04.1981 @ Rs.100/- as held by Tribunal against the rate of @ Rs. 250/- per square meter shown by the assessee. ITA No.210/SRT/2021 (A.Y 12-13) Padmaben N Patel 5 Accordingly as per the order of NFAC/ ld CIT(A) the penalty under section 271(1)(c) was restricted to the extent of Rs.98,406/-. The assessee besides other submission, submitted that in assessee’s co-owners Vinaben Pravinbhai Patel, (PAN: ASBPP 6448 G) deleted by NFAC/ ld.CIT(A) in order No. ITBA/NFAC/S/250/2021-22/1034330303(1) dated 20.07.2021. 5. The assessee further stated that short controversy in the quantum assessment was about the fair market value as on 01.04.1981, the assessee adopted fair market value @ Rs. 250/- square meters on the basis of registered valuer report; however, the Assessing Officer adopted fair market value of cost of acquisition as on 01.04.1981 @ 0.40 per square meter. However, on appeal before ld CIT(A) the Assessing Officer was directed to re-compute the LTCG after adopting fair market value as on 01.04.1981 @ Rs.14.18/- per square meter. And on further appeal, before Tribunal it was directed to adopt @ Rs. 100/- per square meter. The assessee further contended that from the fact, it is evident that entire issue is debatable ITA No.210/SRT/2021 (A.Y 12-13) Padmaben N Patel 6 and is based on estimation and therefore no penalty is leviable on such present fact of the case. 6. On the other hand, Ld. Senior Departmental Representative (Sr. DR) for the Revenue supported the order of Ld. CIT(A). 7. We have considered the rival submission of the ld Sr DR for the revenue and written submissions of the assessee. We have also perused the orders of lower authorities carefully. We find that during the relevant period under consideration, the assessee along with other co-owners sold a piece of land situatedat Survey No.78/179, Block No.83, Village Karadava, Dist. Surat on 07.03.2012 and assessee’s share is 1/5 th share of the said land in question. The sale consideration of assessee’s share was at Rs.17,95,600/-.The assessee adopted the fair market value of land / asset as on 01.04.1981 @ Rs.250/- per square meter. The Assessing Officer obtained the information from Sub Registrar, Surat in respect of land in Survey No.307 Block No.446 of Village Karadava and adopted value @ 40 paisa per square meter as on 01.04.1981 and computed the LTCG of Rs. 17,95,600/-. We find that in quantum appeal Ld. CIT(A) directed to adopt the fair market ITA No.210/SRT/2021 (A.Y 12-13) Padmaben N Patel 7 value cost of acquisition as on 01.04.1981 @ 14.18/- per square meter and the addition of LTCG was reduced to Rs. 16,35,701/-. And on further appeal before Hon'ble Tribunal in ITA No.275/AHD/2016 (supra), the assessing officer was directed to adopt the fair market value @ 100/- per square meter as on 01.04.1981. Consequent upon adopting the fair market value @100/- per square meter as on 01.04.1981, the LTCG was substantially reduced and the penalty under section 271(1) was re-computed at Rs.98,460/-. 8. We have independently examined the fact of the present case as recorded in preceding paras. After considering the facts of the present case are of the view that the addition in the assessment was based on mere estimation basis as estimated by different authorities at different times & rates. It is settled position in law that addition based on estimation no penalty is leviable. As the estimation of valuation are not final and may differ on the subjective satisfaction of different authorities. Therefore, we are of the constrained view that in such estimation of valuation no penalty is leviable under section 271(1)(c) of the Act. Even otherwise the addition of LTCG in ITA No.210/SRT/2021 (A.Y 12-13) Padmaben N Patel 8 the assessment order is based on the difference of opinion, which cannot be made basis of the levy of penalty under section 271(1)(c).We further find that in assessee’s co-owners similar penalty was levied by assessing officer, however, on appeal before Ld. CIT(A) the same was deleted vide order dated 20.07.2021. Thus, we are of view that revenue cannot treat the assessee differently that of her co-owner. Therefore, we direct the Assessing Officer to delete the remaining / entire penalty levied under section 271(1)(c) of the Act. 9. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 28/07/2022 and the result was also placed on the Notice Board. Sd/- Sd/- (Dr ARJUN LAL SAINI) (PAWAN SINGH) [लेखा सद᭭य/ACCOUNTANT MEMBER] [᭠याियक सद᭭य JUDICIAL MEMBER] Surat, Dated: 28/07/2022 Dkp. Outsourcing Sr. P.S Copy to: 1. Appellant- 2. Respondent- 3. CIT(A) 4. CIT 5. DR 6. Guard File True copy/ By order // True Copy // Sr. P.S./Assistant Registrar, ITAT, Surat