Shri Pankaj Kacharabhai Patel, Ahmedabad V. The Income Tax Officer, Ward-3(3)(4), Ahmedabad

ITA 215/AHD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2898 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 27-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY
• Assessee Lawyers: BIREN SHAH
• Keywords: Earning of tax free income; Proportionate interest; Cost of acquisition
• Section: 271(1)(c); 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 215/AHD/2017 (ASSESSMENT YEAR: 2012-13) SHRI PANKAJ KACHARABHAI PATEL 104, YOGI FLATS, NR. PANDIT NAGAR, VIBHAG-3, SATELLITE ROAD, AHMEDABAD380015 V/S INCOME TAX OFFICER, WARD- 3 (3)(4), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AEHPP5818A APPELLANT BY : SHRI BIREN SHAH, AR RESPONDENT BY : SHRI ALBINUS TIRKEY, SR. D.R . ( )/ ORDER DATE OF HEARING : 17 -01-201 9 DATE OF PRONOUNCEMENT : 12 -04-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A)-3, AHMEDABAD DATED 09.05.2016 PERTAINING TO A.Y. 2012-13 AND FOLLOWING GROUND HAS BEEN TAKEN: ITA NO. 215/ AHD/2017 . A.Y. 2012-13 2 1 IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN CONFIRMING PENALTY U/S. 271(1)(C) OF RS. 1,49,700/- LEVIED BY LD. A.O, EVEN IF ALL MATERIAL RECORDS HAVE BEEN DISCLOSED OF SHORT TERM CAPITAL GAIN ON SALE OF AGRICULTURE PLOT. 2. IN THIS CASE, ASSESSEE FILED HIS RETURN OF INCOME O N 06.10.2015 DECLARING TOTAL INCOME OF RS. 6,70,220/-. THE ORDER U/S. 143(3) OF THE ACT WAS PASSED ON 11.03.2015 TOTAL INCOME WAS DETERMINED AT RS. 13,26 ,416/- BY MAKING THE FOLLOWING ADDITIONS: (I) ADDITION MADE ON ACCOUNT OF SHORT TERM CAPITAL GAIN ON THE SALE OF IMMOVABLE PROPERTY OF RS. 5,27,670/-. (II) DISALLOWANCE U/S. 14A OF RS. 1,28,526/-. 3. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAS SOLD AN IMMOVABLE PROPERTY ON 28.07.20 11 FOR A TOTAL CONSIDERATION OF RS. 37,76,000/- SITUATED AT VILLAG E BIBIPUR, AHMEDABAD FROM WHICH THE ASSESSEE HAS RECEIVED RS. 6,41,920/- AS H IS SHARE IN SALE OF THE SAID PROPERTY. IT WAS FOUND FROM THE COPY OF PURCHASE DE ED OF THE SAID IMMOVABLE PROPERTY WHICH WAS SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT THE PROPERTY WAS PURCHASED ON 07/04/2009 AND THE SA ME WAS OLD ON 28/07/2011 RESULTING INTO SHORT TERM CAPITAL GAIN W HICH WAS NOT SHOWN BY THE ASSESSEE IN HIS RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, POINTING OUT ON THIS QUERY. THE ASSESSEE FURNISHED THE COMPUTATION OF SHORT TERM CAPITAL GAI N ON 12/03/2015 WHICH IS REPRODUCED AS UNDER: PARTICULAR AMOUNT AMOUNT (RS.) (RS.) ITA NO. 215/ AHD/2017 . A.Y. 2012-13 3 SALES CONSIDERATION 6,41,920 LESS: PURCHASED COST PURCHASE COST 3,00,000 STAMP FEES EXPENSES 89,900 REGISTRATION FEES 3,160 VAKIL FEES & OTHER 35,000 FENCING CHARGES 2,45,000 TOTAL COST 6,72,060 ASSESSEE'S SHARE (17%) 1,14,250 1,14,250 SHORT TERM CAPITAL GAIN 5,27,670 4. SINCE THE ASSESSEE HAD NOT OFFERED ANY EXPLANATION WITH RESPECT TO ADDITION UNDER HEAD OF SHORT TERM CAPITAL GAIN OF RS. 5,27,6 70/-, ASSESSING OFFICER MADE THE ADDITION. 5. THE ASSESSEE ALSO EARNED INCOME FROM PROFIT SHARE A S ALSO FROM REMUNERATION FROM SHARE FIRM AS WORKING PARTNER, EXPENSES INCURR ED BY ASSESSEE IN RATIO WHICH PROFIT SHARE IN FORM BORE TO TOTAL RECEIPTS F ROM FIRM THAT ON ACCOUNT OF PROFIT SHARE AS ALSO REMUNERATION, WERE TO BE DISAL LOWED U/S. 14A. 6. THE AMOUNT OF DISALLOWANCE OF PROPORTIONATE INTERES T AND OTHER EXPENSES IS WORKED OUT AS UNDER: PARTICULARS RS. %OF INTEREST AMOUNT OF INT. APPORTIONED (RS.) SHARE -OF PROFIT 3,19,9587- 14.63 % 1,28,526- ITA NO. 215/ AHD/2017 . A.Y. 2012-13 4 REMUNERATION 7,06,300/- 85.37 % 7,49,9847- INTEREST ON CAPITA] 11,60,030/- TOTAL: 21,86,288/- 100 % 8,78,5107- 'AS DISCUSSED ABOVE, PROPORTIONATE INTEREST TO THE EXTENT OF EXEMPT INCOME CLAIMED BY THE ASSESSEE WHICH COMES TO RS. 1,28,526 /- IS HEREBY DISALLOWED U/S.14A OF THE INCOME TAX ACT AND ADDED TO THE TOTA L INCOME OF THE ASSESSEE. 7. AND ACCORDINGLY PENALTY PROCEEDINGS WERE INITIATED AND PENALTY OF RS. 1,49,700/- WAS LEVIED BY THE ASSESSING OFFICER. 8. THEREAFTER, IN APPEAL LD. CIT(A) CONFIRMED THE ACTI ON OF THE LD. A.O. 9. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGN ED ORDER. DURING THE YEAR UNDER CONSIDERATION, THE THEN ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAS SOLD AN IMMOVABLE PROPERTY ON 28/07/2011 FOR TO TAL CONSIDERATION FOR RS. 37,76,000/- SITUATED AT BLOCK NO. 41-K, VILLAGE-BIB IPUR, TALUKA-DASKROI, AHMEDABAD FROM WHICH THE ASSESSEE HAS RECEIVED RS.6 ,41,920/- AS HIS SHARE IN SALE OF THE SAID PROPERTY. IT WAS FOUND FROM THE CO PY OF PURCHASE DEED OF THE SAID IMMOVABLE PROPERTY WHICH WAS SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT THE PROPERTY WAS PURCHASED O N 07/04/2009 AND THE SAME WAS SOLD ON 28/07/2011 RESULTING INTO SHORT TERM CA PITAL GAIN WHICH WAS NOT SHOWN BY THE ASSESSEE IN HIS RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION. 10. FROM THE ABOVE FACTS OF THE ASSESSEE'S CASE. IT IS VERY CLEAR THAT ASSESSEE HAS FAILED TO DISCLOSE THE SHORT TERM CAPITAL GAIN ON S ALE OF THE ABOVE REFERRED ITA NO. 215/ AHD/2017 . A.Y. 2012-13 5 IMMOVABLE PROPERTY IN ORDER NOT TO PAY TAX. HENCE, THE ASSESSING OFFICER PRECISELY COMPUTED THE ASSESSEE'S INCOME FROM THE I NCOME UNDER THE HEAD OF SHORT TERM CAPITAL GAIN WAS AT RS.5,27,670/- AND AD DED TO THE TOTAL INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 11. IN PROCEEDING U/S. 143(3) AS WELL AS PENALTY PROCEE DING U/S 271(1)(C) APPELLANT COULD NOT GIVE ANY SATISFACTORILY REPLY BEFORE THE LOWER AUTHORITIES AND HE MERELY SUBMITTED THE DETAILS OF THE CAPITAL GAIN. 12. AND IN SUPPORT OF ITS CONTENTION, LD. A.R. CITED SE VERAL JUDGMENT BUT SAME ARE NOT OF ANY HELP TO THE APPELLANT BECAUSE HE HAS DEL IBERATELY AND WILLFULLY CONCEALED THE INCOME. 13. IT IS THE STATUTORY DUTY OF THE ASSESSEE TO RECORD ALL ITS TRANSACTION IN THE BOOKS OF ACCOUNT, TO EXPLAIN THE SOURCE OF PAYMENTS MADE BY IT AND TO DECLARE IT TRUE INCOME IN THE RETURN OF INCOME FILED BY IT FROM YEA R TO YEAR. THE QUESTION IS WHETHER ASSESSEE HAS OFFERED ANY EXPLANATION FOR CO NCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME EXPLANATION TO SECTION 271(1) RAISES A PRESUMPTION OF CONCEALMENT, WHEN A DIFFERENCE IS NOTICED BY THE A.O. BETWEEN REPORTED AND ASSESSED INCOME. THE BURDEN IS THEN ON THE ASSESSEE TO SHOW OTHERWISE, BY COGENT AND RELIABLE EVIDENCE. WHEN THE INITIAL ONUS RAISED BY THE EXPLANATION, HAS BEEN DISCHARGED BY HIM, THE ONUS SHIFTS ON THE REVENUE TO SHOW THAT THE AMOUNT IN QUESTION CON STITUTED THE INCOME AND NOT OTHERWISE. IN THIS CASE, IF A.O. HAS NOT RECEIV ED INFORMATION ABOUT THE SHORT TERM CAPITAL GAIN RECEIVED BY THE ASSESSEE TH EN ASSESSEE WOULD HAVE GONE SCOT FREE AND HE WILLFULLY DID NOT DECLARE THE SHORT TERM CAPITAL GAIN IN HIS RETURN OF INCOME. THEREFORE, IN OUR CONSIDERED OPINION, PENALTY HAS BEEN ITA NO. 215/ AHD/2017 . A.Y. 2012-13 6 LEGALLY AND RIGHTLY IMPOSED ON THE APPELLANT AND SA ME DOES NOT REQUIRE ANY KIND OF INTERFERENCE AT OUR END. 14. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON 12 - 04- 2019 SD/- SD/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 12/04/2019 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD