Sh. Ravish Kumar, Delhi V. ITO, New Delhi

ITA 2172/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86790 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 02-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 12-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Assessee Lawyers: ANUP SHARMA

Judgement Text

DELHI BENCH F : NEW DELHI BEFORE SHRI G. D. AGARWAL, HONBLE VICE PRESIDENT AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 2172 /DEL/ 2013 ASSESSMENT YEAR 2009 - 10 APPELLANT BY : SH. ANUP SHARMA, ADV. RESPONDENT BY : SH. VIKRAM SAHAY, SR. DR O R D E R PER A. T. VARKEY , JUDICIAL MEMBER THIS IS AN APPEAL ARSING FROM AN ORDER OF LD CIT(A), XXV, NEW DELHI DATED 12.02.2013 FOR ASSESSMENT YEAR 2009 - 10. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS THE PROPRIETOR OF M/S RAVI DRUG STORE AND IS ENGAGED I N THE BUSINESS OF CHEMIST. THE ASSESSEE HAD FILED THE RETURNED INCOME OF RS.2,52,440/ - . THE CASE WAS TAKEN UP FOR SCRUTINY AND IT WAS FOUND BY THE AO THAT THE ASSESSEE DID NOT DECLARE THE LONG TERM CAPITAL GAIN OF RS.6,77,840/ - AND THE BANK INTEREST OF RS. 5,191/ - AND ACCORDINGLY, THE AO HAD MADE THE ADDITIONS. THE AO HAD ALSO INITIATED THE PENALTY PROCEEDINGS AND HAD ALSO LEVIED THE MINIMUM PENALTY @ 100% OF RS.1,75,090/ - U/S 2741(1)(C) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER THE ACT) VIDE THE ORDER OF THE AO, W HICH HAS BEEN CONFIRMED BY THE LD CIT(A) ON THE GROUNDS THAT THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN AS TO WHY THE LONG TERM CAPITAL GAIN AND THE BANK INTEREST WAS NOT DECLARED IN THE RETURN OF INCOME. RAVISH KUMAR, PROP.M/S. RAVI DRUG STORE, 3351, BAZAR SITARAM, DELHI PAN:AANPL3573D VS. ITO, WARD - 28(4) DRUM SHAPE BUILDING, NEW DELHI (APPELLANT) (RESPONDENT) PAGE 2 OF 4 3. BEFORE US THE LD AR SUBMITTED THAT THE LD COMMISSION ER OF INCOME TAX (APPEALS), XXV, NEW DELHI (CIT(A) IN HIS ORDER DATED 12.02.2013 HAS ERRED IN CONFIRMING THE PENALTY OF RS.1,75,090/ - IMPOSED BY THE ASSESSING OFFICER VIDE ORDER DATED JUNE 29,2012 UNDER SECTION 271(1)(C) OF THE ACT, BY NOT APPRECIATING THE BONAFIDE AND REASONABLE EXPLANATION SUBMITTED BY THE APPELLANT AND NOT COMMENTING ON THE SUBMISSION MADE BY THE APPELLANT VIDE WRITTEN SUBMISSIONS FILED VIDE LETTER DATED 11.02.2013. 4. LD DR RELIED ON THE ORDER OF THE LD CIT(A) . 5. WE HAVE CONSIDERED T HE RIVAL SUBMISSIONS AND PERUSED THE RECORDS AND WE FIND THAT AS PER AIR INFORMATION RECEIVED BY THE DEPARTMENT, THE ASSESSEE HAD SOLD THE PROPERTY FOR RS.50,00,000/ - . THE ASSESSEE WAS THEN ASKED TO EXPLAIN THE PROPERTY SALE FOR RS.5 0,00,000/ - , WHICH WAS NOT SHOWN IN THE RETURN. THEREAFTER , WE FIND THAT VIDE LETTER DATED 28.11.2011 AND 07.12.2011 , THE ASSESSEE ADMITTED THAT THERE WAS LONG TERM CAPITAL GAIN ON SALE OF THE PROPERTY, WHICH WAS COMPUTED AT RS.6,77,840/ - . THE COMPUTATION O F CAPITAL GAIN IS AS UNDER: - SALE PRICE OF PROPERTY NO.3248 - 3253, KUCHA HAFIJ BANNA, HATHI KHANNA, KHADUR GARH ROAD, DELHI SHARE RS.25,00,000/ - SALE PRICE OF PROPERTY NO.3248 - 3253, KUCHA HAFIJ BANNA, HATHI KHANNA, BAHADUR GARH ROAD, DELHI SHARE RS.12,50,000/ - SALE PRICE OF PART OF ABOVE PROPERTY RETAINED BY THE OTHER OWNER SHARE RS.3,50,000/ - TOTAL RS.41,00,000/ - 6. FROM THE AFORESAID COMPUTATION, IT IS EVIDENT THAT THE AO, HAD INFORMATION IN RESPECT OF SALE CONSIDERATION OF RS.50 LAKH OUT OF WHICH RS.25 LAKHS WAS THE SHARE OF THE ASSESSEE. PAGE 3 OF 4 7. HOWEVER, THERE WERE TWO MORE SALE OF THE PROPERTY SHARE OF WHICH AGGREGATE D TO RS.16 LAKHS. AFTER CONSIDERING THE SALE, GAIN HAS BEEN COMPUTED AT RS.6,77,840/ - . IN OTHER WORDS THE GAIN FINALLY ASSESSED CAN REASONABLY BE SAID TO HAVE BEEN COMPUTED ON THE BASIS OF THE SALE CONSIDERATION OF THE TWO PROPERTIES WHICH HAVE BEEN VOLUNT ARILY DECLARED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE AO HAS NOT COMMENTED ON THE AFORESAID VOLUNTARY SURRENDER IN THE ORDER IMPOSING PENALTY. THE PENALTY HAS BEEN LEVIED ON THE GROUND THAT THE SAID GAIN WAS NOT DECLARED IN THE RE TURN. HOWEVER, HAVING REGARD TO THE FACT THAT THE ASSESSEE IS AN INDIVIDUAL, WHO IS RUNNING A BUSINESS OF A CHEMIST AND HAS FILED THE CORRECT COMPUTATION DURING THE PROCEEDINGS WHEN CALLED UPON TO EXPLAIN THE CREDIT OF R S.50 LAKHS ON SALE OF PROPERTY, THE EXPLANATION BY THE ASSESSEE, THAT T HE BALANCE ADDITION ON BANK INTEREST OF RS.5,191/ - WAS LEFT OUT BY THE ASSESSEE ON THE GROUND OVER - SIGHT AS STATED IN THE ORDER OF ASSESSMENT IS PROBABLE . IN VIEW THEREOF WE ARE INCLINED TO DELETE THE PENALTY. 8. IN THE RESULT THE APPEAL ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 7 . 0 2 . 201 5 . - S D / - - S D / - ( G. D. AGARWAL ) (A. T. VARKEY) VIDE PRESIDENT JUDICIAL MEMBER DATED : 1 7 / 02 / 201 5 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT PAGE 4 OF 4 ASSISTANT REGISTRAR ITAT, NEW DELHI