Shri Mafatlal Nathalal Patel, Surat V. The Dy.CIT, Circle-2, Surat

ITA 2177/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0891 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 16-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 23-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 2177/AHD/2013 (ASSESSMENT YEAR: 2008-09) MAFATLAL NATHALAL PATEL PLOT NO. 96, SURAT INDUSTRIAL SOCIETY, NEAR KIRAN MOTOR WORK SHOP, BAMROLI ROAD, SURAT V/S DY. COMMISSIONER OF INCOME TAX, CIRCLE-2, SURAT (APPELLANT) (RESPONDENT) PAN: ABZPP0470H APPELLANT BY : NONE (WRITTEN SUBMISSIONS) RESPONDENT BY : SHRI R.K. GUPTA, SR. D.R. ( )/ ORDER DATE OF HEARING : 16 -08-201 6 DATE OF PRONOUNCEMENT : 17 -08-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. WITH THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE C ORRECTNESS OF THE ORDER OF THE LD. CIT(A)-II, SURAT DATED 19.07.2013 PERTAINING TO A.Y. 2008-09. ITA NO. 2177 /AHD/2013 . A.Y. 2008-0 9 2 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS. 39,715/- LEVIED BY TH E A.O. U/S. 271(1)(C) OF THE ACT. THE ASSESSEE HAS PREFERRED TO PRESENT ITS CASE THROUGH WRITTEN SUBMISSIONS. WE HEARD THE LD. D.R. AT LENGTH AND HAVE CAREFULLY PERUSED THE WRITTEN SUBMISSIONS OF THE AS SESSEE. 3. IN THIS CASE, THE RETURN OF INCOME WAS FILED 09.01. 2009 DECLARING TOTAL INCOME AT RS. 5,00,674/-. THE ASSESSMENT WAS COMPLE TED U/S. 143(3) VIDE ORDER DATED 29.12.2010. THE ASSESSED INCOME WA S DETERMINED AT RS. 1,83,81,924/- BY MAKING THE FOLLOWING ADDITIONS :- 1. PROFIT ON SALE OF SHOPS RS. 1,63,16,250/- 2. UNEXPLAINED INVESTMENT RS. 15,65,000/- 4. THE ASSESSEE CHALLENGED THE ASSESSMENT BEFORE THE F IRST APPELLATE AUTHORITY WHO VIDE ORDER DATED 23.03.2012 DELETED T HE ADDITION AT SERIAL NO. 2 ABOVE AND DIRECTED THE A.O. TO RESTRIC T THE ADDITION MADE AT SERIAL NO. 1 TO RS. 1,69,050/-. PURSUANCE TO THE ORDER OF THE FIRST APPELLATE AUTHORITY, THE A.O. INITIATED PENAL PROCE EDINGS ON THE AMOUNT SUSTAINED BY THE LD. CIT(A) AT RS. 1,69,050/ -. THE ASSESSEE WAS ASKED TO SHOW CAUSE WHY PENALTY SHOULD NOT BE L EVIED U/S. 271(1)(C) OF THE ACT. ASSESSEE STRONGLY SUBMITTED T HAT THE ADDITIONS HAVE BEEN SUSTAINED BY INVOKING THE LEGAL FICTION U /S. 50C OF THE ACT AND, THEREFORE, IT IS NEITHER A CASE OF CONCEALMENT OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE REFORE, NO PENALTY CAN BE LEVIED. THIS EXPLANATION OF THE ASSESSEE DID NOT FIND ANY FAVOUR WITH A.O. WHO PROCEEDED BY LEVYING PENALTY OF RS. 3 9,715/-. ITA NO. 2177 /AHD/2013 . A.Y. 2008-0 9 3 5. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 6. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. 7. WE FIND THAT IN ITS RETURN OF INCOME, THE ASSESSEE HAS SHOWN CAPITAL GAINS ON THE BASIS OF THE SALE CONSIDERATION IN THE AGREEMENT. INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT, THE STAMP DUTY VALUATION WAS TAKEN AS THE FULL VALUE OF CONSIDERATION. IN OU R UNDERSTANDING, SINCE THE ASSESSEE HAS OFFERED CAPITAL GAINS ON THE BASIS OF THE SALE CONSIDERATION RECEIVED, ASSESSMENT MADE BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT WOULD NOT AMOUNT TO FURNISHI NG OF INACCURATE PARTICULARS BECAUSE THE ASSESSMENT HAS BEEN COMPLET ED BY A LEGAL FICTION. 8. THE HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF M ADAN THEATRES LTD. 260 CTR 75 HAS HELD:- THAT THE ACTUAL AMOUNT RECEIVED WAS OFFERED FOR TA XATION. IT WAS ONLY ON THE BASIS OF THE DEEMED CONSIDERATION THAT THE P ROCEEDINGS U/S. 271(1)(C) STARTED. THE REVENUE HAD FAILED TO PRODUC E ANY IOTA OF EVIDENCE THAT THE ASSESSEE ACTUALLY RECEIVED ONE PA ISE MORE THAN THE AMOUNT SHOWN TO HAVE BEEN RECEIVED BY HIM. THUS, PE NALTY ORDER WAS LIABLE TO BE SET ASIDE. 9. A SIMILAR VIEW WAS TAKEN BY THE CO-ORDINATE BENCH I N THE CASE OF CHIMANLAL MANILAL PATEL. IN ITA NO. 508/AHD/2010, T HE CO-ORDINATE BENCH HELD AS UNDER:- 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. IT IS A FACT THAT THE ADDITION HAS BEEN MADE BY THE A.O. IN THE REVISIONARY PROCEEDINGS. ITA NO. 2177 /AHD/2013 . A.Y. 2008-0 9 4 THE ADDITION HAS BEEN MADE ON THE BASIS OF PROVISIO NS OF SECTION 50C. IT IS NOT THE CASE OF THE AO THAT THE ASSESSEE HAS RECEIVED CONSI DERATION OVER AND ABOVE THAN THAT DECLARED IN THE SALES DEED. THE AO HAS NOT DIS PUTED THE CONSIDERATION RECEIVED BY THE ASSESSEE. THE ADDITION HAS BEEN MAD E ON THE BASIS OF DEEMING PROVISIONS OF SECTION 50C. THE ASSESSEE HAS FURNISH ED ALL THE FACTS OF SALE, DOCUMENTS/ MATERIAL BEFORE THE AO. THE AO HAS NOT D OUBTED THE GENUINENESS OF THE DOCUMENTS/DETAILS FURNISHED BY THE ASSESSEE. ON LY BECAUSE THE ASSESSEE AGREED TO THE ADDITIONS BECAUSE OF THE DEEMING PROV ISIONS IT CANNOT BE CONSTRUED TO BE FILING OF INACCURATE PARTICULARS ON THE PART OF THE ASSESSEE. THE ASSESSEE AGREED TO ADDITION ON THE BASIS OF VALUATION MADE B Y THE STAMP VALUATION AUTHORITY CANNOT BE A CONCLUSIVE PROOF THAT THE SAL E CONSIDERATION AS PER THE SALE AGREEMENT IS SEEMED TO BE INCORRECT AND WRONG. IN V IEW OF THESE FACTS WE ARE OF THE CONSIDERED VIEW THAT PENALTY CANNOT BE LEVIED O N THE BASIS OF DEEMING PROVISION. WE ACCORDINGLY DELETE THE SAME. 10. RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE HIGH COURT OF CALCUTTA (SUPRA) AND THE CO-ORDINATE BENCH (SUPRA) WHICH ARE ON IDENTICAL SET OF FACTS, WE SET ASIDE THE FINDINGS O F THE LD. CIT(A) AND DIRECT THE A.O. TO DELETE THE PENALTY OF RS. 39,715 /-. 11. APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 17 - 08- 20 16. SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT.