Smt. Bhaviniben K. Patel, Ahmedabad V. The Dy.CIT, Circle-9, Ahmedabad

ITA 2235/AHD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8584 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 09-06-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 05-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO.2235/AHD/2014 ( / ASSESSMENT YEAR : 2006-07) SMT. BHAVNIBEN K. PATEL OFFICE NO.3 & 4, HASUBHAI CHAMBERS, NR. TOWN HALL, ELLISBRIDGE, AHMEDABAD - 380006 / VS. DY. COMMISSIONER OF INCOME-TAX, CIRCLE 9, AHMEDABAD. ./ ./ PAN/GIR NO. : APEPP 8958 K ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : --NONE-- / RESPONDENT BY : SHRI ALOK KUMAR, SR. D.R. / DATE OF HEARING 25/07/2017 !'# / DATE OF PRONOUNCEMENT 07/09/2017 $% / O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-XV, AHMEDABAD, DATED 28 TH MAY, 2014, FOR CONFIRMING THE PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR TH E ASSESSMENT YEAR (AY) 2006-07, ON THE FOLLOWING GROUNDS: I. THE LEARNED CIT (A)-XV, AHMEDABAD HAS ERRED IN LAW AND ON THE FACTS OF THE CASE BY CONFIRMING PENALTY OF RS.83,00 0/- U/S.271(1)(C) LEVIED BY THE ASSESSING OFFICER. ITA NO. 2235/AH D/2014 SMT. BHAVNIBEN K. PATEL VS. DCIT ASST.YEAR 2006-07 - 2 - 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- THE ASSESSEE HAS FILED HIS RETURN OF INCOME FOR TH E YEAR UNDER CONSIDERATION ON 25/07/2006 SHOWING THEREIN TOTAL I NCOME OF RS.45,03,890/-. THE ASSESSMENT WAS FINALIZED U/S.14 3(3) OF THE I.T. ACT, DETERMINING THEREIN TOTAL INCOME OF RS.48,70,240/- AND SHORT TERM CAPITAL GAIN OF RS.3,66,353/-. 2.2 THE REPLY WAS CONSIDERED BUT NOT ACCEPTABLE. IN PARA 3 OF THE AO STATED THAT THE CLAIM OF COST OF IMPROVEMENT OF RS. 3,66,353/- IS DISALLOWED IN THE ABSENCE OF DETAILS FURNISHED. DUR ING THE COURSE OF APPELLATE PROCEEDINGS ON QUERY THROUGH SUBMISSION D TD.18/01/2011 IT WAS INFORMED BY THE LD. AR THAT THE BETTERMENT CHARGES HAVE BEEN PAID TO AUDA FOR THE LAND SITUATED AT BODAKDEV-MAKRBA-VEJAL PUR AS A RESULT OF FINALIZATION OF TOWN PLANNING SCHEME BY AUDA WHICH GO TO INCREASE THE COST OF LAND AND THEREFORE THE SAME HAS BEEN RI GHTLY CONSIDERED AS COST OF IMPROVEMENT WHILE CALCULATING THE CAPITAL G AIN. IT WAS STATED THAT COPY OF LAND ACCOUNT WAS FILED ALONG WITH THE RETUR N IN WHICH PAYMENTS MADE TO AUDA WITH DATES AND AMOUNTS WERE INFORMED. PENALTY U/S.271(1)(C) OF THE ACT ARE SEPARATELY INITIATED F OR FURNISHING INACCURATE PARTICULARS OF INCOME. IT IS HIS DUTY TO FURNISH CO RRECT INFORMATION TO THE DEPARTMENT WHILE FILING THE RETURN OF INCOME. 2.3 HAVING REGARD TO THE ABOVE FACTS AND CIRCUMSTAN CES OF THE CASE, IT IS CLEAR THAT ASSESSEE HAD CONCEALED HIS INCOME, WI THIN THE MEANING OF ITA NO. 2235/AH D/2014 SMT. BHAVNIBEN K. PATEL VS. DCIT ASST.YEAR 2006-07 - 3 - EXPLANATION 5A TO SECTION 271(1)(C) OF THE I.T. ACT . LEARNED AO LEVY THE PENALTY U/S.271(1)(C) OF THE I.T. ACT OF RS.83,000/ -. 3. AGAINST THE SAID ORDER ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LEARNED CIT(A) WHO DISMISSED THE APPEAL OF THE ASSESSEE. 4. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. IN SUPPORT OF HIS CASE ASSESSEE FILED WRITTEN SUBMISSI ON AND MENTIONED THAT THE APPELLANT HAS NEITHER CONCEALED ANY INCOME NOR HAS FURNISHED INACCURATE PARTICULARS OF INCOME. IN RESPECT OF IMP ROVEMENT COST, WHICH IS IN RESPECT OF BETTERMENT CHARGES PAID BY THE APP ELLANT, COMPLETE DETAIL OF THE SAME HAVE BEEN GIVEN AT THE TIME OF FILING O F THE RETURN IN COMPUTATION OF CAPITAL GAIN. FURTHER, DURING THE CO URSE OF ASSESSMENT PROCEEDINGS ALSO, THE APPELLANT HAS FULLY AND SATIS FACTORILY EXPLAINED TO THE ASSESSING OFFICER THAT THE SAME HAS BEEN RIGHTL Y CLAIMED AS IMPROVEMENT COST WHILE COMPUTING CAPITAL GAIN. HOWE VER, EXPLANATION GIVEN BY THE APPELLANT HAS NOT BEEN ACCEPTED BOTH B Y THE ASSESSING OFFICER AND THE CIT(A). 4.2 FOR IMPOSING OF PENALTY, IT IS FURTHER NECESSAR Y TO BRING ON RECORD SOME MATERIALS OR EVIDENCES OR THE CIRCUMSTANCES LE ADING TO REASONABLE CONCLUSION THAT THE AMOUNTS OF ADDITIONS UNDER CONS IDERATION REPRESENT THE INCOME OF THE APPEALLANT. THERE IS CONSCIOUS CO NCEALMENT OR ACT OF FURNISHING INACCURATE PARTICULARS OF INCOME ON THE PART OF THE APPELLANT. ITA NO. 2235/AH D/2014 SMT. BHAVNIBEN K. PATEL VS. DCIT ASST.YEAR 2006-07 - 4 - MOREOVER, ONUS LIES ON THE DEPARTMENT TO PROVE THAT THE EXPLANATION OFFERED BY THE APPELLANT IS FALSE. 4.3 ASSESSEE FILED WRITTEN SUBMISSION AND CITED SUP REME COURTS JUDGMENT IN THE CASE OF DHARMENDRA TEXTILE PROCESSO RS [306 ITR 277] IN WHICH IT HAS BEEN HELD THAT THE PENALTY U/S.271(1)( C) IS A CIVIL LIABILITY AND, THEREFORE, WILLFUL CONCEALMENT AND MENS RE A ARE NOT ESSENTIAL INGREDIENT FOR IMPOSING PENALTY, MEANING THEREBY, W HERE ADDITION IS CONFIRMED, PENALTY SHALL MECHANICALLY FOLLOW. THIS JUDGMENT OF THE SUPREME COURT HAS BEEN OVER-RULED BY THE SUPREME CO URT ITSELF IN CASE OF RAJASTHAN SPG. & WVG. MILLS [23 DTR 158 (SC)]. I N THE CASE OF KANBAY SOFTWARE INDIA (P.) LTD. VS. DCIT [22 DTR (P UNE) (TRIB) 481], HAS ALSO HELD THAT NO PENALTY CAN BE LEVIED IN RESP ECT OF BONAFIDE CLAIM. 4.4 ASSESSEE ALSO SUBMITTED SUPREME COURT DECISION IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. [322 ITR 158] WHER EIN PENALTY WAS LEVIED ON ACCOUNT OF DISALLOWANCE U/S.14A AND THE H ONBLE SUPREME COURT DECIDED THE APPEAL IN FAVOUR OF THE ASSESSEE. IN THE PRESENT CASE AS EXPLANATION DULY ELABORATELY THE CLAIM OF IMPROVEME NT COST FROM CAPITAL GAIN. BECAUSE THE SAME HAS NOT BEEN ACCEPTED BY THE AO, NO PENALTY U/S.271(1)(C) CAN BE LEVIED AS HELD BY VARIOUS JUDI CIAL PRONOUNCEMENT NARRATED HEREIN ABOVE. ITA NO. 2235/AH D/2014 SMT. BHAVNIBEN K. PATEL VS. DCIT ASST.YEAR 2006-07 - 5 - 8. IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED O PINION THAT THIS IS NOT A FIT CASE WHERE PENALTY CAN BE CONFIRMED. THER EFORE, WE ALLOW THIS APPEAL. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 07/09/2017 SD/- SD/- IZNHI DQEKJ DSFM;K IZNHI DQEKJ DSFM;K IZNHI DQEKJ DSFM;K IZNHI DQEKJ DSFM;K EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; (PRADIP KUMAR KEDIA) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 07/09/2017 PRITI YADAV, SR.PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)-XVI , AHMEDABAD. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD TRUE COPY