Shri Amrutlal Ishwarlal Patel, Mehsana V. The Income tax Officer,Ward-1, Mehsana

ITA 2237/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85810 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 05-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Keywords: Depreciation; Business expenditure; Bonafide mistake

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ./ ITA NO.2237/AHD/2011 / ASSTT. YEAR: 2007-08 SHRI AMRUTLAL ISHWARLAL PATEL PROP: PATEL ELECTRICAL CORPORATION VIMAL SUPER MARKET MEHSANA 384 001. VS ITO, WARD-1 MEHSANA. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI HARDIK VORA, AR REVENUE BY : SHRI M.K. SINGH, SR.DR / DATE OF HEARING : 02/03/2015 / DATE OF PRONOUNCEMENT: 13/03/2015 $%/ O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: THIS AN APPEAL FILED BY THE ASSESSEE AGAINST ORDER OF THE CIT(A), GANDHINAG AR DATED 3/6/2011 FOR ASSTT.YEAR 2007-08. 2. THE SOLE GROUND OF APPEAL TAKEN READS AS UNDER: 1. ON THE FACTS AND IN CIR INSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LD.CIT(A) HAS ERRED IN CONFIRMI NG THE PENALTY OF RS.1,08,580/- LEVIED BY THE AO U/S.271(1)(C) OF THE I.T.ACT, 1961. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED ORDE RS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, PENALTY UNDER SECTION 271(1)(C) OF THE ACT FOR RS.1 ,08,580/- WAS LEVIED BY THE AO ON THE GROUND THAT THE ASSESSEE HAS CONCE ALED PARTICULARS OF INCOME/FURNISHED INACCURATE PARTICULARS OF INCOME R ELATING TO INCOME OF RS.6,30,778/-. IN THE INSTANT CASE, THE AO OBSERVE D THAT THE ASSESSEE ITA NO.2237/AHD/2011 2 HAS SOLD INDUSTRIAL LAND AND SHED FOR RS.10 LAKHS. THE ASSESSEE CREDITED THE SALE PROCEEDS IN THE PROFIT & LOSS ACCOUNT. AF TER DEDUCTING VARIOUS EXPENSES INCURRED BY IT NET RESULT SHOWN AS BUSINES S LOSS OF RS.6,898/- IN ITS RETURN OF INCOME. THE AO WAS OF THE VIEW TH AT THE PROFIT DERIVED ON SALE OF INDUSTRIAL LAND AND SHED IS ASSESSABLE U NDER THE HEAD CAPITAL GAINS AS LONG TERM CAPITAL GAIN, AND ACCORDINGLY, COMPUTED LONG TERM CAPITAL GAIN OF RS.6,30,778/-. VARIOUS EXPENSES CL AIMED WERE NOT ALLOWED AS BUSINESS LOSS. IT IS ALSO NOTED THAT DU RING THE COURSE OF ASSESSMENT PROCEEDINGS WHEN THE AO CONFRONTED THE A SSESSEE WITH HIS VIEW, THE ASSESSEE FURNISHED REVISED COMPUTATION SH OWING THEREIN THE INCOME AS CAPITAL GAIN. THE ASSESSEE ACCEPTED THE ASSESSMENT SO MADE BY THE AO AND DID NOT FILE ANY APPEAL THERE AGAINST . 4. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT NO REASON WAS STATED THEREIN BY THE AO FOR NOT ALLOWING SET OFF O F BUSINESS LOSS RESULTED FROM BUSINESS EXPENSES CLAIMED BY THE ASSE SSEE. IN APPEAL AGAINST THE PENALTY ORDER, THE CIT(A) CONFIRMED TH E ACTION OF THE AO AS IN HIS VIEW, THE ASSESSEE WAS GUILTY OF FURNISHING INACCURATE PARTICULARS OF INCOME IN SO FAR AS THE ASSESSEE HAS NOT DISCLOS ED THE FACTS WHICH WERE NEEDED TO DETERMINE THE NATURE OF INCOME. IT WAS NOT DISCLOSED THAT THE LAND AND SHED WERE USED EARLIER FOR BUSINE SS AND DEPRECIATION WAS CLAIMED AND IT WAS LATER ON RENTED AND INCOME S HOWN AS HOUSE PROPERTY INCOME. 5. AR OF THE ASSESSEE CONTENDED BEFORE US THAT MIST AKE IN COMPUTATION OF INCOME WAS READILY AGREED BY THE ASS ESSEE WHEN POINTED OUT BY THE AO AND NO ATTEMPT WAS MADE TO CO NCEAL THE INCOME. HE RELIED UPON THE DECISION OF THIS BENCH OF THE TR IBUNAL IN THE CASE OF ITO VS. SHRI LALUBHAI BABUBHAI PATEL, ITA NO.228/AH D/2013 ORDER DATED 20.6.2014 IN THE ASSTT.YEAR 2009-10, WHEREIN IT WAS HELD AS UNDER: ITA NO.2237/AHD/2011 3 6. WE FIND THAT NO SPECIFIC ERROR IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) COULD BE POINT ED OUT BY THE DEPARTMENTAL REPRESENTATIVE. FURTHER, IN THE INSTANT CASE IT IS NOT IN DISPUTE THAT THE RECEIPT OF RS 49,50,000/- WAS DULY DISCLOSED BY THE ASSESSEE DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS AND WHEN POINTED O UT BY THE ASSESSING OFFICER ABOUT ITS TAXABILITY, THE ASSESSEE READILY AGREED TO THAT AND MADE NO ATTEMPT TO HIDE THE MATERIAL FACT. THE ABOVE CONDUCT OF THE ASSESSEE SH OWS THE BONAFIDES OF HIS CONTENTION THAT OMISSION IN RE TURN OF INCOME WAS NOT DELIBERATE BUT WAS DUE TO BONAFIDE MISTAKE. IN THE ABOVE CIRCUMSTANCES, WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). IT IS CONFIRM ED. THE APPEAL OF THE REVENUE IS DISMISSED. 6. ON THE OTHER HAND, THE DR SUPPORTED THE ORDERS O F THE LOWER AUTHORITIES. 7. WE FIND THAT IN THE INSTANT CASE, DIFFERENCE BET WEEN THE RETURN OF INCOME AND THE ASSESSED INCOME AROSE MAINLY DUE TO CHANGE OF HEAD OF INCOME UNDER WHICH THE PROFIT DERIVED ON SALE OF IN DUSTRIAL SHED AND LAND IS ASSESSABLE BY THE AO, AND ALSO BECAUSE OF N ON-ALLOWANCE OF SET OFF OF BUSINESS EXPENDITURE. WE FIND THAT IT IS NO T THE CASE OF THE REVENUE THAT THE ASSESSEE HAS NOT DISCLOSED THE PAR TICULARS OF SALE OF SHED AND LAND CORRECTLY AND COMPLETELY. 8. FURTHER, NO MATERIAL WAS BROUGHT ON RECORD TO SH OW THAT THE BUSINESS EXPENDITURE CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME WERE BOGUS. THUS, NO FALSITY OR INACCURACY IN THE PRELIMINARY MATERIAL FACTS FURNISHED BY THE ASSESSEE IN THE RETURN OF IN COME WAS FOUND BY THE DEPARTMENT. THE ONLY DEFECT POINTED OUT BY THE AO WAS IN THE COMPUTATION OF INCOME ON THE BASIS OF THESE PRELIMI NARY FACTS. 9. IN THE ABOVE CIRCUMSTANCES, IN OUR CONSIDERED VI EW, THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. REL IANCE PETROPRODUCTS PVT. LTD., 322 ITR 158 (SC) IS CLEARLY APPLICABLE T O THE FACTS OF INSTANT CASE AND SUPPORT THE CASE OF THE ASSESSEE, WHEREIN IT WAS HELD THAT ITA NO.2237/AHD/2011 4 WHERE THERE IS NO FINDING THAT NO DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN OF INCOME ARE FOUND TO BE INACCURATE OR ERRO NEOUS OR FALSE, THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTIO N 271(1)(C) OF THE ACT. WE, THEREFORE, DELETE THE PENALTY UNDER SECTION 271 (1)(C) OF THE ACT OF RS.1,08,580/- AND ALLOW THE APPEAL OF THE ASSESSEE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 13 TH MARCH, 2015 AT AHMEDABAD. SD/- SD/- ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER