ASST CIT 16(2), MUMBAI V. JAMSHED E BAPASOLA, MUMBAI

ITA 2404/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3050 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Department
• Bench Allotted: J
• Assessment Year: 2005-2006
• Appeal Filed On: 10-04-2014
• Court: TRIBUNAL
• Department Lawyers: SAMBIT MISHRA
• Assessee Lawyers: K GOPAL JITENDRA SINGH
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Cost of acquisition
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER I.T.A. NO. 2404/M/2014 (AY 2005 - 2006) ACIT 16(2), 2 ND FLOOR, MATRU MANDIR, TARDEO ROAD, MUMBAI 400 007. / VS. JAMSHED E BAPASOLA, F - 10, RAMESH NIWAS, 51 - C, BHULABHAI DESAI ROAD, MUMBAI 400 026. ./ PAN : AAAPB7671A ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SAMBIT MISHRA, DR / RESPONDENT BY : SHRI K. GOPAL / JITENDRA SINGH / DATE OF HEARING : 05.10.2015 / DATE OF PRONOUNCEMENT :16 .10.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 10.4.2014 IS AGAINST THE ORDER OF THE CIT (A)27, MUMBAI DATED 27.1.2014 FOR THE AY 2005 - 2006. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN DELETING PENALTY U/S 271(1)(C) LEVIED FOR FURNISHING INACCURATE PARTICULARS OF INCOME BY ASSESSEE OF RS. 1.28 CRS WHEREIN PENALTY OF RS. 28.29 LAKHS WAS LEVIED AS PER ACT IN CONFIRMATION OF QUANTUM APPEAL OF ASSESSEE BY FAA? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN NOT TAKING COGNIZANCE OF HONBLE SUPREME COURT IN THE CASE OF MAK DATA (P) LTD VS. CIT - II, 358 ITR 593 (2013) WHICH CLARIFIES, ......VOLUNTARY DISCLOSURE DOES NOT R ELEASE ASSESSEE FROM MISCHIEF OF PENAL PROCEEDINGS U/S 271(1)(C) OF THE ACT. 2. THE ISSUE RAISED IN THIS APPEAL RELATES TO THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT IN RESPECT OF THE ADDITION RELATING TO INVOKING THE PROVISIONS OF SECTION 50C OF THE AC T AND ALSO RELATING TO THE DISTURBANCE OF THE ASSESSEES CLAIM RELATING TO THE COST OF ACQUISITION. AT THE VERY OUTSET, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION MADE U/S 50C OF THE ACT WAS CONFIRMED BY THE TRIBUNAL. FURTHER, IT IS 2 ALSO SUB MITTED THAT THE PENALTY LEVIED U/S 271(1)(C) IN RESPECT OF SUCH ADDITIONS ARE NOT SUSTAINABLE IN LAW IN VIEW OF THE BINDING JURISDICTIONAL HIGH COURT JUDGMENT IN THE CASE OF CIT VS. FORTUNE HOTELS AND ESTATES (P) LTD [2014] 232 TAXMAN 481 (BOMBAY), DATED 2 6.9.2014 COPY OF WHICH IS PLACED ON RECORD. 3. AFTER HEARING BOTH THE PARTIES ON THIS ISSUE AND ON PERUSAL OF THE CITED BINDING JURISDICTIONAL HIGH COURT JUDGMENT IN THE CASE OF FORTUNE HOTELS AND ESTATES (P) LTD (SUPRA) , WE FIND THE SAME IS RELEVANT FOR THE FOLLOWING PROPOSITION: - IN TERMS OF SECTION 50C, HIGHER SALES CONSIDERATION OF PROPERTY DETERMINED BY DVO DID NOT BY ITSELF AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME SO AS TO LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. CONSIDERING THE ABOVE BINDING RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT, WE ARE OF THE OPINION THAT THE RELEVANT RELATABLE PENALTY SHOULD BE DELETED AS HELD BY THE CIT (A). ACCORDINGLY, THE ORDER OF THE CIT (A) I N THIS REGARD DOES NOT CALL FOR ANY INTEREFERENCE. 5. FURTHER, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE OTHER SEGMENT OF PENALTY LEVIED BY THE AO RELATES TO THE DISTURBING OF THE ASSESSEES CLAIM RELATING TO THE COST OF ACQUISITION. IN THIS REGARD, BRINGING OUR ATTENTION TO THE ORDER OF THE TRIBUNAL ON MERITS RELATING TO THE SAID COST OF ACQUISITION, LD COUNSEL FOR THE ASSESSEE READ OUT THE RELEVANT PARA 5.2 AND SUBMITTED THAT THE COST OF ACQUISITION IS REQUIRED TO BE ADOPTED ONLY AS ON 1.4.1986 AND THE INDEXED COST OF ACQUISITION OF R S. 33 LAKHS WORKED OUT TO RS. 1,13,14,285/ - . ON APPEAL, CIT (A) DELETED THE RELATABLE PENALTY CALLING IT A DEBATABLE ISSUE AND THE SAME IS EVIDENT FROM THE CONTENTS OF PARA 2.4.2 OF THE IMPUGNED ORDER. IN THIS REGARD , THE ONLY ARGUMENT RAISED BY THE REVENUE RELATES TO NON - CONSIDERATION OF THE PAYMENT OF RS. 3 LAKHS BY THE CIT (A) IN HIS ORDER WHILE DISCUSSING THE PENALTY ON THE SAID PART OF THE COST OF CONSIDERATION. 6. AFTER HEARING BOTH THE PARTIES AND AFTER GOING T HROUGH THE ORDER OF THE CIT (A) AS WELL AS THE SAID TRIBUNALS ORDER DATED 10.7.2013 (SUPRA), WE FIND THE CIT (A) IS CATEGORICAL IN STATING THAT THE INDEXED COST OF ACQUISITION TO THE COST OF RS. 1,13,14, 285/ - DOES NOT ATTRACT ANY PENALTY U/S 271(1)(C) OF THE ACT, WITH WHICH WE AGREE. ON THE ISSUE OF RS. 3 LAKHS, THE CIT (A) IS DIRECTED TO APPLY HIS MIND ONCE AGAIN IN THE REMANDING PROCEEDINGS AND PASS A SPEAKING ORDER IN THIS REGARD. THEREFORE, IN SUMMARY, WE FIND THE ORDER OF THE CIT (A) DOES NOT CALL F OR ANY INTERFERENCE SO FAR AS THE PENALTY RELATABLE TO ADDITION U/S 50C OF THE ACT AS WELL AS 3 THE COST OF CONSIDERATION AS ON 1.4.1986 AMOUNTING TO RS. 1,13,14,285/ - IS CONCERNED. FOR THAT LIMITED PURPOSE OF EXAMINING THE LEVYABILITY OF PENALTY ON THE SUM OF RS. 3 LAKHS, THE MATTER NEEDS TO BE REMANDED TO THE FILE OF THE CIT (A) FOR WANT OF SPEAKING ORDER . CIT (A) WILL GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND PASS A SPEAKING ORDER WITHIN A REASONABLE TIME. ACCORDINGLY WE ORDER. 7 . IN THE RESULT, APPEAL OF THE REVENUE IS DISPOSED OF WITH THE ABOVE DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH OCTOBER, 2015. SD/ - SD/ - (SANDEEP GOSAIN) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 16 .10 .2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI