Shri Sanket Vijay Shah, Ahmedabad V. The Income tax Officer,Ward-5(2), Ahmedabad

ITA 2423/AHD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0420 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 13-02-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 31-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA
• Keywords: Bonafide belief
• Section: 143(3); 54B; 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE SHRI MUKUL KUMAR SHRAWAT, JM AND SHRI A. MO HAN ALANKAMONY, AM) ITA NO.2423 & 2424/AHD/2012 A. Y.: 2008-09 SANKET VIJAY SHAH, 606, DOCTOR HOUSE, NR. PARIMAL CROSSING, AMAWADI, AHMEDABAD 380 015 P. A. NO. ANIPS 4621 E VS THE INCOME TAX OFFICER, WARD -5(2), AHMEDABAD (APPELLANT) (RESPONDENT) ITA NO.2425/AHD/2012 A. Y.: 2008-09 NALINI VIJAY SHAH, 104, PRERNA TIRTH -2, SATELLITE, AHMEDABAD 380 015 P. A. NO. AJBPS 2299 B VS THE INCOME TAX OFFICER, WARD -5(2), AHMEDABAD (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI VIVEK CHAVDA, AR DEPARTMENT BY SHRI Y. P. VERMA, SR. DR DATE OF HEARING: 13-02-2013 DATE OF PRONOUNCEMENT: 22-03-2013 O R D E R PER A. MOHAN ALANKAMONY: BOTH THE APPEALS IN ITA NO. 2423 AND 2424/AHD/2012 ARE FILED BY THE ASSESSEE AGGRIEV ED BY THE DIFFERENT ORDERS OF THE LEARNED CIT(A)-XI, AHMEDABA D FOR THE ASSESSMENT YEAR 2008-09 DATED 22-08-2012 IN APPEAL NO.CIT(A)- XI/240/QWD-5(2)/10-11, PASSED U/S 250 READ WITH SEC TION 143(3) OF ITA NO. 2423 AND 2424/AHD/ 2012(AY- 2008-09) SANKET VIJAY SHAH AND NALINI VIJAY SHAH VS ITO, W-5(2) AHMEDABAD 2 THE ACT, AND DATED 21-09-2012 IN APPEAL NO.CIT(A)-X I/97/WD- 5(2)/11-12, PASSED U/S 250 READ WITH SECTION 271 (1 ) (C) OF THE ACT. THE OTHER APPEAL IN ITA NO.2425/AHD/2012 IS ALSO PR EFERRED BY THE ASSESSEE, AGGRIEVED BY THE PENALTY LEVIED AND SUSTA INED BY THE REVENUE ON THE IDENTICAL ISSUE U/S 271 (1) (C) OF T HE ACT. ALL THE THREE APPEALS ARE HEARD TOGETHER SINCE THEY ARE RELATED T O QUANTUM ADDITION AND LEVY OF PENALTY RESPECTIVELY ON IDENTI CAL AND COMMON ISSUES OF RELATED PARTIES, AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN THE QUANTUM APPEAL ITA NO.2423/AHD/2012 THE A SSESSEE HAS RAISED FOUR ELABORATE AND DESCRIPTIVE GROUNDS. HOWEVER, THE CRUXES OF THE ISSUE ARE THAT:- 1. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE LEARNED AO WITH RESPECT TO ADDITION MADE FOR RS.11,20,830/- UNDER THE HEAD CAPITAL GAINS ARISING FROM SALE OF AGRICULTURAL LAND. 2. THE LEARNED CIT(A) HAS ERRED IN NOT GRANTING DED UCTION U/S 54B OF THE ACT SINCE THE ASSESSEE HAD PURCHASED ANOTHER AGRICULTURAL LAND FULFILLING ALL THE CONDIT IONS PROVIDED UNDER THE ACT. 3. IN THE PENALTY APPEAL IN ITA 2424/AHD/2012 AND I TA 2425/AHD/2012, BOTH THE ASSESSEES HAS RAISED FOUR E LABORATE AND DESCRIPTIVE GROUNDS, WHEREIN THE CRUX OF THE ISSUE IS THAT THEY ARE AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A) FOR HA VING ERRED IN CONFIRMING THE PENALTY LEVIED BY THE AO U/S 271 (1) (C) OF THE ACT. ITA NO. 2423 AND 2424/AHD/ 2012(AY- 2008-09) SANKET VIJAY SHAH AND NALINI VIJAY SHAH VS ITO, W-5(2) AHMEDABAD 3 ITA NO.2423/AHD/2012: (AY - 2008-09) [ASSESSEES (SANKET VIJAY SHAH) QUANTUM APPEAL] 4. BRIEF FACTS: - THE ASSESSEE IS AN INDIVIDUAL HAV ING INCOME FROM TRADING OF SHARES FILED HIS RETURN OF INCOME ON 30- 09-2008 DECLARING AN INCOME OF RS.3,94,550/-. THE CASE WAS TAKEN UP F OR SCRUTINY THROUGH CASS AND ASSESSMENT WAS COMPLETED U/S 143(3 ) OF THE ACT ON 16-11-2010 WHEREIN THE LEARNED AO MADE AN ADDITI ON OF RS.11,20,830/- TOWARDS LONG TERM CAPITAL GAIN ARISI NG OUT OF SALE OF AGRICULTURAL LAND SITUATED WITHIN THE MUNICIPAL LIM IT OF AUDA. THE ASSESSEE IN HIS RETURN OF INCOME HAD DISCLOSED PROF IT ON SALE OF AGRICULTURAL LAND AT SHILAJ FOR RS.12,81,948/-. IT WAS FURTHER DISCLOSED BY THE ASSESSEE THAT HE HAD SOLD THE AGRICULTURAL L AND JOINTLY WITH NALINI VIJAY SHAH AND OTHERS. SINCE THE ASSESSEE WA S UNDER THE BONAFIDE IMPRESSION THAT THE AGRICULTURAL LAND IS S ITUATED MORE THAN 8 KMS AWAY FROM THE MUNICIPAL LIMIT OF AHMEDABAD, CON SIDERED THE GAIN ARISING FROM THE SALE OF THE LAND AS EXEMPT U/ S 2 (14) OF THE ACT. HOWEVER, SUBSEQUENTLY DURING THE COURSE OF ASSESSME NT PROCEEDINGS THE LEARNED AO ESTABLISHED THAT THE LAND FELL WITHI N THE MUNICIPAL LIMIT OF AUDA AS IT WAS EVIDENT FROM THE DATE OF THE SALE DEED AND THE LETTER FURNISHED BY AHMEDABAD URBAN DEVELOPMENT AUT HORITY AT THE REQUEST OF THE REVENUE DATED 01-11-2010, WHEREIN IT WAS STATED THAT:- WITH REFERENCE TO THE ABOVE MENTIONED LETTER, I WO ULD LIKE TO INTIMATE THAT BLOCK NO.1343 OF SHILAJ TALUKA: DASCR OI, DIST: AHMEDABAD FALLS WITHIN THE DEVELOPMENT MAP OF AGRIC ULTURAL ZONE OF GOVERNMENT. MOREOVER ACCORDING TO THE NOTIF ICATION NO. K. V./211/2006/A. M. N./902006/410/P DTD. 20/7/06 O F DEPARTMENT OF URBAN DEVELOPMENT & URBAN HOUSING ITA NO. 2423 AND 2424/AHD/ 2012(AY- 2008-09) SANKET VIJAY SHAH AND NALINI VIJAY SHAH VS ITO, W-5(2) AHMEDABAD 4 DEVELOPMENT OF GOVERNMENT, THE SAID BLOCK FALLS WIT HIN THE LIMITS OF AHMEDABAD MUNICIPAL CORPORATION. THIS IS TO INTI MATE. 5. THE LEARNED AR COULD NOT CONTROVERT TO THE FINDI NG OF THE LEARNED AO, HOWEVER STOUTLY ARGUED THAT THE ASSESSE E HAD PURCHASED AGRICULTURAL LAND ON 06-06-2008 AMOUNTING TO RS.24 LACS WHICH IS OVER AND ABOVE THE CAPITAL GAINS EARNED ON THE SALE OF THE AGRICULTURAL LAND AND, THEREFORE, WAS ELIGIBLE FOR DEDUCTION U/S 54B OF THE ACT. IT WAS, THEREFORE, PRAYED THAT THE ADDITIO N MADE BY THE LEARNED AO MAY BE DELETED. 6. THE LEARNED DR SUPPORTED THE ORDERS OF THE REVEN UE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE PAPER BOOK SUBMITTED BY THE ASSESSEE. IT IS EVIDENT FROM THE LETTER FURNISHED BY THE AUDA DATED 01-11-2010 ON THE REQUE ST OF THE LEARNED AO THAT THE AGRICULTURAL LAND SOLD BY THE A SSESSEE FALLS WITHIN THE LIMITS OF AHMEDABAD MUNICIPAL CORPORATION. THER EFORE, AS PER SECTION 2(14) (III) (A) OF THE ACT THE AGRICULTURAL LAND SOLD BY THE ASSESSEE FALLS WITHIN THE DEFINITION OF CAPITAL ASS ET AND THE PROVISIONS OF CAPITAL GAIN GETS ATTRACTED. FOR THE AFORESAID REASON, WE CONFIRM THE ORDER OF THE LEARNED CIT(A) AND LEARNED AO ON T HIS ISSUE. HOWEVER, THE LEARNED AR HAS POINTED OUT THAT THE AS SESSEE HAS PURCHASED AGRICULTURAL LAND ON 06-06-2008 FOR A VAL UE OF RS.24 LACS AND, THEREFORE, ELIGIBLE FOR DEDUCTION U/S 54B OF T HE ACT. THE COPY OF THE PURCHASE DEED DATED 06-06-2008 IS PLACED ON REC ORD BY THE LEARNED DR (PAPER BOOK PAGE NO.28 TO 45). THIS FACT DOES NOT COME OUT FROM THE ORDER OF THE LEARNED AO OR FROM THE OR DER OF THE LEARNED ITA NO. 2423 AND 2424/AHD/ 2012(AY- 2008-09) SANKET VIJAY SHAH AND NALINI VIJAY SHAH VS ITO, W-5(2) AHMEDABAD 5 CIT(A). IT APPEARS THAT THEY HAVE NOT CONSIDERED TH E CLAIM OF THE ASSESSEE OR THE SAME WERE NOT BROUGHT TO THE KNOWLE DGE OF THE REVENUE BY THE ASSESSEE AT THE TIME OF ASSESSMENT/A PPELLATE PROCEEDINGS. THEREFORE IN THE INTEREST OF JUSTICE, WE REMIT THIS ISSUE BACK TO THE FILE OF THE LEARNED AO TO CONSIDER THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 54B OF THE ACT WITH REGA RD TO THE PURCHASE OF THE AGRICULTURAL LAND AND PASS APPROPRI ATE ORDER AS PER LAW AND MERIT AFTER AFFORDING SUFFICIENT OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE AND EXAMINING ALL THE EVIDENCES PRODUC ED BY THE ASSESSEE. ACCORDINGLY, CONCISED GROUND NO.1 (GROUND NO. 1.1 TO 4.1) IS DISMISSED AND CONCISED GROUND NO.2 (GROUND NO.4. 2) IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.2424/AHD/2012: AY 2008-09) [ASSESSEES (SANKET VIJAY SHAH) PENALTY APPEAL] 8. THE LEARNED AO HAD INITIATED PENALTY PROCEEDINGS AND LEVIED PENALTY FOR RS.2,24,170/- FOR WRONGLY CLAIMING THE CAPITAL GAIN EARNED ON SALE OF AGRICULTURAL LAND AS EXEMPT BY VIRTUE OF SECTION 2(14) OF THE ACT AS DISCUSSED HEREINABOVE. THE LEARNED AO HAD ES TABLISHED, BY GATHERING INFORMATION FROM THE AHMEDABAD URBAN DEVE LOPMENT AUTHORITY, THAT THE AGRICULTURAL LAND SOLD BY THE A SSESSEE FELL WITHIN THE MUNICIPAL CORPORATION LIMIT WITH EFFECT FROM 20-07- 2007 WHILE AS THE AGRICULTURAL LAND WAS SOLD ON 10-03-2008, THEREBY A TTRACTING THE PROVISIONS OF SECTION 2(14) (III) (A) OF THE ACT,. ON APPEAL THE LEARNED CIT(A) CONFIRMED THE ORDER OF THE LEARNED AO. ITA NO. 2423 AND 2424/AHD/ 2012(AY- 2008-09) SANKET VIJAY SHAH AND NALINI VIJAY SHAH VS ITO, W-5(2) AHMEDABAD 6 9. THE LEARNED AR ARGUED BEFORE US STATING THAT THE ASSESSEE HAD FURNISHED ALL THE RELEVANT INFORMATION BEFORE THE R EVENUE AND HAD NOT FURNISHED ANY INCORRECT PARTICULARS IN ORDER TO ATT RACT THE PENAL PROVISIONS OF SECTION 271 (1) (C ) OF THE ACT. IT W AS, THEREFORE, PRAYED THAT THE PENALTY LEVIED BY THE REVENUE MAY BE DELET ED. 10. THE LEARNED DR SUPPORTED THE ORDERS OF THE REVE NUE AND ARGUED STATING THAT THE ASSESSEE HAD WRONGLY CLAIME D EXEMPTION BY VIRTUE PROVISIONS OF SECTION 2 (14) THOUGH HE WAS N OT ENTITLED FOR SUCH CLAIM AND, THEREFORE, THE REVENUE HAD RIGHTLY LEVIE D THE PENALTY AND THE SAME MAY BE CONFIRMED. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE MATERIALS ON RECORD. FROM THE FACTS OF THE CASE IT IS EVIDENT THAT UNTIL 19-07-2006 THE AGRICULTURAL LAND OF THE ASSESSEE FE LL OUTSIDE THE MUNICIPAL LIMIT. ONLY FROM 20-07-2006, VIDE NOTIFIC ATION THE LAND WAS BROUGHT WITHIN THE MUNICIPAL LIMIT OF AHMEDABAD. TH E ASSESSEE HAD SOLD THE LAND ON 10-03-2008 I.E. WITHIN A PERIOD OF ONE YEAR FROM THE DATE OF SUCH NOTIFICATION. UNDER THESE CIRCUMSTANCE S, THE ASSESSEE AS CLAIMED WOULD HAVE BEEN UNDER THE BONA FIDE BELI EF THAT THE LAND FELL OUTSIDE THE MUNICIPAL LIMIT OF AHMEDABAD. MORE OVER, HE HAD FURNISHED THE DETAILS OF CAPITAL GAIN EARNED IN HIS RETURN OF INCOME. FURTHER, THE ASSESSEE HAD PURCHASED ANOTHER AGRICUL TURAL LAND FOR RS.24 LACS ON 06-06-2008 AND THE CLAIM OF DEDUCTION U/S 54B OF THE ACT WAS NOT CONSIDERED BY THE REVENUE. FROM THE FAC TS AND CIRCUMSTANCES OF THE CASE IT IS APPARENT THAT THE A SSESSEE HAD NOT FURNISHED ANY INACCURATE PARTICULARS OF INCOME OR C ONCEALED HIS ITA NO. 2423 AND 2424/AHD/ 2012(AY- 2008-09) SANKET VIJAY SHAH AND NALINI VIJAY SHAH VS ITO, W-5(2) AHMEDABAD 7 INCOME. IT IS ONLY A CASE WHERE THE ASSESSEE UNDER THE BONAFIDE BELIEF THAT THE LAND WAS OUTSIDE THE MUNICIPAL LIMI T OF AHMEDABAD CLAIMED EXEMPTION BY VIRTUE OF SECTION 2(14) OF THE ACT. AT THIS JUNCTURE, WE ARE REMINDED OF THE DECISION RENDERED BY THE HONBLE APEX COURT IN THE CASE OF CIT VS RELIANCE PETROPROD UCTS PVT. LTD. [2010] 322 ITR 158 (SC) WHEREIN IT WAS HELD THAT W HERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE I N ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE I S NO QUESTION OF INVITING PENALTY UNDER SECTION 271 (1) ( C ). A MER E MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NO T AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHIN G INACCURATE PARTICULARS. IN THIS CASE BEFORE US THE ASSESSEE HAD CLAIMED EXEMPTION UNKNOWING OF THE RECENT GOVERNMENT NOTIFI CATION. FURTHER THE ASSESSEE HAD FURNISHED ALL THE RELEVANT PARTICU LARS IN HIS RETURN OF INCOME. THEREFORE RELYING ON THE DECISION OF THE H ON. APPEX COURT, WE HEREBY DELETE THE PENALTY LEVIED BY THE LEARNED AO WHICH WAS FURTHER CONFIRMED BY THE LEARNED CIT(A). IN THE RES ULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.2425/AHD/2012 (AY 2008-09) [ASSESSEES (NALINI VIJAY SHAH) PENALTY APPEAL] 12. SINCE, THE FACTS AND ISSUE OF THIS APPEAL ARE S IMILAR AND IDENTICAL TO THE FACTS AND ISSUE OF APPEAL NO.2424/ AHD/2012 IN THE CASE OF THE ASSESSEE SANKET VIJAY SHAH, DECIDED BY US HEREINABOVE, IN FAVOUR OF THE ASSESSEE, THIS APPEAL OF THE ASSES SEE IS ALSO ALLOWED FOR THE SAME REASONS MENTIONED THEREIN, IN HER FAVO UR. ACCORDINGLY, ITA NO. 2423 AND 2424/AHD/ 2012(AY- 2008-09) SANKET VIJAY SHAH AND NALINI VIJAY SHAH VS ITO, W-5(2) AHMEDABAD 8 THE PENALTY LEVIED BY THE LEARNED AO WHICH WAS FURT HER CONFIRMED BY THE LEARNED CIT(A) IS HEREBY DELETED. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO .2423/AHD/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE APPEALS OF THE ASSESSEE IN ITA NO.2424/AHD/2012 AND 2425/AHD/2012 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22-03-2013. SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT LAKSHMIKANT LAKSHMIKANT LAKSHMIKANTA AA A DEKA/ DEKA/ DEKA/ DEKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASSTT. REGISTRAR, ITAT, AHMEDABA D 1. DATE OF DICTATION: DIRECT ON COMPUTER 19-03-13 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 19-03-13 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: N.A. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: