PRANAV D. PATEL, MUMBAI V. ASST CIT 21(1), MUMBAI

ITA 244/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3325 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 12-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABI RAMA KARTIKIYEN
• Assessee Lawyers: SUBHAM RATHI
• Keywords: Sale consideration of property below Jantri Value; Revised return
• Section: 271(1)(c); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI SANDEEP GOSAIN (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 244/MUM/2017 ASSESSMENT YEAR: 2009 - 10 PRANAV D. PATEL, FLAT NO. 6, 2 ND FLOOR, VIBHUTI APARTMENTS, RUIA PARK, GANDHI GRAM ROAD, JUHU, VILE PARLE (W), MUMBAI - 400049. VS. ASST. COMMISSIONER OF INCOME TAX - 21(1), MUMBAI. PAN NO. AAVPP8776H APPELLANT RESPONDENT ASSESSEE BY : MR. SUBHAM RATHI , AR REVENUE BY : MR. ABI RAMA KARTIKIYEN , DR DATE OF HEARING : 12/02/2019 DATE OF PRONOUNCEMENT: 12/02/2019 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2009 - 1 0 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 3 7 , MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF THE PENALTY LEVIED U/S 271(1)(C) OF THE INCOME TAX ACT 1961, (THE ACT). 2. THE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS AGAINST THE ORDER OF THE LD. CIT(A) CONFIRMING THE PENALTY OF RS.2,24,361/ - LEVIED BY THE ASSESSING OFFICER (AO) U/S 271(1)(C) OF THE ACT. PRANAV D. PATEL ITA NO. 244/MUM/2017 2 3. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2009 - 10 ON 29.07.2009 DECLARING INCOME AT RS.60,32,280/ - . THEREAFTER, HE FILED A REVISED RETURN DECLARING TOTAL INCOME OF RS.1,71,62,610/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE VALUE OF PROPERTY SOLD BY THE ASSESSEE WAS MENTIONE D AT RS.13,50,00,000/ - , WHEREAS AS PER THE STAMP DUTY AUTHORITIES THE VALUE SHOWN WAS RS.14,31,53,652/ - . ACCORDINGLY, THE AO RE - WORKED THE SHARE OF THE ASSESSEE IN THE LONG TERM CAPITAL GAINS (LTCG) IN RESPECT OF TRANSACTION OF SALE OF PROPERTY AT RS.1,83, 71,812/ - AS AGAINST RS.1,72,52,006/ - , BY MAKING ADDITION OF DIFFERENCE IN LTCG IN THE HANDS OF THE ASSESSEE AT RS.11,21,806/ - . THEREAFTER, THE AO LEVIED A PENALTY OF RS.2,24,361/ - U/S 271(1)(C) OF THE ACT. 4. IN APPEAL, THE LD. CIT(A) OBSERVED THAT (I) IT IS MANDATORY ON THE PART OF THE ASSESSEE TO DISCLOSE ALL MATERIAL FACTS IN THE RETURN OF INCOME SO THAT THE AO CAN ARRIVE AT CORRECT INCOME FOR THE YEAR, (II) FURTHER, BY OPERATION OF EXPLANATION 1 TO SECTION 271(1)(C), THE ONUS SQUARELY LIES ON THE ASSES SEE AND THE FINDINGS GIVEN AT THE TIME OF ASSESSMENT ARE RELEVANT AND HAVE MUCH PROBATIVE VALUE , WHERE THE ASSESSEE OFFERS NO EXPLANATION/DETAILS AND (III) THE ASSESSEE HAS NOT FURNISHED ANY SATISFACTORY EXPLANATION DURING THE PROCEEDINGS ABOUT INACCURATE PARTICULARS REGARDING THE DIFFERENCE IN LTCG OF RS.11,21,806/ - . WITH THE ABOVE OBSERVATIONS, THE LD. CIT(A) CONFIRMED THE PENALTY OF RS.2,24,361/ - LEVIED BY THE AO. 5. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMITS THAT ON SIMILAR FACTS IN THE CASE OF THE OTHER CO - OWNERS , THE ITAT B BENCH, MUMBAI IN PRANAV D. PATEL ITA NO. 244/MUM/2017 3 THE CASE OF NIRAJ MUKESH PATEL V. ACIT (ITA NO. 290/MUM/2017 FOR AY 2009 - 10) AND NIKHIL MUKESH PATEL V. ACIT (ITA NO. 291/MUM/2017 FOR AY 2009 - 10) HAVE DELETED THE PENALTY LEVIED BY THE AO. ON THE OTH ER HAND, THE LD. DR SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. SIMILAR ISSUE AROSE BEFORE ITAT B BENCH MUMBAI IN THE CASE OF THE OTHER CO - OWNERS: NIRAJ MUKESH PATEL & NIKHIL MUKESH PATEL (SUPRA) . T HE TRIBUNAL VIDE ORDER DATED 19.09.2018, FOLLOWING THE DECISION IN CIT V. FORTUNE HOTELS & ESTATE (P.) LTD . (2014) 52 TAXMANN.COM 330 (BOM . ) AND CIT V. MADAN THEATRES LTD . (2014) 44 TAXMANN.COM 382 (CAL . ) HELD AS UNDER: 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. THE 1 ST ISSUE RELATES TO THE LEVY OF PENALTY U/S 271(1)(C) ON THE DIFFERENCE OF VALUATION BETWEEN THE STAMP DUTY AUTHORITIES AND THE ONE SHOWN BY THE ASSESSEE. IN FORTUNE HOTE LS & ESTATES (P) LTD. (SUPRA), THE HONBLE BOMBAY HIGH COURT HAS HELD THAT 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 U/S 271(1)(C) OF THE ACT. IN MADAN THEATERS LTD . (SUPRA), THE HONBLE CALCUTTA HIGH COURT HAS HELD THAT WHERE ACTUAL AMOUNT RECEIVED ON ACCOUNT OF SALE OF PROPERTY WAS OFFERED FOR TAXATION BUT THE ASSESSING OFFICER, INVOKING SECTION 50C DEEMED SALE CONSIDERA TION AT HIGHER SUM, IN ABSENCE OF ANY IOTA OF EVIDENCE THAT THE ASSESSEE HAD RECEIVED MORE AMOUNT THAN THAT SHOWN BY IT, PENALTY U/S 271(1)(C) WAS NOT LEVIABLE. FACTS BEING IDENTICAL, WE FOLLOW THE RATIO LAID DOWN IN THE ABOVE DECISIONS AND DELETE THE PENALTY LEVIED ON THE DIFFERENCE BETWEEN THE VALUE PRANAV D. PATEL ITA NO. 244/MUM/2017 4 DETERMINED BY THE STAMP DUTY AUTHORITIES AND THE ONE SHOWN BY THE APPELLANT. 6.1 FACTS BEING IDENTICAL, WE FOLLO W THE ABOVE ORDER OF THE CO - ORDINATE BENCH AND DELETE THE PENALTY OF RS.2,24,361/ - LEVIED BY THE AO. 7. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/02/2019. SD/ - SD/ - ( SANDEEP GOSAIN ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 12/02/2019 RAHUL SHARMA, SR. P.S. 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 . BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI