Shri Kamlesh Bhailalbhai Patel, Anand V. The Dy.CIT, Intl. Taxn., Vadodara

ITA 247/AHD/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8349 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2012-2013
• Appeal Filed On: 01-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH SINGH HEARING CONCLUDE
• Keywords: Cost of acquisition; Fair market value

Judgement Text

ITA NO.247/AHD/2018 ASSESSMENT YEAR: 2012-13 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND MADHUMITA ROY JM] ITA NO.247/AHD/2018 ASSESSMENT YEAR: 2012-13 KAMLESHKUMAR BHAILALBHAI PATEL, ..................APPELLANT HARIDAS NI KHADAKI, MOTA ADADH, ANAND 380 001. [PAN : BLQPP 5766 A] VS. DY. COMMISSIONER OF INCOME TAX, (INTERNATIONAL TAXATION), BARODA. ............................RESPONDENT APPEARANCES BY MUKUND BAKSHI FOR THE APPELLANT SAURABH SINGH FOR THE RESPONDENT HEARING CONCLUDED ON: 11.05.2018 ORDER PRONOUNCED ON : 16.05.2018 O R D E R PER PRAMOD KUMAR, AM: 1. BY WAY OF THIS APPEAL THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF LEARNED CIT(A)S ORDER DATED 18 TH DECEMBER, 2017, UPHOLDING PENALTY OF RS.9,49,420/- IMPOSED ON THE ASSESSEE UNDER SECTION 271(1) (C) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2012-2013. 2. THE QUANTUM DISALLOWANCES, IN RESPECT OF WHICH I MPUGNED PENALTY IS LEVIED, ARE TWO FOLD FIRST, WITH RESPECT TO DISALLOWANCE OF D EDUCTION OF RS.44,30,600/- UNDER SECTION 54EC; AND SECOND, WITH RESPECT TO DECREAS E IN INDEXED FAIR MARKET VALUE OF THE ASSET BY RS.1,78,157/-. LET US DEAL WITH THE S TATUS AND NATURE OF THESE TWO QUANTUM ADDITIONS. ITA NO.247/AHD/2018 ASSESSMENT YEAR: 2012-13 PAGE 2 OF 3 3. AS REGARDS THE DISALLOWANCE OF DEDUCTION UNDER S ECTION 54EC, WE HAVE NOTED THAT, VIDE ORDER DATED 22.12.2017, A CO-ORDINATE BE NCH HAS DELETED THE QUANTUM OF DISALLOWANCE BY RS.42,00,000/-. AS REGARDS THE BAL ANCE AMOUNT OF RS.2,30,660/- IT IS CONTENTION OF THE ASSESSEE THAT THE ASSESSEE WAS WE LL WITHIN TIME FOR MAKING THE INVESTMENT AND HE DECLARED ALL THESE DETAILS AT THE POINT OF TIME OF FILING THE INCOME TAX RETURN. THERE WAS THUS NO CONCEALMENT OF PARTICULAR S OR FURNISHING OF INACCURATE PARTICULARS. A SUBSEQUENT INACTION OR MARGINAL REDU CTION IN QUANTUM OF DEPOSIT UNDER SECTION 54EC QUALIFYING INVESTMENT, CANNOT, THEREFO RE, BE REASON ENOUGH TO HOLD THE ASSESSEE GUILTY OF CONCEALMENT OF INCOME OR FURNISH ING OF INACCURATE PARTICULARS. THIS PLEA OF THE ASSESSEE HAS NOT FOUND FAVOUR WITH ANY OF THE AUTHORITIES BELOW. 4. AS REGARDS THE DECREASE IN INDEXED COST OF ACQUI SITION AS ON 01.04.1981, IT IS ON ACCOUNT OF THE FACT THAT THE DEPARTMENTAL VALUATION OFFICER HAS ADOPTED THE AREA OF 3,996 SQ. METERS ON THE DATE OF SALE WHEREAS, THE T OTAL AREA, FOR WHICH SUCH CONSIDERATION WAS TAKEN INTO ACCOUNT, WAS 3,946 SQ. METER. THE REDUCTION IN AREA WAS ON ACCOUNT OF ADJUSTMENT DUE TO TOWN PLANNING SCHEM E. THE VALUE ADOPTED AS ON 01.04.1981 WAS, HOWEVER, ONLY FOR 2,966 METERS --- SO FAR AS COMPUTATION OF CAPITAL GAINS WAS CONCERNED. THE AUTHORITIES BELOW REJECTED THE PLEA OF THE ASSESSEE THAT COST OF ACQUISITION OF ENTIRE 3,946 SQ. METERS IS TO BE TAKEN INTO ACCOUNT FOR THE SALE OF 2,996 SQ. METERS LAND. NOT ONLY THE ADJUSTMENT WAS, ACCO RDINGLY, MADE TO FAIR MARKET VALUE OF LAND AS ON 01.04.1981, THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS ALSO IMPOSED FOR THE SAME BY THE ASSESSING OFFICER. THE LEARNED CIT(A) HAS CONFIRMED THE SAID PENALTY AND THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE AP PLICABLE LEGAL POSITION. 6. WE FIND THAT THE REASONABLE EXPLANATION FOR BOTH THE ABOVE QUANTUM ADDITIONS WHICH, IRRESPECTIVE OF THE FACT THAT THESE HAVE NOT BEEN ACCEPTED IN THE ASSESSMENT PROCEEDINGS, ARE WORTH BEING ACCEPTED IN THE PRESEN T PENALTY PROCEEDINGS. A SUBSEQUENT MARGINAL REDUCTION IN QUALIFYING DEPOSIT S UNDER SECTION 54EC, AS LEARNED COUNSEL RIGHTLY PLEADS, CANNOT BE TREATED AS CONCEA LMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. AS REGARDS THE EXPLANATION THAT WHEN REDUCTION IN AREA IS DUE TO SUBSEQUENT CHANGE IN SITUATION, THE ENTIRE COST OF THE PLOT IS TO BE TAKEN INTO ACCOUNT, WE SEE PRIMA FACIE MERITS IN PRINCIPLE. IN THE LIG HT OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE AND THE FACT THAT AN O VERWHELMING PART OF THE DISALLOWANCE ITA NO.247/AHD/2018 ASSESSMENT YEAR: 2012-13 PAGE 3 OF 3 HAS ALREADY BEEN DELETED BY THE CO-ORDINATE BENCH I N QUANTUM PROCEEDINGS, WE UPHOLD THE PLEA OF THE ASSESSEE AND DELETE THE IMPUGNED PE NALTY. 7. IN THE RESULT, APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF MAY, 2018. SD/- SD/- MADHUMITA ROY PRAMOD KUMAR JUDICIAL MEMBER) (ACCOUNTANT MEMB ER) DATED: 16 TH MAY, 2018. PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDE NT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD