ITO, Alwar V. SURENDRA SINGH, Alwar

ITA 254/JPR/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2074 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 03-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY MALIKJCIT
• Assessee Lawyers: J P KHURANA ITP DHK
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 143(3); 54B; 50C

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH DQY HKKJR ] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 254/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 INCOME TAX OFFICER, WARD 2(1), ALWAR. CUKE VS. SURENDRA SINGH, S/O- LATE SH. PRAHLAD SINGH, CHHAJU SINGH KI GALI, OUTSIDE MALAKHEDA GATE, ALWAR (RAJ.) LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: CXHPS 2840 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI AJAY MALIK(JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI J.P. KHURANA (ITP) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 12/05/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 17/05/2017 VKNS'K@ ORDER PER: KUL BHARAT, J.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 10/01/2017 PASSED BY THE LD. CIT(A), ALWAR FOR THE A. Y. 2010-11, WHEREIN THE REVENUE HAS TAKEN SOLE EFFECTIVE GROUND, WHICH IS AGAINST DELETING THE PENALTY OF RS. 18,58,115/- IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT). 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE CA SE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMEN T U/S 143(3) OF THE ITA 254/JP/2017_ ITO VS SURENDRA SINGH 2 ACT WAS PASSED ON 18/3/2013. WHILE FRAMING THE ASSES SMENT, THE ASSESSING OFFICER ALSO INITIATED PENALTY PROCEEDING S U/S 271(1)(C) OF THE ACT. SUBSEQUENTLY, THE ASSESSING OFFICER PROCEEDED TO LEVY THE PENALTY OF RS. 18,58,115/-. 3. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), WHO AFTER CO NSIDERING THE SUBMISSIONS, DELETED THE PENALTY. 4. NOW THE REVENUE IS IN APPEAL BEFORE THE ITAT. THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFF ICER. ON THE CONTRARY, THE LD AR OF THE ASSESSEE HAS REITERATED THE SUBMIS SIONS AS MADE IN THE WRITTEN SYNOPSIS. LD. COUNSEL CONTENDED THAT THE PEN ALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE INITIATED ONLY ON ADDITION OF RS. 5,61,595/- ON ACCOUNT OF DIFFERENCE IS SALE VALUE DLC RATE ADOPTE D AS REQUIRED U/S 50C OF THE ACT. HOWEVER, PENALTY OF RS. 18,58,115/- IMPO SED ON THE ENTIRE ADDITIONS MADE IN THE RETURN OF INCOME. ANOTHER ARG UMENT OF THE LD. COUNSEL OF THE ASSESSEE IS THAT THE APPEAL PREFERRE D IS NOT MAINTAINABLE ON ACCOUNT OF CBDT CIRCULAR NO. 21/2015 DATED 10/12/201 5. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE LD. CIT(A) HAS DELETED THE PENALTY BY OBSERVING AS UNDER:- ITA 254/JP/2017_ ITO VS SURENDRA SINGH 3 5.3.1. I HAVE GONE THROUGH THE PENALTY ORDER AS WE LL AS SUBMISSIONS MADE BY THE APPELLANT. FOLLOWING FACTS HAVE EMERGED. 1. THAT THE APPELLANT IS AN AGRICULTURIST AND DERIV ED INCOME FROM CAPITAL GAIN AND AGRICULTURE INCOME DURING THE YEAR UNDER CONSIDERATION. 2. THAT DURING ASSESSMENT PROCEEDINGS THE A.O HAS D ISALLOWED DEDUCTION CLAIMED UNDER SECTION 54B OF THE ACT. 3. THAT AFTER THE CONFIRMATION OF THE ADDITION U/S 54B OF THE ACT BY THE LD. CIT(A), THE A.O HAD LEVIED PENALTY OF RS. 1 8,58,115/- U/S 271(1)(C) OF THE ACT. 4. THAT HONBLE ITAT, JAIPUR BENCH VIDE ITS ORDER D ATED 04/04/2016 HAS ALLOWED THE DEDUCTION UNDER SECTION 54B OF THE ACT. 5. THAT THE A.O HAS GIVEN THE APPEAL EFFECT AND RED UCED THE TOTAL ASSESSED INCOME TO RS. 7,35,925/- AND AGRICULTURAL INCOME OF RS. 1,05,000/-. 5.3.2 I HAVE TAKEN NOTE OF THE FACT THE ASSESSEE HA D FILED RETURN U/S 139(4) OF THE ACT DECLARING AN INCOME OF RS. 1,68,330 AND AGRICULTURAL INCOME OF RS. 1,05,000/- ON 30/03/2012. LATER THE INCOME W AS ASSESSED AT RS. 95,65,930/- INCLUDING AGRICULTURAL INCOME OF RS. 1, 05,000/-. THE ADDITION WAS MADE MAINLY ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S 54B OF THE ACT AMOUNTING TO RS. 87,25,000/- AND ADDITION IN CAPITAL GAIN ON ACCOUNT OF APPLICATION OF SECTION 5 0C OF THE ACT AMOUNTING TO RS. 5,67,595/-. 5.3.3 THE PENALTY WAS LEVIED ON 2 AMOUNTS I.E. RS. 87,25,000/- DISALLOWED UNDER SECTION 54B OF THE ACT AND RS. 567,595/- UNDE R SECTION 50C OF THE ACT. HONBLE ITAT HAS GIVEN RELIEF BY ALLOWING DEDUCTION U/S 54B OF THE ACT. THE APPELLANT DID NOT PRESS FOR RELIEF ON THE ISSUE OF 50C OF THE ACT. AFTER APPEAL EFFECT THE ASSESSED INCOME IS RED UCED TO RS.7,35,925/-AND AGRICULTURAL INCOME OF RS. 1,05,00 0/-. THEREFORE, NOW, THE ONLY AMOUNT LEFT FOR CONSIDERATION FOR PEN ALTY U/S 271(1)(C) OF THE ACT IS THE DIFFERENCE IN THE CAPITAL GAIN ON ACCOUNT APPLICATION ITA 254/JP/2017_ ITO VS SURENDRA SINGH 4 SECTION 50C OF THE ACT WHICH THE APPELLANT DID NOT PRESS BEFORE THE HONBLE ITAT. SINCE APPLICATION OF SECTION 50C OF T HE ACT IS ONLY A DEEMING PROVISION FOR THE CALCULATION OF CAPITAL GA IN AND THE A.O HAS NOT BROUGHT ON RECORD ANY EVIDENCE WHETHER THE ASSE SSEE HAD ACTUALLY RECEIVED ANY SALE CONSIDERATION OVER AND ABOVE THE AMOUNT MENTIONED IN THE SALE DEED. THEREFORE, IN MY CONSID ERED VIEW THERE IS NO JUSTIFICATION TO LEVY PENALTY EVEN ON THIS AMOUN T OF RS. 5,67,595/-. THIS STAND IS FURTHER STRENGTHENED BY TAKING INTO A CCOUNT RATIO FROM THE APEX COURT JUDGMENT IN THE CASE OF RELIANCE PET ROPRODUCTS WHERE THE HON'BLE SUPREME COURT IN) HAS HELD THAT A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOU NT TO THE INACCURATE PARTICULARS. ACCORDINGLY, THE PENALTY OF RS. 18,58,115/- LEVIED U/S 271(1)(C) OF THE ACT IS DELETED. APPELLA NTS GROUND OF APPEAL IS ALLOWED. WE FIND THAT THE LD. CIT(A) HAS GIVEN A FINDING ON F ACT THAT THE PENALTY WAS LEVIED ON TWO AMOUNTS I.E. ON ACCOUNT OF DISALLOWANCE MADE U/S 54B OF THE ACT AND DIFFERENCES IN THE VALUE U/S 50C OF THE ACT. IT IS OBSERVED BY THE LD. CIT(A) THAT THE RELIEF U/S 54B OF THE ACT WAS GRANTED BY THE TRIBUNAL IN QUANTUM PROCEEDINGS. THIS FACT IS NOT CON TROVERTED BY THE REVENUE. THE REMAINING ADDITION ON WHICH THE PENALTY WAS LEVIED IS ON ACCOUNT OF DIFFERENCE BETWEEN THE DLC RATE AND THE S ALE CONSIDERATION REFLECTED INTO THE SALE DEED. SINCE THE CLAIM OF TH E ASSESSEE WITH REGARD TO THE SALE CONSIDERATION WAS NOT ACCEPTED BY THE STAMP VALUATION AUTHORITY AND ADOPTED THE SALE CONSIDERATION AS PER DLC RATE VALUE. UNDER THESE ITA 254/JP/2017_ ITO VS SURENDRA SINGH 5 FACTS AND CIRCUMSTANCES, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A), THE SAME IS HEREBY UPHELD. AS THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE TWO DIFFERENT AND DISTINCT P ROCEEDINGS. IN THE PRESENT CASE, THE SALE CONSIDERATION IS ADOPTED ON THE BASIS OF DLC RATE, FOR THE PURPOSE OF ESTIMATING THE FAIR MARKET VALUE . SUCH BASIS WOULD NOT BE SUFFICIENT FOR CONFIRMATION OF PENALTY. ADMITTED LY, THE ASSESSEE HAS NOT CONCEALED ANY MATERIAL PARTICULAR OF INCOME. THERE I S NO EVIDENCE ON RECORD SUGGESTING THAT IN FACT, THE ASSESSEE RECEIV ED THE SALE CONSIDERATION AS ADOPTED BY THE STAMP VALUATION AUTHORITY. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17/05/2017. SD/- SD/- HKKXPAN DQY HKKJR (BHAGCHAND) (KUL BHARAT) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 17 TH MAY, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ITO, WARD 2(1), ALWAR. 2. IZR;FKHZ @ THE RESPONDENT- SHRI SURENDRA SINGH, ALWAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 254/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR