Shri Harshad Mafatlal Prajapati, Ahmedabad V. The Income Tax Officer, Ward-3(1), Ahmedabad

ITA 2614/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1728 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 11-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Keywords: Capital asset; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: S H RI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER HARSHAD MAFATLAL PRAJAPATI, PROP. ANKIT BRICKS WORKS, F/10, ARBUDA FLATS, OPP. SABARMATI BUS STAND, AHMEDABAD - 380005 PAN: AAYPP0530A (APPELLANT) VS THE ITO WARD - 3(1), 1 ST FLOOR, PRATYAKSH KAR BHAVAN, PANJARA POLE, AMBAWAD I, AHMEDABAD (RESPONDENT) JAYANTILAL MAFATLAL PRAJAPATI, PROP. SHREE CHETHAR KRUPA BRICKS WORKS, F/10, ARBUDA FLATS, OPP. SABARMATI BUS STAND, AHMEDABAD - 380005 PAN: AAYPP0531B (APPEL LANT) VS THE ITO WARD - 3(1), 1 ST FLOOR, PRATYAKSH KAR BHAVAN, PANJARA POLE, AMBAWADI, AHMEDABAD (RESPONDENT) REVENUE BY : S H RI R.K. GUPTA , SR. D . R. ASSESSEE BY: S H RI S.N. DIVETIA , A.R. I T A NO . 2614 / A HD/20 15 A SSESSMENT YEAR 200 9 - 10 ITA NO. 2615 /AHD/20 15 ASSESSMENT YEAR 200 9 - 10 I.T.A NO S. 2614 & 2615 /AHD /2015 A.Y. 2009 - 10 PAGE NO HARSHAD MAFATLAL PRAJAPATI & JAYANTIBHAI M. PRAJAPATI VS. ITO 2 DATE OF HEARING : 05 - 04 - 2 016 DATE OF PRONOUNCEMENT : 02 - 0 5 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THESE TWO DIFFERENT ASSESSEES HAVE FILED THE INSTANT APPEALS FOR FOR A.Y. 2009 - 10 , AR ISE FROM ORDER OF THE CIT(A) - 10 , AHMEDABAD DA TED 7 - 08 - 2015 IN APPEAL NO. CIT(A) - 10/ITO.WD/3(1)/461 & 462/14 - 15 , IN PROCEEDINGS UNDER SECTION 271(1 ) (C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. A COMBINED PERUSAL OF BOTH THESE CASE FILE REVEALS THAT THES E ASSESSEE S CHALLENGE SECTION 271(1) (C) PENALTIES OF RS. 1,40,443/ - IN EACH CASE AS IMPOSED BY THE ASSESSING OFFICER AND CONFIRMED IN THE LOWER APPELLATE PROCEEDINGS. 3. RELEVANT FACTS INVOLVED IN THESE TWO APPEALS ARE IDENTICAL. THESE TWO ASSESSEES MA NUFACTURING BRICKS IN THE NAME AND STYLE OF M/S. S HREE CHAHA R KRUPA BRICK WORKS. THEY SOLD THEIR AGRICULTURAL LAND BLOCK NO. 1124 ON 01 - 12 - 2008 FOR A SALE CONSIDERATION OF RS. 89,03,000/ - INCLUDING A PAYMENT OF RS. 29, 16,000/ - MADE TO CONFIRMING PARTIES. THE SAME WOULD GIVE RISE TO LONG TERM CAPITAL GAINS. BOTH THESE ASSESSEES DECLARED THE SAME TO THE TUNE OF SHARE EACH. THE ASSESSING OFFICER FRAMED A REGULAR ASSESSMENT ON 17 AND 29 - 11 - 2011. HE THEREAFTER NOTICED THAT THESE TWO ASSESSEE S WERE OWNERS TO THE TUNE OF 1/3 SHARE EACH AS AGAINST SHARE I.T.A NO S. 2614 & 2615 /AHD /2015 A.Y. 2009 - 10 PAGE NO HARSHAD MAFATLAL PRAJAPATI & JAYANTIBHAI M. PRAJAPATI VS. ITO 3 DECLA R ED EARLIER RESULTING IN ESCAPEMENT OF ASSESSABLE INCOME TO TH E EXTENT THEREOF. HE ACCORDINGLY REOPENED THE ABOVE STATED REGULAR ASSESSMENT. THE ASSESSEES REITERATED THEIR INCOMES ALREADY RETURNED /ASS ESSED. THEY FILED THEIR COMPUTATION OF CAPITAL GAINS ADMITTING 1/3 SHARE IN SHARE CONSIDERATION , EXPENSES INCURRED ON THE CAPITAL ASSETS AND PLEADED FOR NON - INITIATION OF THE IMPUGNED PENALTY PROCEEDINGS. THE ASSESSING OFFICER FRAMED RE - ASSESSMENT ON 30 - 08 - 2013 ASSESSING THE DIFFERENTIAL SUM OF RS. 4,68,146/ - EACH AS LONG TERM CAPITAL GAINS. HE FURTHER INITIATED THE IMPUGNED PENALTY PROCEEDINGS. QUANTUM PROCEEDINGS SEEMS TO HAVE ATTAINED FINALITY AT THIS STAGE. 4. WE COME TO THE IMPUGNED PENALTY PROC EEDINGS. THE ASSESSING OFFICER IN PENA LTY ORDERS DATED 30 - 05 - 2012 QUOTED CHRONOLOGY OF EVENTS LEADING TO ABOVE STATED RE - ASSESSMENTS TO HOLD THAT IT WAS ONLY BECAUSE OF THE IMPUGNED REOPENING THAT THE ABOVE REFERRED LONG TERM CAPITAL GAINS COULD BE ASSES SED TO THE EXTEND 1/3 SHARE INSTEAD OF IN SCRUTINY PROCEEDINGS. HE ACCORDINGLY CONCLUDED THAT THIS ASSESSEE S ACT ATTRACTED SECTION 271(1)(C) DEFAULT LIABLE FOR IMPOSING THE IMPUGNED PENALTY OF RS. 1,40,443/ - IN QUESTION. THE CIT(A) UPHOLDS ASSESSING O FFICER S ACTION. 5. WE HAVE HEARD BOTH THE SIDES. LD. REPRESENTATIVES REITERATE THEIR RESPECTIVE STANDS AGAINST AND IN SUPPORT OF THE IMPINGED PENALTIES . THERE IS NO DISPUTE THAT BOTH THESE ASSESSEES HAD DECLARED THEIR RESPECTIVE CAPITAL GAINS CLAIMING 1/4 TH SHARE EACH IN THE I.T.A NO S. 2614 & 2615 /AHD /2015 A.Y. 2009 - 10 PAGE NO HARSHAD MAFATLAL PRAJAPATI & JAYANTIBHAI M. PRAJAPATI VS. ITO 4 RELEVANT CAPITAL ASSET SOLD AS AGAINST THEIR CORRECT SHARE OF 1/3 EACH. IT HAS ALSO COME ON RECORD THAT THE ASSESSING OFFICER ACCEPTED THE FORMER SHARE HOLDING IN A REGULAR ASSESSMENT. WE FIND FROM THE CASE FILE THAT THE ASSESSING OFFICER HIMSELF OBSERVES IN PENALTY ORDER THAT THE ASSESSEE S ACT IN UNDERSTATING THEIR SHARES FROM 1/3 TO FOR THE PURPOSE OF DECLARING RESPECTIVE CAPITAL GAINS IS ON ACCOUNT OF THEIR MISTAKE IN CONVERTING THE RELEVANT REVENUE RECORDS AND THEIR TAX CONSU LTANT HAD ALSO PLACED RELIANCE ON OLD DOCUMENTS OF REVENUE RECORD THEREBY IGNORING THE CORRECT STATUS OF LAND TITLE. THE REVENUE IS UNABLE TO DISPEL THIS FACTUAL POSITION . WE OBSERVE IN THESE PECULIAR FACTS AND CIRCUMSTANCES THAT THE IMPUGNED UNDER - STATE MENT OF ASSESSEE S SHARES IN THE CAPITAL ASSET SOLD/TRANSFERRED HAS ARISEN BECAUSE OF THE ABOVE STATED MISTAKE PLACING RELIANCE UPON OLD REVENUE RECORDS ONLY. WE ARE OF THE OPINION ONCE THE ASSESSING OFFICER HIMSELF GIVES THIS FINDING OF FACT, WE DO NOT S EE ANY REASON THESE ASSESSEES FOR HAVING CONCEALED AND FURNISHED INACCURATE PARTICULARS OF INCOME U/S. 271(1)(C) AS THE SAME FORMS A REASONABLE CAUSE FOR NOT IMPOSING THE IMPUGNED PENALTY. WE ACCORDINGLY DELETE BOTH THESE PENALTIES UNDER CHALLENGE AMOUNTI NG TO RS. 1,40,443 / - . 6. THESE TWO ASSESSEES SUCCEED IN THEIR RESPECTIVE APPEALS ORDER PR ONOUNCED IN THE OPEN C OURT ON 02 - 0 5 - 201 6 SD/ - SD/ - ( PRAMOD KUMAR ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIA L MEMBER AHMEDABAD : DATED 02 /0 5 /2016 I.T.A NO S. 2614 & 2615 /AHD /2015 A.Y. 2009 - 10 PAGE NO HARSHAD MAFATLAL PRAJAPATI & JAYANTIBHAI M. PRAJAPATI VS. ITO 5 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,