The DCIT, Circle-2(2), Baroda V. Smt. Uma Ramdas Gandhi, Baroda

ITA 2660/AHD/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67653 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 12-09-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 09-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JHANGID
• Keywords: Cost of acquisition; Valuation report; Assessment record
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 2660/AHD/2010 A.Y: 2006-07 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 2(2), BARODA VS SMT. UMA RAMDAS GANDHI, 4 TH FLOOR, R.K. CENTRE, FATHEGUNJ MAIN ROAD, BARODA PAN: ACIPG3854C (APPELLANT) (RESPONDENT) REVENUE BY : SHRI J. P. JHANGID, SR. D. R. ASSESSEE(S) BY : NONE DATE OF HEARING : 12/09/ 2013 DATE OF PRONOUNCEMENT : 16/09/2013 O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF LEARNED CIT(A)-V, BARODA, DATED 02.07.2010 AND THE ONLY ISSUE AS PER THE GROUNDS OF APPEAL IS DELETION OF PENALTY LEVIED U/S. 271(1)(C) OF IT ACT, FOR READY REFERENCE REPRODUCED BELOW: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY OF RS.2,80,500/- LEVI ED U/S.271(1)(C) OF THE ACT. THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FACT T HAT IF THE CASE HAD NOT BEEN PICKED UP FOR SCRUTINY AND IF THE ASSESSING OFFICER HAS NOT STARTED INVESTIGATION INTO THE ALLEGED LONG TERM CAPITAL GA IN (LTCG) TRANSACTION, PARTICULARLY WHEN THE ASSESSING OFFICER REQUIRED TH E ASSESSEE TO PRODUCE COPY OF SALE DEED OF CLAIMED LTCG PROPERTY AND TO PRODUC E COPY OF DOCUMENTS IN ORIGINAL WITH REGARD TO THE INVESTMENT MADE VIDE QU ESTIONNAIRE ISSUED ALONG WITH NOTICE U/S. 142(1) DATED 18.06.2008, THE ASSES SEE WOULD NEVER HAVE REVISED THE COMPUTATION OF LTCG, AS IT DID NOT COME FORWARD FOR TWO YEARS FROM THE DATE OF FILING THE RETURN OF INCOME FILED ON 31.07.2006. ITA NO.2660/AHD/2010 DCIT BARODA VS. SMT. UMA RAMDAS GANDHI A.Y. 2006-07 - 2 - 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S. 143(3), DATED 20 TH OF NOVEMBER, 2008 AND THE PENALTY ORDER U/S. 271(1)(C) DATED 26.5.2009 WERE THAT DURING THE COURSE OF PROCEEDINGS THE ASSESSEE HAD REVISED THE CAPITAL GAIN WHICH WAS DULY NOTED BY THE AO IN PARAGRAPH 5 OF THE IMPUGNED ASSESSMENT ORDER, RE PRODUCED BELOW: DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A SSESSEE VIDE SUBMISSION DATED 31.7.2008 STATED THAT WHILE COMPUTING THE LON G TERM CAPITAL GAIN ON SALE OF IMMOVABLE PROPERTY, THE ASSESSEE HAS INADVE RTENTLY CONSIDERED THE COST OF ACQUISITION OF THE SAID PROPERTY AT RS.2,76 ,500/- AS ON 01.04.1981 INSTEAD OF ONLY 20% OF THE SAID VALUE AS PER THE DE ED OF SETTLEMENT. THE ASSESSEE HAS ALSO SUBMITTED THE REVISED WORKING OF THE TAX AND PAID THE TAX OF RS.3,36,500/- ON 31.07.2007 AFTER RECTIFYING THE AB OVE MISTAKE. AS PER THE SAID WORKING SUBMITTED DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, THE ASSESSEE HAS ADDITIONALLY OFFERED AS UM OF RS.12,49 ,320/- BEING LONG TERM CAPITAL GAIN ON SALE OF IMMOVABLE PROPERTY. IN VIEW OF THE ABOVE, THE LONG TERM CAPITAL GAIN ON SALE OF IMMOVABLE PROPERTY IS TAKEN AT RS.34,24,960/- AS PER THE REVISED WORKING SUBMITTED DURING THE COU RSE OF ASSESSMENT PROCEEDINGS AS AGAINST RS.21,75,638/- SHOWN IN THE RETURN OF INCOME OF INCOME. PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE I T ACT HAS ALSO BEEN INITIATED SEPARATELY ON THIS POINT. 2.1 ACCORDINGLY, THE LONG TERM CAPITAL GAIN WAS ASS ESSED AT RS.21,75,638/-, HOWEVER, THE PENALTY PROCEEDINGS WE RE INITIATED BY THE AO. IN THE PENALTY ORDER THE STAND OF THE REVENUE I S THAT THE ASSESSEE HAD REVISED THE WORKING OF THE LONG TERM CAPITAL GAIN O NLY WHEN THE CASE WAS PICKED UP FOR THE SCRUTINY. THE REVISED COMPUTA TION WAS FURNISHED ONLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS. H OWEVER, IT HAS ALSO NOTED THAT THE REVISED DIFFERENCE OF TAX WAS PAID O N 30 TH OF JULY, 2007 BEFORE THE ISSUANCE OF NOTICE U/S. 143(2). ACCORDIN G TO THE AO, IT WAS NOT A MISTAKE COMMITTED THROUGH OVER SIGHT BUT THE ASSE SSEE HAD EVADED THE TAX. IT WAS CONCLUDED BY HIM THAT THE ASSESSEE HAS WILLFULLY FURNISHED THE INACCURATE PARTICULARS IN RESPECT OF THE LONG TERM CAPITAL GAIN. ACCORDINGLY, A PENALTY OF RS.2,80,500/- WAS IMPOSED . THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. ITA NO.2660/AHD/2010 DCIT BARODA VS. SMT. UMA RAMDAS GANDHI A.Y. 2006-07 - 3 - 3. BEFORE LEARNED CIT(A), THOSE FACTS WERE REITERAT ED AND AFTER CONSIDERING THE CIRCUMSTANCES OF THE CASE, LEARNED CIT(A) HAS GRANTED RELIEF IN THE FOLLOWING MANNER: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE SUBMISSIONS OF THE APPELLANT, ASSESSMENT ORDER AND THE PENALTY ORDER. THE ASSESSMENT RECORDS WERE ALSO CALLED FOR AND EXAMINED. THE SAID CASE WA S PICKED UP FOR SCRUTINY AND NOTICE U/S. 142(1) WAS ISSUED ON 18.06.2008 CAL LING FOR INTER ALIA THE COPY OF THE SALE DEED REGARDING LTCG AND ALSO THE ORIGIN AL COPY OF INVESTMENT MADE U/S. 54EC AT THE TIME OF HEARING ON 26.06.2008 . VIDE LETTER DATED 26.06.2008, THE APPELLANT SUBMITTED THE COPY OF DEE D OF SETTLEMENT AND ALSO THE ORIGINAL CERTIFICATE OF THE INVESTMENT U/S.54EC . THEREAFTER, ON 31.07.2008 A LETTER WAS FILED RE-COMPUTING THE LTCG AND ALSO M ENTIONING THAT THE ADDITIONAL TAX HAD ALSO BEEN DEPOSITED ALONG WITH T HE INTEREST. THERE IS NOTHING ON RECORD TO SUGGEST THAT THE AO HAD EXAMIN ED THE DEED OF SETTLEMENT AND HAD COME TO A CONCLUSION THAT THE COST OF ACQUI SITION WAS INCORRECTLY INDICATED. IN FACT THE VALUATION REPORT INDICATING THE COST OF ACQUISITION OF RS.2,76,700/- AS ON 01.04.1981 WAS FILED ON 07.08.2 008 AND THUS THE SUO MOTO RECTIFICATION OF COMPUTATION OF CAPITAL GAINS APPEA RS TO POINT TO BONAFIDE CONDUCT OF THE APPELLANT. THE PENALTY ON SUCH BONAF IDE MISTAKE IS NOT EXIGIBLE AND IS THUS DIRECTED TO BE DELETED. 4. ON THE DATE OF HEARING, NO ONE HAS APPEARED FROM THE SIDE OF THE RESPONDENT-ASSESSEE. HOWEVER, CONSIDERING THE TRIFL E IN NATURE OF THE DISPUTE, WE HAVE DECIDED TO PROCEED EX-PARTE QUA TH E ASSESSEE AFTER HEARING LEARNED DR WHO HAS PLACED RELIANCE ON THE P ENALTY ORDER. 5. AFTER HEARING THE SUBMISSIONS OF LEARNED DR AND CONSIDERING THE FACTS NARRATED IN THE ORDERS OF THE REVENUE DEPARTM ENT, WE ARE OF THE VIEW THAT LEARNED CIT(A) HAS RIGHTLY DELETED THE PE NALTY IN QUESTION. ONE OF THE IMPORTANT FACT AS BROUGHT TO OUR NOTICE WAS THAT THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE IT ACT WAS ISSUED ON 30 TH OF JULY, 2007. THE ASSESSEE HAS REVISED THE WORKIN G OF CAPITAL GAIN AND PAID THE DIFFERENCE OF THE TAX ON 21 ST OF JULY, 2007. THEREFORE, THE VEHEMENT CONTENTION OF THE ASSESSEE WAS THAT THE MI STAKE WAS RECTIFIED ITA NO.2660/AHD/2010 DCIT BARODA VS. SMT. UMA RAMDAS GANDHI A.Y. 2006-07 - 4 - SUO MOTU PRIOR TO THE DETECTION BY THE AO. THE ASSE SSEE HAD ACTED IN THE BONA FIDE MANNER AND THERE WAS NO MALA FIDE TO EVAD E THE TAX. THE ASSESSEE HAD CONSIDERED THE COST OF ACQUISITION OF THE PROPERTY AT RS.1,76,500/- AS ON 1.4.1981. THE ASSESSEE HAD ONLY 20% OF THE SAID VALUE AS PER THE SETTLEMENT DEED; HENCE, REVISED TH E WORKING AND ADOPTED THE COST OF ACQUISITION AT RS.55,340/- THE SAID DIS CLOSURE WAS MADE VOLUNTARILY BEFORE THE DETECTION BY THE REVENUE DEP ARTMENT. BEFORE LEARNED CIT(A), THE ASSESSEE HAS CITED A DECISION O F ITAT AHMEDABAD PRONOUNCED IN THE CASE OF R. VINEET & CO., 76 TTJ 6 73 (AHD.), WHEREIN IT WAS HELD THAT THE IMPUGNED ADDITION BEING OFFERE D VOLUNTARILY BY THE ASSESSEE AND THAT REVISED STATEMENT WAS ACCEPTED BY THE REVENUE DEPARTMENT AND THAT IT WAS A BONA FIDE MISTAKE ON A CCOUNT OF AN INADVERTENT ERROR, THEREFORE, THE LEVY OF PENALTY U /S. 271(1)(C) WAS NOT JUSTIFIED. RESPECTFULLY FOLLOWING THIS DECISION AND CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE HERE BY AFFIRMED THE VIEW TAKEN BY LEARNED CIT(A) AND DISMISS THIS GROUND OF THE REVENUE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. SD/- SD/- (A.K. GARODIA) (MUKUL KR. SHRAW AT) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 16 /09/2013 PRABHAT KR. KESARWANI, SR.P.S. TRUE COPY COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A)-III, AHMEDABAD ITA NO.2660/AHD/2010 DCIT BARODA VS. SMT. UMA RAMDAS GANDHI A.Y. 2006-07 - 5 - 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, (DY./ASSTT.REGISTRAR) ITAT, AHMEDABAD