Shri Ghanshyamsinh D. Aswar, Baroda V. The Income Tax Officer, Ward-2(4), Baroda

ITA 2756/AHD/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5883 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-04-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 26-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANITA SURESH HARDASANI
• Keywords: Cost of acquisition

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD .., , BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.2756/AHD/2013 ( / ASSESSMENT YEAR : 2008-09) SHRI GHANSHYAMSINH D.ASWAR A-1/1, KASHIVISHWESHWAR TOWNSHIP KHUSHBU CORNER JETALPUR ROAD, BARODA-390007 / VS. THE ITO WARD-2(4) BARODA $ ./ ./ PAN/GIR NO. : ABJPA 6577 E ( $' / APPELLANT ) .. ( ($' / RESPONDENT ) $') / APPELLANT BY : SHRI MUKUND BAKSHI, AR ($'*) / RESPONDENT BY : SMT. ANITA SURESH HARDASANI, SR.DR +,*- / DATE OF HEARING 26/04/2017 ./0*- / DATE OF PRONOUNCEMENT 17/ 05/2017 / O R D E R PER PRADIP KUMAR KEDIA, AM: THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-II, BARO DA [CIT(A) IN SHORT] DATED 26/07/2013 FOR THE ASSESSMENT YEAR (AY) 2008-09. ITA NO.2756/AHD /2013 SHRI GHANSHYAMSINH D.ASWAR VS. ITO ASST.YEAR 2008-09 - 2 - 2. IN THIS CASE, THE ASSESSEE INTER ALIA DECLARED SHORT TERM CAPITAL GAINS (STCGS) OF RS.1,03,750/- IN THE RETURN OF INC OME. IN THE COURSE OF THE SCRUTINY ASSESSMENT, THE ASSESSING OFFICER (AO) FOUND MISMATCH FOR THE SALE CONSIDERATION AMOUNT. WHILE THE ASSESSEE HAD DECLARED SALE CONSIDERATION OF LAND AT RS.5,02,500/- GIVING RISE TO THE CAPITAL GAIN OF RS.1,03,750/-, THE SALE CONSIDERATION AS PER THE SA LE-DEED EXECUTED BY THE ASSESSEE AS WELL AS BY THE COPY OF INDEX FILED BY T HE ASSESSEE THE SALE CONSIDERATION AMOUNTED TO RS.6,32,500/-. IN THESE CIRCUMSTANCES, THE AO ALLEGED THAT THE ASSESSEE HAS DECLARED LESS AMOUNT OF SALE CONSIDERATION WITH AN INTENTION TO REDUCE THE TAX AND TO DEFRAUD THE REVENUE. HE ACCORDINGLY IMPOSED PENALTY OF RS.40,170/- (WORKED OUT AT MINIMUM 100% OF THE TAX SOUGHT TO BE EVADED) ON THE ALLEGED UNDERREPORTING OF CAPITAL GAIN AT RS.1,03,750/-. 3. IT IS A CASE OF THE ASSESSEE THAT THE ERROR O CCURRED DUE TO INADVERTENCE AS EXPENSE OF RS.1,30,000/- HAS BEEN WRONGLY CLAIME D TWICE BY MISTAKE WHICH HAS RESULTED IN UNDERREPORTING OF CAPITAL GAI NS. IT IS A CASE OF THE ASSESSEE THAT SUCH INADVERTENT ERROR IS REQUIRED TO BE SEEN WITH COMPASSION AND PENALTY REQUIRES TO BE DELETED. IN SHORT, THE ASSESSEE PLEADS INADVERTENT ERROR IN COMPUTING THE CAPITAL G AIN GIVING RISE TO THE LEVY OF PENALTY. ITA NO.2756/AHD /2013 SHRI GHANSHYAMSINH D.ASWAR VS. ITO ASST.YEAR 2008-09 - 3 - 4. ARGUABLY, THE PLEA OF THE ASSESSEE THAT INAD VERTENT ERROR DESERVES SYMPATHETIC CONSIDERATIONS IN PENALTY PROCEEDINGS I S SOMEWHAT IN ACCORD WITH A LONG LINE OF JUDICIAL PRECEDENTS. HOWEVER, AT THE SAME TIME, IT IS FOR THE ASSESSEE TO ATLEAST BROADLY SHOW THE CASE OF INADVERTENT ERROR. IN THE COMPUTATION OF CAPITAL GAIN, WE FIND THAT ONLY TWO ENTRIES, ONE TOWARDS SALE CONSIDERATION AND OTHER TOWARDS COST O F ACQUISITION (RS.3,98,750/-) IS INVOLVED THE VARIANCE WAS FOUND IN THE SALE CONSIDERATION. WE OBSERVE FROM THE DETAILS OF LAND ACQUISITION AS PER LEDGER FOR THE FINANCIAL YEAR 2006-07 WHERE THE CAS H PAYMENT OF RS.1,30,000/- WAS INTER ALIA CLAIMED TO HAVE BEEN PAID AGAINST THE TOTAL COST OF ACQUISITION OF RS.3,98,750/-. HOWEVER, NOT HING TURNS ON THIS FACT AS WE FAIL TO UNDERSTAND AS TO HOW THIS WILL IMPACT THE SALE CONSIDERATION IN THE SUBSEQUENT YEAR. THE UNDERREPORTING IS IN SALE CONSIDERATION WHEREAS THE PURPORTED TRANSACTION OF RS.1,30,000/- FORMS PART OF PURCHASE TRANSACTION EARLIER YEAR. THUS, WE FAIL T O SEE ANY MERIT IN THE CASE OF THE ASSESSEE. 5. WE ALSO NOTICE THAT PENALTY HAS ALSO BEEN IMPO SED ON ADDITION OF RS.45,838/- ON ACCOUNT OF AGRICULTURAL EXPENSE ESTI MATED AT 40% OF INCOME ARISING FROM UNEXPLAINED SOURCE UNDER S.69C OF THE ACT. WE FIND THAT THE ADDITION ITSELF IS ON ACCOUNT OF CERT AIN SUBJECTIVE CONSIDERATIONS OF THE REVENUE. SUCH SUBJECTIVE ACT ION OF THIS NATURE DOES NOT DESERVE ACTION UNDER S.271(1)(C) OF THE ACT. T HEREFORE, WHILE WE ITA NO.2756/AHD /2013 SHRI GHANSHYAMSINH D.ASWAR VS. ITO ASST.YEAR 2008-09 - 4 - DECLINE TO INTERFERE WITH THE IMPOSITION OF PENALTY ON THE QUANTUM ADDITION OF RS.1,30,000/-, WE DIRECT THE AO DELETE PENALTY ON ANOTHER ADDITION OF R.45,838/-. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 17/ 05/2017 SD/- SD/- (..) ( ) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 17/ 05 /2017 4..+,.+../ T.C. NAIR, SR. PS !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 567- 8- / CONCERNED CIT 4. 8- ( ) / THE CIT(A)-II, BARODA 5. 9:-+67 , 670 , 5 / DR, ITAT, AHMEDABAD 6. <, / GUARD FILE. / BY ORDER, (9-- //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD