DIPTI BARAI, MUMBAI V. ITO 1(3), THANE

ITA 280/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70815 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 07-08-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 11-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHEKHAR L GAJBHIYE
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C; 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL D DD D BENCH, BENCH, BENCH, BENCH, MUMBAI MUMBAI MUMBAI MUMBAI , . , . , ! ! ! ! '# '# '# '# BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM & & & & SHRI SHRI SHRI SHRI D. KARUNAKAR RAO D. KARUNAKAR RAO D. KARUNAKAR RAO D. KARUNAKAR RAO, AM , AM , AM , AM ./ I II I.T.A. NO. .T.A. NO. .T.A. NO. .T.A. NO. 280/MUM/2012 280/MUM/2012 280/MUM/2012 280/MUM/2012 ( $% $% $% $% & & & & / ASSESSMENT YEAR : 2005-06) SMT. DIPTI BARAI 16B-3, NEW SION CO-OP. HSG. SOCIETY, NEAR SINDI COLONY, OPP. SIES COLLEGE, SION(W) MUMBAI-400022 % % % % / VS. INCOME TAX OFFICER 1(3) LOWER GROUND FLOOR, VARDAN BLDG., MIDC, WAGLE ESTATE, THANE #' ! ./ ( ./ PAN/GIR NO. :ADSPB0185E ( ') / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( *+') / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) ') ') ') ') , , , , / APPELLANT BY : SHRI ASHOK SHARMA *+') *+') *+') *+') - -- - , , , , /RESPONDENT BY : SHRI SHEKHAR L. GAJBHIYE % % % % - -- - .! .! .! .! / DATE OF HEARING : 7 TH AUGUST 2013 /0& /0& /0& /0& - -- -.! .! .! .! /DATE OF PRONOUNCEMENT: 14 TH AUGUST 2013 ' 1 / O R D E R PER : , . . / VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 12.9.2011 ARISING FROM PENALTY ORDER PASSED U/S 271 (1)(C) FOR THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE HAS RAISED THE ONLY GROUND IN THIS APPEAL AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN CO NFIRMING THE PENALTY IMPOSED OF ` 2,10,613/- BY THE LD. A.O. U/S 271(1)(C) OF INCOME TAX ACT, 1961 WITHOUT APPRECIATING THE FACTS OF THE CASE. 3. WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND C ONSIDERED THE RELEVANT MATERIAL ON RECORD. IN THIS CASE THE AO RE CEIVED AIR INFORMATION 280/M/2012 DIPTI BARAI 2 REGARDING THE PURCHASE OF PROPERTY BY THE ASSESSEE ON 7.12.2004 AMOUNTING TO ` 70,00,000/- ACCORDINGLY, THE AO ISSU ED A NOTICE U/S 148 DATED 13.3.2008. IN RESPONSE TO THE NOTICE THE ASSE SSEE FILED RETURN OF INCOME DECLARING A TOTAL INCOME OF ` 92,734/- INCLU DING THE LONG TERM CAPITAL GAIN AMOUNTING TO ` 24,710/-. IT WAS POINT OUT BY THE ASSESSEE THAT THE TRANSACTION IN QUESTION IS NOT THE PURCHASE OF PROPERTY BUT IT WAS SALE OF THE PROPERTY. WHILE COMPLETING THE ASSESSMENT THE A SSESSING OFFICER HAS ADOPTED THE FULL VALUE OF CONSIDERATION BY APPLYING THE PROVISION OF SECTION 50C AND ACCORDINGLY MADE AN ADDITION BY COMPUTING T HE LONG TERM CAPITAL GAIN AT ` 9,25,536/-. THE AO HAS INITIATED THE PENA LTY PROCEEDINGS AND LEVIED A PENALTY OF ` 2,10,613/- BEING 100% OF THE AMOUNT OF TAX SOUGHT TO BE EVADED. ON APPEAL, THE CIT(A) HAS CONFIRMED THE LEVY OF PENALTY. 4. THE LD. AR OF THE ASSESSEE HAS CONTENDED THAT TH E PENALTY HAS BEEN LEVIED AGAINST THE ADDITION MADE BY THE AO BY INVOK ING OF THIS SECTION 50C THEREFORE THE SAME IS NOT SUSTAINABLE AS IT WAS NOT THE AMOUNT OF THE ASSESSEE HAS ACTUALLY RECEIVED. IN SUPPORT OF HIS C ONTENTION HE HAS RELIED UPON THE FOLLOWING DECISIONS: CIT KOL. VS MADAN THEATRES LTD. CALCUTTA HC 14.05.2013 RENU HINGORANI VS ACIT MUM. TRIBUNAL 22 .12.2010 V.H. GUPTA VS I.T.O MUM. TRIBUNAL 10.11 .2010 JAGDISH DASWANI MUM. TRIBUNAL 28.09.2 012 5. THE LD. DR HAS CONTENDED THAT IN THIS CASE THE A SSESSEE DID NOT FILE ANY RETURN OF INCOME AND THE INCOME DISCLOSED BY TH E ASSESSEE IS ONLY WHEN THE AO HAS ISSUED A NOTICE U/S 148 ON THE BASI S OF AIR INFORMATION. 280/M/2012 DIPTI BARAI 3 THEREFORE, THE DISCLOSER OF INCOME BY THE ASSESSEE IS NOT VOLUNTARILY BUT IN RESPONSE TO NOTICE U/S 148 HENCE, THE PENALTY IS JU STIFIED. 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CARE FULLY GONE THROUGH THE RELEVANT RECORD WE NOTE THAT THE ADDITION HAS B EEN MADE BY THE AO IN THE RETURN OF INCOME OF THE ASSESSEE ONLY BECAUSE O F THE ADOPTION OF FULL SALE CONSIDERATION AS PER THE DEEMING PROVISIONS OF SECTION 50C. IT IS PERTINENT TO NOTE THAT IF THE ADDITION MADE BY THE AO BY INVOKING THE PROVISION OF SECTION 50C OF THE ACT IS EXCLUDED THA N THE REMAINING INCOME DOES NOT FALL UNDER THE MINIMUM SLAB OF INCOME. THE REFORE TO THAT EXTENT IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEDED THE I NCOME. WE FURTHER NOTE THAT THIS TRIBUNAL HAS CONSIDERED AND DECIDED THIS ISSUE IN A SERIOUS OF DECISIONS AS RELIED UPON BY THE LD. AUTHORISED REPR ESENTATIVE. IN CASE OF RENU HINGORANI VS ACIT (SUPRA) AN IDENTICAL ISSUE H AS BEEN CONSIDERED AND DECIDED BY THE TRIBUNAL IN PARA 8 AS UNDER: 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RE LEVANT RECORD. WE FIND THAT THE AC HAD MADE ADDITION OF RS.9,00,82 4/- BEING DIFFERENCE BETWEEN THE SALE CONSIDERATION AS PER SA LE AGREEMENT AND THE VALUATION MADE BY THE STAMP VALUATION AUTHO RITY. THUS, THE ADDITION HAS BEEN MADE BY THE AD BY APPLYING THE PR OVISIONS OF SECTION 50C OF THE ACT. IT IS EVIDENT FROM THE ASSE SSMENT ORDER THAT THE AC HAS NOT QUESTIONED THE ACTUAL CONSIDERATION RECEIVED BY THE ASSESSEE BUT THE ADDITION IS MADE PURELY ON THE BAS IS OF DEEMING PROVISIONS OF THE INCOME TAX ACT, 1961. THE AO HAS NOT GIVEN ANY FINDING THAT THE ACTUAL SALE CONSIDERATION IS MORE THAN THE SALE CONSIDERATION ADMITTED AND MENTIONED IN THE SALE AG REEMENT. THUS IT DOES NOT AMOUNT TO CONCEALMENT OF INCOME OR FURN ISHING INACCURATE PARTICULARS OF INCOME. IT IS ALSO NOT TH E CASE OF THE REVENUE THAT THE ASSESSEE HAS FAILED TO FURNISH THE RELEVANT RECORD AS CALLED BY THE AO TO DISCLOSE THE PRIMARY FACTS. THE ASSESSEE HAS FURNISHED ALL THE RELEVANT FACTS, DOCUMENTS/MATERIA L INCLUDING THE SALE AGREEMENT AND THE AO HAS NOT DOUBTED THE GENUI NENESS AND VALIDITY OF THE DOCUMENTS PRODUCED BEFORE HIM AND T HE SALE CONSIDERATION RECEIVED BY THE ASSESSEE. UNDER THESE FACTS AND CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT 280/M/2012 DIPTI BARAI 4 FURNISHED CORRECT PARTICULARS OF INCOME. MERELY BEC AUSE THE ASSESSEE AGREED FOR ADDITION ON THE BASIS OF VALUAT ION MADE BY THE STAMP VALUATION AUTHORITY WOULD NOT BE A CONCLUSIVE PROOF THAT THE SALE CONSIDERATION AS PER THIS AGREEMENT WAS INCORR ECT AND WRONG. ACCORDINGLY THE ADDITION BECAUSE OF THE DEEMING PRO VISIONS DOES NOT IPSO FACTO ATTRACT THE PENALTY U/S 271(1)(C ). HENCE IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF CIT V/S RELIANCE PETROPRODUCTS PVT.LTD (SUPRA), THE PENALTY LEVIED U/S 271(1)( C ) IS NOT SUSTAINABLE. THE SAME IS DELETED . 7. FURTHER A SIMILAR VIEW HAS BEEN CONFIRMED BY THE HONBLE CALCUTTA HIGH COURT IN CASE OF CIT VS MADAN TEATRES LTD. (SU PRA) AS WELL AS IN THE OTHER DECISIONS RELIED UPON BY THE ASSESSEE. ACCORD INGLY IN VIEW OF THE DECISIONS OF THIS TRIBUNAL AS WELL AS HONBLE CALCU TTA HIGH COURT (SUPRA) WE DELETE THE PENALTY LEVIED U/S 271(1)(C). 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF AUGUST 2013 ' 1 - /0& ! 2 3'%4 14 TH 5#. 0 - 5 SD/- SD/- ( . ) ! '# (D. KARUNAKAR RAO) ACCOUNTANT MEMBER ( ) $ '# (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 14 TH AUGUST 2013 SUBODH COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI