The Income-tax Officer, Jalandhar V. Sh. Gurdip Singh Sandhu, Jalandhar

ITA 292/ASR/2013

• Counselvise Citation: 29220914 RSA 2013
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 03-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Assessee Lawyers: RAVISH SOOD
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Difference of opinion
• Section: 50C; 142(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 292(ASR)/2013 ASSESSMENT YEAR: 2006-07 PAN: ACMPS7215D INCOME TAX OFFICER, VS. SH. GURDIP SINGH S IDHU WARD NO.III(4), JALANDHAR 17, WARYAM NAGAR, JALAN DHAR (APPELLANT) (RESPONDENT) DEPARTMENT BY: SH. AMRIK CHAND, DR ASSESSEE BY: SH. RAVISH SOOD, ADVOCATE DATE OF HEARING: 07.08.2013 DATE OF PRONOUNCEMENT:12.08.2013 ORDER PER BENCH 1) THE REVENUE HAS FILED THE PRESENT APPEAL A GAINST THE IMPUGNED ORDER DATED 08.02.2013 PASSED BY LEARNED CIT(A), JA LANDHAR, PERTAINING TO THE ASSESSMENT YEAR 2006-07 ON THE FOLLOWING GRO UNDS: I. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN DE LETING PENALTY U/S 271(1)(C) AMOUNTING TO RS. 8,76,269/- RELYING U PON THE ORDER OF HON'BLE I.T.A.T., AMRITSAR BENCH, AMRITSAR IN I.T.A . NO. 464(ASR)/2010 AND C.O. NO. 34(ASR)/2010 DATED 30.09 .2012 WHEREAS THE DEPARTMENT HAS FILED APPEAL AGAINST THE ORDER D ATED 30.09.2012 2 I.T.A. NO. 292(ASR)/2013 ASSESSMENT YEAR: 2006-07 BEFORE THE HON'BLE PUNJAB & HARYANA HIGH COURT IN Q UANTUM ADDITION, IN THE DECISION OF WHICH IS STILL PENDING FOR ADJUDICATION. II. IT IS PRAYED THAT THE ORDER OF THE LEARNED COMMISSI ONER OF INCOME TAX(APPEALS) BE SET-ASIDE AND THAT ON THE ASSESSING OFFICER BE RESTORED. III. THE APPELLANT REQUESTS FOR LEAVE TO ADD OR AMEND OR ALTER THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED O F. 2) THE BRIEF FACTS RELATING TO THE ISSUE IN DISPUTE ARE THAT THE ASSESSEE FILED HIS ORIGINAL RETURN OF INCOME ON 07. 11.2006 DECLARING TOTAL INCOME OF RS. 14,75,180/- WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME-TAX ACT, 1961(IN SHORT THE ACT) ON 24. 05.2007. THE RETURN WAS FILED ALONG WITH SALE AGREEMENTS OF THE LAND (S ITUATED IN VILLAGE CHAK HUSSINA), ON WHICH LONG TERM CAPITAL GAIN WAS DECLA RED IN THE RETURN OF INCOME. SUBSEQUENTLY, IT WAS NOTICED THAT THE COLLE CTOR, JALANDHAR, HAD VALUED THE PROPERTY IN THE AREA VILLAGE CHAK HUSSAI NA LAMA PIND, TEH. & DISTT. JALANDHAR @ RS. 25 LACS PER ACRE FOR THE PUR POSE OF PAYMENT OF STAMP DUTY. THE SALE CONSIDERATION OF THE LAND I.E. 9 ACRES 1 KANAL 13 MARLAS, SOLD BY THE ASSESSEE, AS PER COLLECTORS RA TE @ RS. 25 LACS PER ACRE WORKED OUT AT RS. 2,30,15,625/- AS AGAINST RS. 83,07,949/- DECLARED IN THE RETURN OF INCOME. BESIDES, THE ASSESSEE WAS ALSO FOUND TO HAVE RECEIVED ANOTHER AMOUNT OF RS. 15,25,000/- ON ACCOU NT OF SALE OF MITTI AND IT WAS NOT ACCOUNTED FOR WHILE CALCULATING THE CAPITAL GAIN. AS SUCH, THE ASSESSING OFFICER PROCEEDED TO INITIATE RE-ASSE SSMENT PROCEEDINGS 3 I.T.A. NO. 292(ASR)/2013 ASSESSMENT YEAR: 2006-07 AFTER RECORDING REASONS FOR THE SAME. SUBSEQUENTLY, NOTICE U/S 148 OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ASSESSEE, HOWEV ER, DID NOT FILE THE RETURN OF INCOME IN RESPONSE TO THE NOTICE ISSUED U NDER SECTION 148 OF THE ACT. THEREAFTER, A NOTICE UNDER SECTION 142(1) OF T HE ACT WAS ISSUED AND IN RESPONSE TO THE SAME, THE ASSESSEE FILED LETTER DATED 30.11.2009 STATING THEREIN THAT THE RETURN FILED ON 07.11.2006 MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. AGAIN NOTICES UNDER SECTIONS 142(1) AND 143(1) OF THE ACT ALONGWITH A L ETTER WERE ISSUED TO THE ASSESSEE ON 04.12.2009 IN WHICH CERTAIN INFORMA TION WITH REGARD TO THE PURCHASE AND SALE OF THE LAND IN QUESTION WAS C ALLED FOR AND THE ASSESSEE WAS REQUIRED TO EXPLAIN AS TO WHY THE SALE VALUE OF THE SAID LAND SHOULD NOT BE ADOPTED BY APPLYING THE RATE OF RS. 2 5,00,000/- PER ACRE FIXED BY THE COLLECTOR AS PER THE PROVISIONS OF SEC TION 50C OF THE ACT FOR CALCULATING THE LONG TERM CAPITAL GAIN. IT WAS ALSO MENTIONED IN THE AFORESAID LETTER THAT IT IS PROPOSED TO WORK OUT TH E AVERAGE FAIR MARKET VALUE OF THE LAND BY TAKING INTO CONSIDERATION THE SALES RELATING TO INTQAL NOS. 6507, 6508 AND 65628. IN RESPONSE TO THE SAME, THE ASSESSEE FILED A LETTER WHEREIN HE HAS STATED THAT HE SOLD AGRICULTU RAL LAND MEASURING 36 KANAL 8 MARLA VIDE AGREEMENT DATED 02.12.2005 FOR S ALE CONSIDERATION OF RS. 36,40,000/- AND 37 KANAL 5 MARLA @ RS. 6,75,00 0/- PER ACRE (FOR A 4 I.T.A. NO. 292(ASR)/2013 ASSESSMENT YEAR: 2006-07 TOTAL SALE CONSIDERATION OF RS. 31,42,968/-) VIDE A GREEMENT DATED 19.04.2005 AND FURTHER WAS IN RECEIPT OF AMOUNT AG GREGATING TO RS.15,25,000/- IN RESPECT OF THE SALE PROCEEDS OF M ITTI AND THE AFORESAID LANDS WERE INHERITED BY HIM AS PER WILL DATED 10. 08.1980 OF HIS FATHER LATER SHRI GURKIRPAL SINGH. IT WAS FURTHER STATED B Y THE ASSESSEE THAT THE SALE TRANSACTIONS PURSUANT TO WHICH CAPITAL GAINS H AD ARISEN IN THE HANDS OF THE ASSESSEE WERE THE TRANSFER TRANSACTIONS EX ECUTED VIDE SALE AGREEMENTS AND NOT ANY SALE DEEDS AND THAT THE D EEMING PROVISIONS OF SECTION 50C OF THE ACT ARE APPLICABLE ONLY WHERE TH E TRANSFER OF THE PROPERTY HAD BEEN CARRIED OUT VIDE REGISTERED SALE AND NOT IN A CASE WHERE THE SAME IS PURSUANT TO SALE AGREEMENT. CON SEQUENTLY, THE ASSESSING OFFICER MADE AN ADDITION OF RS. 1,32,437/ - BEING INTEREST CREDITED TO THE SAVING ACCOUNT NO. 15725 WITH PUNJA B & SIND BANK, MODEL TOWN, JALANDHAR, WHICH WAS NOT REFLECTED IN T HE RETURN OF INCOME FILED. THE ASSESSING OFFICER, THEREFORE, INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT FOR THE DEFAULT OF FURNISHING INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. THE ASSESSEE AGGRIEVED BY THE ASSESSMENT ORDER WENT IN APPEAL BEFORE THE LEARNED CIT(A), WHO UPHELD THE ORDER OF THE ASSESSING OFFICER WITH REGARD TO T HE VALUE OF LAND ADOPTED BY THE ASSESSING OFFICER AT RS. 1 LAC. AT L AST, THE INCOME-TAX 5 I.T.A. NO. 292(ASR)/2013 ASSESSMENT YEAR: 2006-07 OFFICER, III(4), JALANDHAR, FOR THE REASONS DISCUSS ED IN THE PENALTY ORDER, IMPOSED A PENALTY OF RS. 9,16,000/- @ 100% OF THE T AX SOUGHT TO BE EVADED VIDE ORDER DATED 28.03.2012 PASSED UNDER SEC TION 271(1)(C) OF THE ACT. 3) AGGRIEVED BY THE ORDER OF INCOME-TAX OFFICER, III (4), JALANDHAR, DATED 28/03/2012, THE ASSESSEE FILED AN APPEAL BEFO RE LEARNED CIT(A), JALANDHAR, WHO VIDE IMPUGNED ORDER DATED 08.02.2013 PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. NOW, THE REVENUE BEING AGGR IEVED WITH THE ORDER OF LEARNED CIT(A), JALANDHAR, FILED THE PRESENT APP EAL. 4) AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE SH. RAVISH SOOD, ADVOCATE, STATED THAT THE QUANTUM ON W HICH THE PENALTY HAS BEEN INITIATED HAS ALREADY BEEN DELETED BY I.T.A.T. , AMRITSAR BENCH VIDE ORDER DATED 03.09.2012 PASSED IN I.T.A. NO. 464(ASR )/2000 & C.O. NO. 34(ASR)/2010 AND THE REVENUE AUTHORITY HAS LEVIED T HE PENALTY ON THE SAME ADDITION WHICH IS NOT SUSTAINABLE IN THE EYE O F LAW. HE STATED THAT THE LEARNED FIRST APPELLATE AUTHORITY HAS RIGHTLY D ELETED THE PENALTY IN DISPUTE AND REQUESTED THAT THE APPEAL FILED BY THE REVENUE MAY BE DISMISSED. 6 I.T.A. NO. 292(ASR)/2013 ASSESSMENT YEAR: 2006-07 5) LEARNED DR. RELIED UPON THE PENALTY ORDER DATED 28.03.2012 PASSED BY INCOME-TAX OFFICER, III(4), JALANDHAR UND ER SECTION 271(1)(C) OF THE ACT. 6) WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDER PASSED BY T HE LEARNED FIRST APPELLATE AUTHORITY. WE ARE OF THE VIEW THAT THE L EARNED FIRST APPELLATE AUTHORITY PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY CONFIRMING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN RESPE CT OF THE ADDITION OF RS. 1,32,437/-. THIS ADDITION HAS BEEN SUSTAINED BY THIS BENCH VIDE ORDER DATED 3 RD SEPTEMBER, 2012 PASSED IN I.T.A. NOS. 464(ASR)/200 0 AND C.O. NO. 34(ASR)/2010. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PORTION OF THE IMPUGNED ORDER DATED 08.02.2013 I.E. PARAS 5, 6 & 7 (PAGES 3 TO 5) PASSED BY LEARNED CIT(A), JALANDHAR, ARE REPRODUCED AS BELOW: 6. I HAVE CAREFULLY CONSIDERED THE ISSUE AT HAND. IN V IEW OF THE ORDER OF HON'BLE I.T.A.T., AMRITSAR, THERE IS NO AMOUNT O N ACCOUNT OF CAPITAL GAINS, WHICH NOW REMAINS TO BE TAXED, ON WH ICH ANY PENALTY COULD BE LEVIED. THE RELEVANT PART OF THE D ECISION OF HON'BLE I.T.A.T. IN CASE OF ASSESSEE: 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) THAT SECTION 50C, AS IT STOOD PRIOR TO 1.10.2009, C OULD NOT BRING WITHIN ITS AMBIT CASES OF TRANSFER OF LAND OR BUILD ING WHERE THE TRANSACTION WAS NOT REGISTERED WITH THE STAMP DUTY VALUATION AUTHORITY. CAPITAL GAINS ARISES ON THE TRANSFER OF A CAPITAL ASSET 7 I.T.A. NO. 292(ASR)/2013 ASSESSMENT YEAR: 2006-07 AND THE EFFECTIVE DATE FOR COMPUTING THE CAPITAL GA IN IS THE DATE OF TRANSFER OF CAPITAL ASSET., WHICH ARISES ON THE DATE OF TRANSFER ITSELF. THEREFORE, THE A.O. WAS NOT JUSTIFI ED IN ADOPTING THE VALUE ASSESSED BY THE STAMP VALUATION OFFICER A ND THE PROVISIONS OF SECTION 50C CANNOT BE ATTRACTED. AS P ER CIRCULAR NO.5 OF 2010, DATED 3.6.2010, IT IS CLEARLY MENTION ED THAT SCOPE OF THE PROVISIONS DOES NOT INCLUDE TRANSACTIONS WHI CH ARE NOT REGISTERED WITH STAMP DUTY VALUATION AUTHORITY, AND EXECUTED THROUGH AGREEMENT TO SELL OR POWER OF ATTORNEY. THE AMENDMENTS HAVE BEEN MADE APPLICABLE W.E.F. 01.10.2 009 AND WILL ACCORDINGLY APPLY IN RELATION TO TRANSACTIONS UNDERTAKEN ON OR AFTER SUCH DATE. THEREFORE, IN FACTS AND CIRCUM STANCES OF THE CASE, WE UPHOLD THE ORDER OF THE LD. CIT(A). ACCORD INGLY, ALL THE GROUNDS OF THE REVENUE ARE DISMISSED. 6. NOW, WE TAKE UP C.O. NO.34(ASR)/2010 FOR THE ASSESSMENT YEAR 2006-07 OF THE ASSESSEE. GROUNDS N O.1 & 3 OF THE C.O. OF THE ASSESSEE HAVE NOT BEEN PRESSED BY T HE LD. COUNSEL FOR THE ASSESSEE AND THE SAME ARE DISMISSED BEING NOT PRESSED. 7. AS REGARDS GROUND NO.2, THE BRIEF FACTS ARE THAT THE VALUE OF LAND AS ON 1.4.1981 WAS CLAIMED TO BE THE AVERAG E OF SIX PIECES OF LAND AS PER RECORDS OF TEHSILDARS OFFICE , WHEREAS THE AO HAD ADOPTED THE VALUE OF ONLY THREE PIECES OF LA ND AND ESTIMATED THE SAME AT RS.1,00,000/- PER ACRE AND CO MPUTED THE LONG TERM CAPITAL GAIN. 8. THE LD. CIT(A), CONFIRMED THE ACTION OF THE ASSE SSING OFFICER. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. IT WAS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE MR. RAVISH SOOD, ADVOCATE THAT THERE ARE MANY PROPERTIES, WHICH HAVE BEEN SOLD CLOSE TO THE DATE OF 1.4.1981 AND IT IS ONLY SIX PIECES OF LAND, WHICH HAS BEEN Q UOTED BY THE TEHSILDARS OFFICE AND AVERAGE OF THE SAME HAS BEEN SUBMITTED, WHICH IS A MATTER OF RECORD BEFORE BOTH THE AUTHORI TIES BELOW. 8 I.T.A. NO. 292(ASR)/2013 ASSESSMENT YEAR: 2006-07 THEREFORE, NO ESTIMATION CAN BE MADE BY THE AO AT W HIMS AND FANCIES BY ACCEPTING A PART DOCUMENT SUBMITTED BY T EHSILDARS OFFICE. THE ARGUMENT OF THE LD. COUNSEL APPEARS TO BE CONVINCING. IN THE ABSENCE OF ANY MATERIAL ON RECOR D BY THE A.O. AND THAT BY IGNORING THE MATERIAL PLACED BY T HE ASSESSEE FROM THE RECORD OF TEHSILDAR OFFICE, NO ESTIMATION CAN BE MADE TO VALUE THE LAND ON 1.4.1981 AT HIS WHIMS AND FANC IES. THE AO CANNOT ACCEPT A PART DOCUMENT AND REJECT THE REST OF DOCUMENT. EITHER THE SAME HAS TO BE REJECTED OR ACCE PTED IN TOTO. THEREFORE, THE VALUATION OF LAND CLAIMED BY THE ASSESSEE ON 1.4.1981 AS PER RECORD OF THE TEHSILDAR OFFICE I S THE CORRECT VALUE FOR CLAIMING LONG TERM CAPITAL GAINS. THE AO IS DIRECTED TO ADOPT THE SAME AND COMPUTE THE CAPITAL GAINS AS CLA IMED BY THE ASSESSEE. THUS, GROUND NO.2 OF THE C.O. IS ALL OWED. 7. IN VIEW OF THE ABOVE, SINCE QUANTUM ADDITIONS IN RE SPECT OF CAPITAL GAINS STAND DELETED, THERE IS NO QUESTION OF LEVYIN G A PENALTY IN RESPECT OF THAT AND PROPORTIONATE PENALTY SO LEVIED IN RESPECT OF ADDITION MADE ON ACCOUNT OF CAPITAL GAINS, IS HEREB Y DELETED. 8. AFTER THE DECISION OF HON'BLE I.T.A.T., AMRITSAR, O NLY AN AMOUNT OF RS. 1,32,437/- WHICH WAS THE ADDITION MADE BY TH E A.O. ON ACCOUNT OF INTEREST INCOME FROM BANK WHICH WAS NOT SHOWN IN THE RETURN OF INCOME FROM THE ASSESSEE AND THE ADDITION TO THAT EXTENT WAS ALSO CONFIRMED LD. CIT(A). BEFORE THE HON'BLE I .T.A.T., AMRITSAR, THE GROUND RELATING TO THIS ADDITION IN T HE CO OF THE ASSESSEE (GROUND NO.3) WAS NOT PRESSED BY THE ASSES SEE HENCE THE ADDITION TO THIS EXTENT IS CONFIRMED AND ATTAINED F INALITY. NO SPECIFIC SUBMISSIONS ARE MADE BEFORE ME ALSO. THIS ADDITION IS NOT AN ADDITION WHICH COULD BE SAID TO HAVE BEEN MADE O N ANY ESTIMATE OR ON ACCOUNT OF ANY DIFFERENCE OF OPINION. THE INT EREST INCOME WAS AS PER BANK ACCOUNT AND THE ADDITION STANDS DUL Y ACCEPTED BEFORE THE HON'BLE I.T.A.T. BY THE ASSESSEE AND NOW ALSO NO SUBMISSIONS AT ALL ARE MADE IN THIS REGARD. IN VIEW OF THIS PENALTY UNDER SECTION 271(1)(C) OF THE IT ACT IN RESPECT OF THE ADDITION OF RS. 1,32,437/- IS CONFIRMED. 9 I.T.A. NO. 292(ASR)/2013 ASSESSMENT YEAR: 2006-07 7) WE HAVE THOROUGHLY GONE THROUGH THE IMPUGNED ORD ER PASSED BY LEARNED CIT(A) AND WE ARE OF THE VIEW THAT LEARN ED FIRST APPELLATE AUTHORITY HAS RIGHTLY DELETED THE PENALTY IN DISPUT E ON THE BASIS OF THE ORDER PASSED BY THIS BENCH IN QUANTUM APPEAL OF THE ASSESSEE AS WELL AS CROSS-OBJECTION I.E. I.T.A. NO. 464(ASR)/2000 & C.O . NO. 34(ASR)/2010, DATED 3 RD SEPTEMBER, 2012 AND PASSED A WELL REASONED ORDER T HEREFORE, NO INTERFERENCE IS CALLED FOR. ACCORDINGLY, WE UPHOLD THE IMPUGNED ORDER DATED 08.02.2013 PASSED BY LEARNED CIT(A), JALANDHA R, AND DISMISS THE APPEAL FILED BY THE REVENUE. 8) IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH AUGUST, 2013 SD/./- SD/./- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 12 TH AUGUST, 2013 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEES: SH. GURDIP SINGH SIDHU, 17, WARYAM NAGAR, JALANDHAR 2. INCOME TAX OFFICER, WARD NO.III(4), JALANDHAR 3. THE CIT(A), JALANDHAR 4. THE CIT, JALANDHAR 5. THE SR DR, I.T.A.T.,AMRITSAR TRUE COPY BY ORDER 10 I.T.A. NO. 292(ASR)/2013 ASSESSMENT YEAR: 2006-07 (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.