SHRI T. K. YUSUF KUNJIMOHD. HAJI, Nagpur V. DCIT-CIRCLE-3, Nagpur

ITA 294/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1665 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 02-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Business income; Condonation of delay
• Section: 143(3)

Judgement Text

1 ITA NO. 294/NAG/2014 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER (S.M.C.) I.T.A. NO. 294/NAG/2014 ASSESSMENT YEAR : 2007 - 08. SHRI T.K. YUSUF KUNJI MOHD. HAJI, DY. COMMISSIONER OF RESHMI TRADEDRS, MASKASATH, V/S. INCOME TAX, CIRCLE - 3, NAGPUR. NAGPUR. PAN AAUPM4865B APPELLANT . RESPONDENT. APPELLANT BY : SHRI ABHAY AGRAWAL. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 23 - 07 - 2015 DATE OF PRON OUNCEMENT : 18 TH AUGUST, 2015 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FROM THE ORDER OF LEARNED CIT(APPEALS) - II, NAGPUR DATED 27 - 11 - 2012. THE ASSESSEE HAS CHALLENGED THE CONFIRMATION OF PENALTY LEVIED U/S 271(1)(C) OF THE I.T. ACT OF RS.2,45,658/ - . 2. BEFORE PROCEED ING TO DECIDE THE ISSUE RAISED, I HAVE BEEN INFORMED B Y T HE R EGISTRY THAT THIS APPEAL WAS BELATEDLY FILED BY 474 DAYS. IN THIS REGARD THE ASSESSEE HAS FURNISHED AN AFFIDAVIT AND STATED ON OATH THAT THE ORDER OF LEARNED CIT(APPEALS) WAS HANDED O VER TO A PART TIME EMPLOYEE WHO IS AGED ABOUT 85 YEARS OF AGE AND SUFFE RING FROM MEMORY LOSS. THE DELAY IN FILING OF THE APPEAL WAS DUE TO HIS FORGETFULNESS , APART FROM THE ABOVE REASON , IT HAS ALSO BEEN INTIMATED THAT 2 ITA NO. 294/NAG/2014 ALTHOUGH THE ASSESSMENT PROCEEDINGS WERE COMPLETED BUT BY EXERCISING THE POWE R S VESTED U/S 131(3) OF I.T. ACT, T HE COMMISSIONER OF INCOME TAX - II, NAGPUR HAD G RANTED APPROVAL TO ACIT, CIRCLE - 3 TO RETAIN IN HIS CUSTODY THE BOOKS OF ACCOUNTS AND OTHER DOCUMENTS OF THE ASSESSEE UPTIL L 31 ST OF JANUARY, 2014. IN THIS REGARD THE SAID APPROVAL U/S 131(3) DATED 8 TH JANUARY, 2013 A LETTER BEARING F. NO.F N O.CIT - II/NGP/TECH/131(3)/75/11/2012 - 13 IS PLACED ON RECORD. LEARNED A.R. HAS ALSO PLACED RELIANCE ON THE FOLLOWING DECISIONS IN SUPPOR T OF CONDONATION OF DELAY : 1. COLLECTOR, LAND ACQ2UISITION V/S. MST. KATJI & O RS. 167 ITR 471. 2. SHRI Y.P. TRIVEDI V/S. JCIT (MUMBAI) ITAT) (ITA NO.5994/MUM/2010. 3. ALTHOUGH THE LEARNED D.R. HAS OBJECTED THE CONDONATION BECAUSE THERE WAS A SUBSTANTIAL DELAY IN FILING OF THIS APPEAL BUT I AM OF THE VIEW THAT WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PLACED AGAINST EACH OTHER, THEN THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED AND IF THERE IS NO DELIBERATE DELAY THEN BY ADOPTING A PRAGMATIC APPROACH, DELAY CAN BE CONDONED. THEREFORE, F OLLOWING THE PRECEDENTS CITED AND CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, I HEREBY CONDONE THE DELAY AND ADMIT THIS APPEAL FOR ADJUDICATION. 4. FACTS IN BRIEF AS EMERGED FROM THE PENALTY ORDER U /S 271(1)(C) DATED 18 - 06 - 2010 AND THE ASSESSMENT ORDER PASSED U/S 143(3) DATED 23 - 12 - 2009 WERE THAT THE ASSESSEE IN INDIVIDUAL CAPACITY HAS DISCLOSED THE P R OFIT ON SALE OF PLOTS UNDER THE HEAD LONG TERM CAPITAL GAINS. ON THE OTHER HAND, THE AO HAS TREATED THE SALE OF PLOTS AS BUSINESS INCOM E. WHILE LEVYING THE PENALTY THE AO HAS MENTIONED FEW CASE LAWS THAT THE ASSESSEE HAS DELIBERATELY DISCLOSED THE INCOME AS CAPITAL GAIN ALTHOUGH THE LAND WAS SOLD WITH INTENTION TO EARN BUSINESS PROFIT, HENCE THE 3 ITA NO. 294/NAG/2014 ASSESSEE HAS DELIBERATELY FURNISHED INAC CURATE PARTICULARS. RESULTANTL Y THE IMPUGNED PENALTY OF RS.2,45,700/ - WAS IMPOSED. 5. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, LEARNED CIT(APPEALS) AFFIRMED THE ACTION OF THE AO PRIMARILY ON THE GROUND THAT THE ASSESSEE HAD INTENT IONALLY CONCEALED THE PARTICULARS OF INCOME SO AS TO DECREASE THE TAX LIABILITY. SINCE THE PENALTY WAS CONFIRMED HENCE THE ASSESSEE IS NOW FURTHER IN APPEAL 6, I HAVE HEARD BOTH THE SIDES AND CAREFULLY PERUSED THE FACTS OF THE CASE IN THE LIGHT OF FEW CAS E LAWS CITED. THIS I S A CASE WHERE THE ASSESSEE HAS FILED THE RETURN OF INCOME AND DISCLOSED THE CAPITAL GAIN IN THE FOLLOWING MANNER : - IN FINANCIAL YEAR 2006 - 07 ASSESSEE SOLD A BOUT 40 PLOTS AND EARNED CAPITAL GAIN WHICH WAS DECLARED IN THE RETURNS FOR A.Y. 2007 - 08 I.E. THE YEAR IN QUESTION AS LONG TERM CAPITAL GAIN AS UNDER: - CAPITAL GAIN (MANSAR LAND) LONG TERM CAPITAL GAIN ON SALE OF PLOT CONSIDERATION RECD. ` . 18,69,154.00 LESS: EXPENSES INCURRED ` . 1,27,000.00 NET CONSIDERATION ` .17,42,154.00 LESS: COST OF ` .7,72,684/ - INDEXED AT ` . 8,97,143/ - ` . 8,97,143.00 LONG TERM CAPITAL GAIN ` . 8,45,011.00 4 ITA NO. 294/NAG/2014 TAX THEREON WAS ALSO PAID AS SELF ASSESSMENT TAX . 7. ON THE BASIS OF THE INFORMATION GIVEN BY THE ASSESSEE THE AO HAS RAISED AN OBJECTION THAT WHY THIS PROFIT SHOULD NOT BE TAXED AS BUSINESS INCOME. MEANING THEREBY, THERE WAS NO DIS P UTE ABOUT THE CONSIDERATION DISCLOSED BY THE ASSESSEE AND THE TRANSACTION CARRIED OUT. THE AO HAS ASSESSED THE PROFIT ON SALE OF PLOTS AT RS.9,69 ,470/ - . DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAS DISCLOSED ALL THE RELEVANT FACTS AND THOSE FACTS WERE NOT FOUND TO BE UNTRUE. IN SUCH A SITUATION WHEN THERE WAS NO SUCH ALLEGATION OF THE REVENUE DEPARTMENT THAT THE INFORMATION FURNISHED BY THE A SSESSEE IN THE RETURN OF INCOME WAS FACTUALLY INC O RRECT , THEN I AM OF THE CONSIDERED OPINION THAT THE EXPLANATION OF THE ASSESSEE THAT MERE CHANGE IN THE HEAD OF INCOME SHOULD NOT BE MADE THE BASIS FOR LEVY OF CONCEALMENT PENALTY ; HAS SUFFICIEN T FORCE. IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS 189 TAXMAN 322 (SC) IT WAS ALSO HELD THAT BY ANY STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING OF INACCURATE PART I C U LARS, RESULTANTLY, I HEREBY REVERSE THE FINDINGS OF THE AUTHORITIES BELOW AND DIRECT TO DELETE THE PENALTY. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH AUGUST, 2015. SD/ - (MUKUL K. SHRAWAT) JUDICIAL MEMBER NAGPUR, DATED: 18 TH AUGUST, 2015. 5 ITA NO. 294/NAG/2014 COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER WAKODE ASSISTANT REGISTRAR, ITAT, NAGPUR.