Shri Narayanbhai Keshavlal Patel, Ahmedabad V. The Dy.CIT, Circle-2, Ahmedabad

ITA 2949/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9640 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-02-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 21-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Principle of natural justice; Cost of acquisition
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER ./ ITA NO. 2949/AHD/2015 / ASSESSMENT YEAR: 2011-2012 SHRI NARAYANBHAI KESHAVLAL PATEL, PROP. M/S. N.K. CORPORATION, 1, SHAIKUTIR BUNGLOW, DAFNALA ROAD, NR. CIRCUIT HOUSE, SHAHIBAG, AHMEDABAD-4 .. APPELLANT PAN : AHSPP 6781 E VS THE DCIT, CIRCLE-2, AHMEDABAD .. RESPONDENT ASSESSEE(S) BY : SHRI S.N. DIVATIA, AR REVENUE BY : SHRI KAMLESH MAKWANA, SR. DR. / DATE OF HEARING 18/02/2016 /DATE OF PRONOUNCEMENT 18/02/2016 / O R D E R THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE, IS DI RECTED AGAINST THE ORDER OF THE CIT (A)-10, AHMEDABAD, DATED 19.08.201 5. THE RELEVANT ASSESSMENT YEAR IS 2011-12. 2. THE SOLITARY ISSUE THAT ARISES FOR OUR CONSIDERA TION IS WHETHER THE CIT(A) IS JUSTIFIED IN CONFIRMING THE LEVY OF PENAL TY AMOUNTING TO RS.1,62,420/-, IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE AS FOLL OWS:- THE ASSESSEE IS AN INDIVIDUAL. HE IS ENGAGED IN T HE BUSINESS OF ORGANIZER AND DEVELOPER OF CONSTRUCTION SCHEMES. RE TURN OF INCOME WAS FILED FOR THE RELEVANT ASSESSMENT YEAR ON 20.07 .2011, DECLARING (SMC) ITA NO. 2949/AHD/2015 SHRI NARAYANBHAI KESHVLAL PATEL VS. DCIT AY 20011-12 2 TOTAL INCOME OF RS.5,64,11,290/-. DURING THE COURS E OF ASSESSMENT PROCEEDINGS, THE ASSESSEE NOTICED THAT WHILE COMPUT ING THE SHORT TERM CAPITAL GAIN (STCG) ON SALE OF LAND BEARING SURVEY NO.635 AT VILLAGE UVARASAD, HE HAD TAKEN THE FULL COST OF ACQUISITION THOUGH HE HAD ONE- HALF SHARE THEREIN. THIS HAD RESULTED INTO UNDERST ATEMENT OF STCG BY RS.5,08,800/-. HENCE, THE ASSESSEE BY LETTER DATED 17.09.2013 OFFERED THE SAME. THE ASSESSING OFFICER ACCEPTED THE MISTA KE BROUGHT TO HIS NOTICE BY THE ASSESSEE AND ASSESSED THE SAME WHILE COMPLETING ASSESSMENT U/S 143(3) ON 11.11.2013. HOWEVER, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) IN RESP ECT OF THE SAID ADDITION. THE ASSESSEE FURNISHED EXPLANATION VIDE R EPLY DATED 18.11.2013 AND 26.05.2014. BUT, THE ASSESSING OFFIC ER REJECTED THE SAID EXPLANATION AND LEVIED THE PENALTY. THE CIT(A) CON FIRMED THE PENALTY. 4. AGGRIEVED BY THE CONFIRMATION OF PENALTY BY THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL, RAISING THE FOLLOWING GROUNDS:- 1.1 THE ORDER PASSED U/S 250 ON 19.08.2015 FOR AY 2011- 12 BY CIT(A)-10 ABAD UPHOLDING THE PENALTY OF RS.1,62,420 /- LEVIED U/S 271(1)(C) BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAIN ST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT WITH REGARD TO THE IMPUGN ED PENALTY. 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND O N FACTS IN CONFIRMING THE PENALTY OF RS.1,62,420/- LEVIED U/S 271(1)(C) BY AO, THOUGH THE APPELLANT HAD NEITHER CONCEALED ANY INCO ME NOR (SMC) ITA NO. 2949/AHD/2015 SHRI NARAYANBHAI KESHVLAL PATEL VS. DCIT AY 20011-12 3 FURNISHED ANY INACCURATE PARTICULARS OF INCOME. ON THE CONTRARY, THE APPELLANT HAD SUO MOTU HAD WITHOUT PRIOR DETECT ION BY AO DISCLOSED THE MISTAKE EXCESS COST OF ACQUISITION TA KEN WHILE COMPUTING LTCG IN THE RETURN OF INCOME. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD PENALTY OF RS.1, 62,420/- LEVIED U/S 271(1)(C) BY AO. 3.1THE LD. CIT(A) HAS ERRED IN OBSERVING THAT THE AP PELLANT DID NOT ADMIT TILL HE WAS CONCERNED BY AO. 5. THE LD. AUTHORIZED REPRESENTATIVE REITERATED THE SUBMISSIONS MADE BEFORE THE INCOME-TAX AUTHORITIES AND THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUPPORTED THE OR DERS OF THE INCOME-TAX AUTHORITIES. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL ON RECORD. THE EXCESS CLAIM OF COST OF ACQUISITION MA DE BY THE ASSESSEE WAS NOT DETECTED BY THE ASSESSING OFFICER, BUT THE ASSESSEE HAD SUO MOTU AND VOLUNTARILY BROUGHT TO THE NOTICE OF THE A SSESSING OFFICER BY LETTER DATED 17.09.2013. THE ASSESSEE HAD FURNISHE D ALL THE RELEVANT DOCUMENTS WHICH WOULD SHOW THE SHARE OF THE ASSESSE E IN THE SAID LAND, E.G., THE COPY OF SALE DEED OF THE SAID LAND WAS PLACED ON THE RECORD OF THE ASSESSING OFFICER WHICH CLEARLY POINT OUT THE SHARE OF THE ASSESSEE. THUS, THERE WAS NO ATTEMPT ON THE PART O F THE ASSESSEE TO HIDE OR CONCEAL ANYTHING RELATING TO THIS CLAIM. I N VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN IMPOSING PENALTY. RELIANCE IS PLACED ON THE DECISION OF RELIANCE PETRO PRODUCTS P LTD, REPORTED IN 322 ITR 158 (SC), WHEREIN IT IS HELD THAT MERE REJECTION OF ANY CLAIM WOULD NOT AUTOMATICALLY INVITE (SMC) ITA NO. 2949/AHD/2015 SHRI NARAYANBHAI KESHVLAL PATEL VS. DCIT AY 20011-12 4 PENALTY SO LONG AS THE CLAIM IS BONAFIDE AND GENUIN E, THE REJECTION OF SUCH CLAIM WOULD NOT AMOUNT TO FURNISHING INACCURAT E PARTICULARS OF INCOME. IN THE LIGHT OF ABOVE, I DELETE THE PENALT Y IMPOSED U/S 271(1)(C) OF THE ACT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 18TH FEBRUARY, 201 6 AT AHMEDABAD. S D/- ( GEORGE GEORGE K. ) JUDICIAL MEMBER AHMEDABAD; DATED 18/02/2016 BIJU T., PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' ' # / CONCERNED CIT 4. ' ' # ( ) / THE CIT(A) 5. &'( ! , ' ! , / D R, ITAT, AHMEDABAD 6. (- . / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) !', / ITAT, AHMEDABAD