RAVI KANT, MUMBAI V. DCIT 2(3), MUMBAI

ITA 3059/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5012 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 04-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V V SHASTRI
• Assessee Lawyers: VIJAY KOTHARI
• Section: 54F; 54; 139

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - D BENCH. . , ! ! ! ! '#$% '#$% '#$% '#$% , # # # # &' &' &' &' BEFORE S/SH.D.MANMOHAN,VICE-PRESIDENT & RAJENDR A,ACCOUNTANT MEMBER ./ ITA NO.3059/MUM/2012 , ( ( ( ( / ASSESSMENT YEAR-2007-08 RAVIKANT, 10 CAS HOUSE, GR FLOOR, DR. C.H.STREET, MARINE LINES, MUMBAI-400002 V/S. DCIT 2(3) AAYKAR BHAVAN,MUMBAI-20 PAN: AAIPK7999L ( )* / APPELLANT) ( +,)* / RESPONDENT) )* )* )* )* - - - - # ## # / APPELLANT BY :SHRI VIJAY KOTHARI +,)* . - # / RESPONDENT BY :SHRI V.V.SHASTRI . .. . / / / / / DATE OF HEARING :04/09/2013 0( . / / DATE OF PRONOUNCEMENT :13/09/2013 , 1961 . .. . 254(1) # ## # $/1/ $/1/ $/1/ $/1/     ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, A.M: CHALLENGING THE ORDER DATED OF THE CIT(A)-, MUMBAI ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEAL: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN THE LAW THE HONBLE CIT(A) ERRED IN UPHOLDING THE PENALTY LEVIED BY THE LD AO OF RS. 5,97,706/- U/S. 271(1)(C) OF THE ACT AND THE REASON S ASSIGNED FOR DOING SO ARE WRONG AND CONTRARY TO THE PROVISION OF INCOME TAX AND RULES MADE THERE UNDER . 2.YOUR APPELLANT CRAVE, LEAVE TO ADD, ALTER, AMEND OR MODIFY ANY OR ALL GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. 2 .ASSESSEE,AN INDIVIDUAL FILED HIS RETURN OF INCOME ON 31.03.2009 DECLARING TOTAL INCOME AT RS. 1.87 CRORES.ASSESSMENT WAS COMPLETED ON 23.12.2009 DETER MINING THE TOTAL INCOME AT RS. 2.06 CRORES.THE VARIATION IN THE ASSESSED INCOME AND THE RETURN OF INCOME WAS DUE TO INCLUSION OF RS. 17.75 LACS IN THE HANDS OF THE ASSESSEE UNDER THE H EAD LONG TERM CAPITAL GAINS(LTCGS) AS AGAINST NIL INCOME DISCLOSED BY THE ASSESSEE UNDER THE SAID HEAD.DURING THE COURSE OF ASSESSMENT PROCEEDINGS,ASSESSEE WAS DIRECTED TO FILE DETAILS O F PROPERTY SOLD AND THE BASIS OF NIL INCOME UNDER THE HEAD LTCGS.FROM THE DETAILS FILED AO FOUND THAT ASSESSEE HAD SOLD HIS PROPERTY AT KETA GARDEN,DELHI FOR A CONSIDERATION OF RS.40 LACS VIDE AGREEMENT DATED 06.11.2006,THAT HE HAD EARNED LTCG OF RS. 17.75 LACS,THAT HE ASSESSEE HAD NOT DIS CLOSED THE CAPITAL GAINS.AO DIRECTED THE ASSESSEE TO FURNISH THE BASIS OF NIL CAPITAL GAIN T HE ASSESSEE DID NOT FURNISH DETAILED WORKING THEREFORE,LTCG AMOUNTING TO RS.17,75,715/- WAS ADDE D TO THE TOTAL INCOME OF THE ASSESSEE.AO INITIATED THE PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT VIDE ORDER-SHEET DATED 23. 12.2009 AND A NOTICE U/S. 274 R.W. SECTION 271(1) (C) WAS ISSUED. IN RESPONSE THERETO ASSESSEE FILED SUBMISSIONS ON 29.1.2010 AND 16.6.2010.AFTER CONSIDERATION THE SUB MISSION OF THE ASSESSEE,AO HELD THAT ASSESSEE HAD DISCLOSED CAPITAL GAIN AS NIL IN THE RETURN OF INCOME,THAT NO DETAILS AS TO THE COST TO THE SALE A PROPERTY WERE FILED, THAT NO DETAILS OF INVESTMENT LEADING TO EXEMPT OF THE CAPITAL GAIN FROM INCOME TAX WERE FILED,THAT IT WAS ONLY ASSESSEES INTENTIO N TO BUY A NEW PROPERTY WHICH WAS NOT EXECUTED,THAT THE ASSESSEE WAS AWARE OF THESE FACT WHILE FILING THE RETURN OF INCOME,THAT HE CHOSE 2 ITA NO. 3059/MUM/2012(AY 2007-08) SHRI RAVI KANT NOT TO DISCLOSE THESE FACTS,THAT THE BEHAVIOR OF TH E ASSESSEE SHOWED THE CLEAR INTENTION OF THE ASSESSEE TO CONCEAL THE FACT AND FILE INACCURATE PA RTICULARS OF INCOME.IN THESE CIRCUMSTANCES, HE LEVIED A PENALTY OF RS. 5,97,706/-. 2 . 1. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPE LLATE AUTHORITY (FAA).AFTER GOING THROUGH THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER, HE HELD THAT APPELLANT HAD FILED ITS RETURN OF INCOME ON 31.03.2009,THAT ON THE DATE OF FILING OF RETURN OF INCOME APPELLANT WAS AWARE IT HAD NOT RE-INVESTED THE CAPITAL GAINS WITHIN THE PRESCR IBED TIME LIMIT, THAT THE AMOUNT OF CAPITAL GAIN OF RS.17.75 LACS WAS TAXABLE AND NOT AT ALL EXEMPT,THA T THE APPELLANT HAD NOT BUSINESS TO CLAIM THE SAME AS EXEMPT UNLESS HE WANTED TO AVOID PAYMENT OF TAX ON LTCG,THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME REGARDING TAXABILITY OF C APITAL GAINS,THAT HE DID NOT FURNISH THE DETAILS EV EN WHEN AO HAS SPECIFICALLY ASKED HIM,THAT LEVY OF PEN ALTY AT THE MINIMUM RATE OF 100% WAS REASONABLE.AS A RESULT, HE CONFIRMED THE ORDER OF T HE AO. 3 .BEFORE US,AUTHORIZED REPRESENTATIVE (AR) SUBMITTED THAT ASSESSEE HAD FILED THE RETURN ON 31. 03.2009 U/S. 139(4) OF THE ACT, THAT ASSESSEE HAD S OLD PROPERTY AT RS.40 LACS, THAT DEDUCTION U/S. 54F OF THE ACT WAS CLAIMED,THAT TO AVOID FURTHER LITIGA TION ASSESSEE HAD AGREED WITH THE AO TO SURRENDER THE LTCG,THAT ONCE INVESTMENT WAS MADE AS PER THE P ROVISIONS OF LAW THERE WAS NO JUSTIFICATION FOR LEVYING PENALTY U/S. 271(1)(C) OF THE ACT.HE REFERR ED TO PAGE NO. 33 OF THE PAPER BOOK AND RELIED UPON THE JUDGMENTS OF RAJESH KUMAR JALAN(286 ITR 27 4-GAUHATI HIGH COURT) AND MS.JAGRATIAGARWAL(339ITR610-P&H HIGH COURT).DEPARTM ENTAL REPRESENTATIVE (DR)STRONG -LY SUPPORTED THE ORDER OF THE AO AND THE FAA.HE FURTHE R SUBMITTED THAT ASSESSEE HAD NOT DISCLOSED THE TRUE FACTS BEFORE THE AO,THAT PENALTY WAS RIGHTLY L EVIED/CONFIRMED BY THE AO/FAA. 4 .WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL BEFORE US.IN THIS CASE AIR INFORMATION WAS RECEIVED BY THE AO ABOUT SALE OF PR OPERTY BY THE ASSESSEE FOR RS. 40 LACS.HE MADE FURTHER INQUIRIES IN THIS REGARD AND MADE AN ADDITI ON OF RS.17,75,715/- TO THE INCOME OF THE ASSESSEE.WE FIND THAT ASSESSEE HAD PURCHASED A PROP ERTY ON 07.10.2008 (PAGE-33 OF THE PAPER BOOK).AS PER THE ASSESSEE,HE HAD SUBMITTED THE SAID AGREEMENT TO THE AO AND FAA.THUS,THE FACT OF PURCHASE OF A NEW HOUSE PROPERTY AFTER THE SALE OF DELHI PROPERTY WAS KNOWN TO THE DEPARTMENTAL AUTHORITIES.IN THIS CASE RETURN OF INCOME WAS FILED ON 31.03.2009.SO,BEFORE FILING THE RETURN OF INCOME,THOUGH BELATED,ASSESSEE HAD INVESTED THE SAL E PROCEEDS OF HOUSE PROPERTY IN PURCHASING A NEW HOUSE PROPERTY.IN THESE CIRCUMSTANCES,IN OUR OP INION,IT CANNOT BE SAID THAT THE ASSESSEE HAD CONCEALED PARTICULARS OF INCOME OR HAD FURNISHED IN ACCURATE PARTICULARS OF INCOME. AN ADDITION MADE IN DURING ASSESSMENT PROCEEDINGS SHOULD NOT RE SULT IN AUTOMATIC LEVY OF CONCEALMENT- PENALTY.AO AND FAA WERE AWARE THAT ASSESSEE HAD FIL ED NECESSARY DETAILS OF THE TRANSACTION AND HAD FILED RETURN ON 31.03.2008.SO,BENEFITS OF THE B ENEFICIAL ENACTMENT I.E.SECTION 54 OF THE ACT SHOULD HAVE BEEN EXTENDED TO THE ASSESSEE.IT IS NOT KNOWN IN WHAT CIRCUMSTANCES ASSESSEE AGREED FOR THE ADDITION DURING THE ASSESSMENT PROCEEDING,B UT HE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS OF INCOME.IN THE CASE OF RAK ESH JALAN(SUPRA)HONBLE HIGH COURT OF GAUHATI HAS HELD AS UNDER : ..FROM A READING OF SUB-SECTION (2) OF SECTION 54 OF THE ACT IT IS CLEAR THAT ONLY SECTION 139 HAS BEEN MENTIONED THEREIN, IN THE CONTEXT THAT THE UNU TILISED PORTION OF THE CAPITAL GAINS ON THE SALE OF PROPERTY USED FOR RESIDENCE SHOULD BE DEPOSITED BEF ORE THE DATE OF FURNISHING THE RETURN OF INCOME UNDER SECTION 139 OF THE INCOME-TAX ACT, 1961. SECT ION 139 CANNOT MEAN ONLY SECTION 139(1) BUT IT MEANS ALL SUB-SECTIONS OF SECTION 139. UNDER SUB-SE CTION (4) OF SECTION 139 ANY PERSON WHO HAS NOT FURNISHED A RETURN WITHIN THE TIME ALLOWED TO HIM U NDER SUB-SECTION (1) OF SECTION 142 MAY FURNISH THE RETURN FOR ANY PREVIOUS YEAR AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE 3 ITA NO. 3059/MUM/2012(AY 2007-08) SHRI RAVI KANT RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION O F THE ASSESSMENT WHICHEVER IS EARLIER. THE ASSESSEES CASE WAS THAT SINCE THE RETURN FOR THE A SSESSMENT YEAR 1996-97 COULD BE FURNISHED BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT, WHICHEVER IS EARLIER, UNDER SUB-SECTION (4), HE WAS ENTITLED TO FULFIL THE CONDITIONS FOR EXEMPTION UNDER SECTION 54 UP TO MARCH 30, 1998. TH E ASSESSEE WAS ENTITLED TO EXEMPTION UNDER SECTION 54 ON THE ENTIRE CAPITAL GAINS ON THE SALE OF HIS HOUSE PROPERTY. RESPECTFULLY,FOLLOWING THE JUDGMENTS RELIED UPON BY THE AR, WE REVERSE THE ORDER OF THE FAA AND DECIDE THE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE. AS A RESULT APPEAL FILED BY THE ASSESSEE STANDS ALL OWED. 3 '4 3/ 5 &6 '7/ . '/ 8 . ORDER PRONOUNCED IN THE O PEN COURT ON 13 TH SEPTEMBER, 2013  . 0( # $ 9 :& 13, / 2013 . 1 ; SD/- SD/- ( . / D. MANMOHAN ) ( '#$% '#$% '#$% '#$% / RAJENDRA) / VICE-PRESIDENT # # # # &' &' &' &' /ACCOUNTANT MEMBER / MUMBAI, :& /DATE: 13.09 . 2013 SK     . .. . +/< +/< +/< +/< =#<(/ =#<(/ =#<(/ =#<(/ / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / )* 2. RESPONDENT / +,)* 3. THE CONCERNED CIT(A)/ > ? , 4. THE CONCERNED CIT / > ? 5. DR D BENCH, ITAT, MUMBAI / <@1 +/ . , . . $ . 6. GUARD FILE/ 1 A ,