Smt. Indiraben H.Patel, Anand V. Asstt. Commissioner of Income Tax,Circle-3, Vadodara

ITA 3286/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5972 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 26-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Residential status; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE, SHRI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER ITA NO. 3286/AHD/2015 (AS SESSMENT YEAR: 2011-12) SMT. INDIRABEN H. PATEL C/O: SHRI KRUSHNAVIJAY RICE MILL, KHAMBHAT ROAD, TA.: TARAPUR, DIST.: ANAND APPELLANT VS. ACIT, CIRCLE -3, AAYKAR BHAVAN, RACE COURSE CIRCLE, VADODARA RESPONDENT PAN: AFNPP1779B /BY ASSESSEE : SHRI ASEEM L. THAKKAR, A.R. /BY REVENUE : SHRI MUDIT NAGPAL, SR. D.R. /DATE OF HEARING : 01.01.2018 /DATE OF PRONOUNCEMENT : 27.02.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2011-12 ARISES AGAINST THE CIT(A)-5, VADODARAS ORDER DATED 07.08.2015, IN CAS E NO. CAB-5/318/2014-15, AFFIRMING ASSESSING OFFICERS ACTION MAKING IMPOSIN G PENALTY OF RS.14,71,190/- IN HIS ORDER DATED 22.07.2014, IN PROCEEDINGS U/S. 271 (1)(C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. ITA NO. 3286/AHD/15 [SMT. INDIRABEN H. PATEL VS. AC IT ] A.Y. 2011-12 - 2 - HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE ADVERT TO RELEVANT BASIC FACTS FIRST. THE AS SESSEE STATED TO BE A SENIOR CITIZEN LIVING MOSTLY IN U.S.A. AND THEREBY MANAGIN G HER DOMESTIC AFFAIR IN INDIA THROUGH A CARETAKER. SHE FILED HER RETURN ON 06.07 .011 DECLARING INCOME OF RS.78,81,570/- MAINLY IN THE NATURE OF LONG TERM CA PITAL GAINS. THE SAME STOOD PROCESSED. THE ASSESSING OFFICER TOOK UP SCRUTINY THEREAFTER. HE FIRST OF ALL NOTICED THE ASSESSEE TO HAVE DECLARED LONG TERM CAPITAL GAI NS IN RESPECT OF SALE OF TWO PLOTS IN R.S. NO. 2124 & 2125 AT BAKROL DATED 15 TH AND 20 TH MAY, 2015 WHEREAS THE AIR INFORMATION POINTED OUT A THIRD SALE DEED AS WELL Q UA THE VERY SURVEY NUMBERS ON 16.10.2010. THE ASSESSEE AT THIS STAGE FILED HER L ETTER DATED 06.01.2014 GIVING DETAILS OF HER AGE, RESIDENTIAL STATUS IN ORDER TO PLEAD BONAFIDE INADVERTENCE IN NOT DECLARING THE THIRD SALE DEED AND CONSEQUENTIAL CAP ITAL GAINS. THE ASSESSING OFFICER PROCEEDED FURTHER TO ONCE AGAIN NOTICE THAT THE ASS ESSEE HAD IN FACT PURCHASED TOTAL AREA MEASURING 12,874 SQ.MTRS. VIDE TWO SALE DEEDS IN THE YEAR 1992 AND SOLD 11,910 SQ.MTRS. THROUGH THE IMPUGNED SALE DEEDS LEA VING BEHIND SMALL PARCEL ADMEASURING 838 SQ.MTRS. WHEREAS HER LONG TERM CAPI TAL GAINS COMPUTATION CLAIMED COST OF ACQUISITION TWICE AND THAT TOO NOT ON PROPO RTIONATE BASIS. THE ASSESSEE THEN FILED ONE MORE LETTER AGAIN ADMITTING THE SAID MIST AKE ON 30.01.2014. COUPLED WITH THIS, THE ASSESSEE HAD CLAIMED COST OF IMPROVEMENT OF RS.9.5LACS. SHE ALSO PLACED ON RECORD THE RELEVANT BILLS IN THE NATURE OF STATE MENT OF EXPENSES. THE ASSESSING OFFICER TREATED THE SAME TO BE NOT SUPPORTED BY THE RELEVANT EVIDENCE. CASE FILE FURTHER SUGGESTS THAT THE ASSESSEE HAD ALSO NOT DEC LARED BANK INTEREST INCOME OF RS.36,173/- PERTAINING TO THE RELEVANT PREVIOUS YEA R WHICH ALSO STOOD ADMITTED IN HER ABOVESTATED LETTER DATED 30.01.2014. ALL THIS MADE ASSESSING OFFICER TO RE- COMPUTE ASSESSEES LONG TERM CAPITAL GAINS TO BE RS .1,37,79,010/- FOLLOWED BY INTEREST INCOME ADDITION HEREINABOVE. HE ALSO INIT IATED THE IMPUGNED PENALTY PROCEEDINGS ALLEGING BOTH CONCEALMENT AS WELL AS FU RNISHING OF INACCURATE PARTICULARS OF INCOME. THE ASSESSEE DID NOT FILE A NY APPEAL AGAINST THE SAME. QUANTUM PROCEEDINGS THEREFORE ATTAINED FINALITY AT ASSESSMENT STAGE ITSELF. ITA NO. 3286/AHD/15 [SMT. INDIRABEN H. PATEL VS. AC IT ] A.Y. 2011-12 - 3 - 3. WE NOW COME TO THE IMPUGNED PENALTY PROCEEDINGS. THE ASSESSING OFFICER PASSED THE PENALTY ORDER ON 22.07.2014 LEVYING THE PENALTY IN QUESTION OF RS.14,71,190/- RELEVANT TO THE ABOVE TWO ISSUES OF LONG TERM CAPITAL GAINS AND INTEREST INCOME (SUPRA). HE PLACED HEAVY RELIANCE ON THE ABOVE NARRATED QUANTUM PROCEEDINGS TO CONCLUDE THAT ASSESSEES ACT AND CON DUCT THEREIN WAS BOTH IN THE NATURE OF CONCEALMENT AS WELL AS FURNISHING OF INAC CURATE PARTICULARS OF HER INCOME. THE CIT(A) HAS CONFIRMED THE IMPUGNED PENALTY IN LO WER APPELLATE PROCEEDINGS. 4. WE HAVE HEARD RIVAL SUBMISSIONS. CASE FILE PERU SED. BOTH THE PARTIES REITERATE THEIR RESPECTIVE STANDS AGAINST AND IN SU PPORT OF THE IMPUGNED PENALTY IMPOSED BY THE ASSESSING OFFICER AS UPHELD IN LOWER APPELLATE PROCEEDINGS. WE REVERT BACK TO THE RELEVANT FACTS ONCE AGAIN. WE H AVE SUFFICIENTLY INDICATED THAT THE ASSESSEE RESIDES MOSTLY IN USA AND HER CARETAKER MA NAGES ALL OF HER DOMESTIC CHORUS INCLUDING TAX MATTERS. IT IS EVIDENT THAT S HE HAD NOT DECLARED THE THIRD TRANSACTION, PROPORTIONATE COST OF ACQUISITION AND INTEREST INCOME AT THE FIRST INSTANCE. THE FACT HOWEVER REMAINS THAT THE IMPUGN ED SALE DEEDS PERTAIN TO THE VERY SURVEY NUMBERS. WE OBSERVE IN THESE FACTS THAT POS SIBILITY OF OVERLAPPING IN SUCH AN INSTANCE CANNOT BE COMPLETELY RULED OUT. SO IS THE CASE THAT ONCE THE ASSESSEE IS NOT MANAGING HER AFFAIRS ON HER OWN, THE POSSIBILIT Y OF AN INADVERTENT ERROR IS CLEARLY INDICATED IN EVEN CLAIMING DOUBLE COST OF ACQUISITI ON ADDED BACK LATER. WE TAKE INTO ACCOUNT ALL THESE FACTS TO QUOTE HONBLE APEX COURT S LANDMARK JUDGMENT IN PRICE WATER-HOUSE COOPERS PVT. LTD. VS. CIT [2012] 348 1T R 306 (SC) THAT SUCH INADVERTENCE CANNOT BE TERMED AS AN INSTANCE ATTRAC TING THE IMPUGNED PENALTY PROVISION IN SECTION 271(1)(C) OF THE ACT. WE REPE AT THAT THE ASSESSEES MULTIFOLDED ERRORS HEREINABOVE INTER ALIA IN NOT HAVING DECLARE D ONLY TWO SALE TRANSACTIONS INSTEAD OF THREE, NOT ADJUSTING COST OF INDEXATION ON PROPORTIONATE BASIS, NOT DECLARING INTEREST INCOME IN 1000S OF RUPEES AND NO T BEING ABLE TO PROVE COST OF IMPROVEMENT WHICH WERE ADMITTED LATTER ON BEING POI NTED OUT JOINTLY READ LEAD US TO A CONCLUSION THAT IT WAS A SILLY MISTAKE ON HER PAR T ON ALL THESE ISSUES. WE THUS DRAW SUPPORT FROM HONBLE APEX COURTS ABOVESTATED JUDGM ENT TO CONCLUDE THAT BOTH THE ITA NO. 3286/AHD/15 [SMT. INDIRABEN H. PATEL VS. AC IT ] A.Y. 2011-12 - 4 - LOWER AUTHORITIES HAVE ERRED IN IMPOSING THE PENALT Y IN QUESTION OF RS.14,71,190/- U/S. 271(1)(C) OF THE ACT. THE SAME IS THEREFORE D ELETED. 5. THIS ASSESSEES APPEAL IS ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS T HE 27 TH DAY OF FEBRUARY, 2018.] SD/- SD/- ( PRAMOD KUMAR ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 27/02/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0