The ITO, Ward-2(3),(6), Surat V. Zarir Aerachasha Jabbar, Surat

ITA 3327/AHD/2015

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2067 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 02-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: RASESH SHAH
• Keywords: Sale consideration of property below Jantri Value; Revised return
• Section: 143(3); 50C; 142(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND MS MADHUMITA ROY, JUDICIAL MEMBER ./ ITA NO.3327/AHD/2015 [ [ / ASSTT. YEAR:2011-2012 ITO , WARD-2(3)(6), SURAT. VS ZA RIR AERACHASHA JABBAR , 150, KHADI STREET, VILLAGE BHATHA, TALUKA, CHORYASI,DIST. SURAT-394001. PAN: AKGPJ6076M (APPLICANT) (RESPONENT) REVENUE BY : MS ANUPAMA SINGLA, SR. D.R ASSESSEE BY : SHRI RASES H SHA H , C . A / DATE OF HEARING : 19/11/2018 / DATE OF PRONOUNCEMENT: 22/11/2018 / O R D E R PER MS MADHUMITA ROY, JUDICIAL MEMBER: THE INSTANT APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 14/10/2015, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-1, SURAT, ARISING OUT OF THE ORDER DATED 17/09/2014, PASSED U/S.271(1)(C) OF THE INCOME TAX ACT 1961, BY THE INCOME TAX OFFICER, WARD-2(3), SURAT , FOR THE ASSESSMENT YEAR 2011-2012. 2. THE BRIEF FACT OF THE CASE IS THIS THAT THE ASSESSEE AN AGRICULTURIST HAS FILED ITS RETURN OF INCOME ON 22/03/2013, DECLARING TOTAL INCOME AT ITA NO.3327/AHD/2015 FOR A.Y.2011-2012 2 RS.1,59,470/- COMPRISING OF THE INTEREST INCOME AND AGRICULTURE INCOME. ON SCRUTINY, THE NOTICE U/S.143(2) FOLLOWED BY 142(1) OF THE ACT, WERE ISSUED. THE ASSESSEE THEREFORE FILED A REVISED RETURN OFFERING CAPITAL GAIN INCOME IN RESPECT OF TWO AGRICULTURE LANDS AND ALSO PAID REQUISITE TAX THEREON. THIS PROFIT OF SALES WERE NOT SHOWN BY THE ASSESEE IN HIS ORIGINAL RETURN BUT WAS TRANSFERRED TO CAPITAL ACCOUNT AS NOT LIABLE TO TAX SINCE HE WAS UNDER THE BONA-FIDE BELIEF THAT AS BECAUSE THE LAND IS SITUATED BEYOND 8 KMS FROM THE CENTRE OF THE CITY THE CAPITAL GAIN OUT OF THE SALE OF THOSE LANDS ARE NOT TAXABLE. ONLY ON THE ADVICE OF HIS CONSULTANT IMMEDIATELY AFTER THE NOTICE U/S.143(2) OF THE ACT, HE OFFERED CAPITAL GAIN ON SUCH SALE. HOWEVER, THE LD.AO IN THE SCRUTINY PROCEEDINGS WAS OF THE OPINION THAT BOTH THE LANDS WERE SOLD BELOW THE PREVAILING JANTRI RATE AND THUS REFERRED THE MATTER TO THE DVO FOR ASCERTAINING VALUATION OF THE PROPERTY. THE DVO, HOWEVER, FOUND THE VALUE MORE THAN WHAT WAS SHOWN IN THE DOCUMENTS EXECUTED BY THE ASSESSEE FOR SUCH SALE. THE LD.AO, FINALIZED THE ASSESSMENT ACCEPTING THE CAPITAL GAIN INCOME OFFERED BY THE ASSESSEE AND MADE ADDITION FOR THE DEEMED SALE CONSIDERATION U/S.50C IN TERMS OF THE REPORT FURNISHED BY THE DVO. SUCH ASSESSMENT U/S. 143(3) OF THE ACT, WAS COMPLETED ON 18/03/2014, DETERMINING TOTAL INCOME AT RS.1,23,84,800/- COMPRISING OF CAPITAL GAIN INCOME OF RS.86,31,830/- AS OFFERED BY THE ASSESSEE IN THE REVISED COMPUTATION OF INCOME AND ADDITION OF FULL VALUE OF SALE CONSIDERATION AT RS.35,93,500/- U/S.50C OF THE ACT, OVER AND ABOVE THE INTEREST INCOME OF RS.1,59,470/- AS OFFERED BY THE ASSESSEE IN HIS ORIGINAL RETURN OF INCOME. PENALTY PROCEEDINGS WAS ALSO INITIATED ON SUCH TOTAL CAPITAL GAIN INCOME OF RS.1,22,25,331/-. HOWEVER, NO APPEAL WAS FILED BY THE ASSESSEE AGAINST SUCH QUANTUM ORDER PASSED BY THE LD.AO. IT APPEARS FROM THE RECORDS THAT DURING THE PENALTY PROCEEDING THE ASSESSEE FAITHFULLY SUBMITTED THAT HE WAS OF THE BONA-FIDE BELIEF THAT THE ITA NO.3327/AHD/2015 FOR A.Y.2011-2012 3 SALE OF AGRICULTURE LAND WAS NOT LIABLE TO CAPITAL GAIN TAX AND THUS CAPITAL GAIN INCOME WAS NOT OFFERED IN HIS ORIGINAL RETURN OF INCOME. HE FURTHER ADDED THAT ON THE BASIS OF THE ADVISE OF HIS CONSULTANT AT THE VERY THRESHOLD OF THE SCRUTINY ASSESSMENT PROCEEDINGS HE VOLUNTARILY SUBMITTED HIS REVISED COMPUTATION OF INCOME AND ALSO PAID THE ENTIRE TAX ALONG WITH THE INTEREST THEREON. THE ASSESSEE CONTENDED THAT NEITHER THERE WAS ANY CONCEALMENT OF INCOME NOR ANY INTENTION TO AVOID ANY TAX ON CAPITAL GAIN BY HIM OR THERE WAS NO FACT OF FILLING ANY INACCURATE PARTICULARS OF INCOME. IN ADDITION TO THAT THE ASSESSEE URGED BEFORE THE LD.AO THAT SINCE THE ADDITION WAS MADE IN THE DEEMING PROVISIONS OF SECTION 50C OF THE ACT, THE PENALTY IS NOT LEVIABLE. IN THIS PARTICULAR CASE, ACCORDING TO THE ASSESSEE LEVY OF PENALTY IS NOT AUTOMATIC ON THE ASSUMPTION OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME MERELY BECAUSE THE ASSESSEE HAS AGREED ASSESSMENT. THE SUBMISSION MADE BY THE ASSESSEE WAS ULTIMATELY REJECTED BY THE LD.AO AND HE THEN LEVIED THE PENALTY OF RS.21,94,470/- @ 100% TAX SOUGHT TO EVADED ON THE TOTAL CAPITAL GAIN INCOME OF RS.1,22,25, 331/- INCLUDING THE ADDITION OF RS.35,93,500/- MADE U/S.50C OF THE ACT. 3. IN APPEAL BEFORE LD.CIT(A), DELETED SUCH PENALTY IMPOSED BY THE AO ON THE PREMISE THAT THE ADDITION OF RS.35,93,500/- U/S.50C OF THE ACT, WAS MADE APPLYING THE DEEMING FICTION ENSHRINED IN THE SAID SECTION. HENCE THE INSTANT APPEAL BEFORE US FILED BY THE REVENUE. 4. AT THE TIME OF HEARING OF THE INSTANT APPEAL THE LD.DR RELIED UPON THE ORDER PASSED BY THE LD.AO. ON THE OTHER HAD THE LD.COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ASSESSEE HAS OFFERED THE INCOME AND ALSO PAID TAX ON ITS CAPITAL GAIN BEFORE IT WAS DETECTED BY THE ITA NO.3327/AHD/2015 FOR A.Y.2011-2012 4 DEPARTMENT AND ALSO BEFORE THE COMPLETION OF ASSESSMENT MADE BY THE AO. HE FURTHER ARGUED THAT NO SPECIFIC QUERY WAS RAISED REGARDING SALE OF AGRICULTURAL LAND MADE BY THE APPELLANT IN THE QUESTIONNAIRE U/S.142(1) OF THE ACT, DATED 25/04/2013, BY THE ITO. THE CONTENTIONS OF THE LD.REPRESENTATIVE OF THE ASSESSEE IS THIS THAT THE MOMENT THE ASSESSEE WAS ADVISED BY HIS CONSULTANT THAT THE DISTANCE OF THE AGRICULTURE LAND FROM THE NEAREST MUNICIPAL CORPORATION IS REQUIRED TO BE MEASURED NOT FROM THE CENTRE OF THE CITY BUT FROM THE END OF THE CITY LIMITS AND SINCE APPLYING THE SAME METHOD BOTH THE LANDS CAME WITHIN THE DISTANCE OF 8 KM FROM THE CITY OF SURAT, THE ASSESSEE FOUND THOSE TWO LIABLE TO CAPITAL GAIN TAX. IMMEDIATELY THEREUPON HE FILED THE REVISED COMPUTATION OF INCOME AND TAX PAID THEREUPON. THUS, DUTIES WAS DISCHARGED REGARDING PAYMENT OF TAX ON THE BASIS OF CAPITAL GAIN ARISING OUT OF THE SELLING OF THOSE TWO LANDS WAS MADE BY THE ASSESSEE BEFORE IT WAS DETECTED BY THE LD.AO. FURTHER THAT THE LD.AR VEHEMENTLY ARGUED THAT PENALTY U/S.271(1)( C) OF THE ACT, IS NOT LEVIABLE SINCE ADDITION WAS MADE ON THE BASIS OF THE DEEMING PROVISIONS OF SECTION 50C OF THE ACT. THE LD.AR, ALSO RELIED ON THE JUDGEMENT PASSED BY THE CO-ORDINATE BENCH AHMEDABAD, IN THE MATTER OF HATESH PRABHUDAS CHAUDHARY VS. ITO, WARD5(1)(3) PRONOUNCED ON 19/06/2018. ON THE TECHNICAL ASPECT OF THE MATTER SINCE ORDER OF THE PENALTY WAS IMPOSED ON BOTH THE LIMBS OF CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME THE SAID ORDER IS LIABLE TO BE SET ASIDE PARTICULARLY IN VIEW OF THE JUDGMENT PASSED BY THE JURISDICTIONAL HIGH COURT HAS ALSO CONTENDED BY HIM. NO SPECIFIC CHARGE HAS BEEN MENTIONED BY THE LD.AO WHILE IMPOSING PENALTY UPON HIM AS SUBMITTED BY THE LD.AR. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE ORDERS PASSED BY THE AUTHORITIES BELOW. IT APPEARS FROM THE RECORDS THAT THERE IS NEITHER ANY CONCEALMENT MADE BY THE ITA NO.3327/AHD/2015 FOR A.Y.2011-2012 5 APPELLANT NOR ANY INACCURATE PARTICULARS OF INCOME WAS FILED BY HIM SINCE THE APPELLANT WAS OF THE BONA-FIDE BELIEF THAT THE SALE OF THOSE TWO AGRICULTURE LAND WAS NOT LIABLE TO CAPITAL GAIN TAX. IT IS RELEVANT TO MENTION THAT SALE OF THOSE AGRICULTURAL LANDS WAS ALSO REFLECTED IN THE REGULAR BANK OF ACCOUNTS AND CAPITAL ACCOUNTS OF THE APPELLANT. IT WAS FURTHER ARGUED BY THE LD.AR, WHICH IS ALSO EVIDENT FROM THE RECORD THAT AT THE VERY THRESHOLD OF THE SCRUTINY PROCEEDING THE ASSESSEE HAS SUBMITTED ITS RE- COMPUTATION OF INCOME TAKING INTO CONSIDERATION OF CAPITAL GAIN OF THOSE TWO PLOTS AND TAX PAID THEREUPON ON THE ADVICE OF HIS CONSULTANT THAT THOSE TWO LANDS ARE COMING UNDER THE PURVIEW OF AGRICULTURE LAND AND THE CAPITAL GAIN OUT OF TRANSFER OF SUCH LANDS IS NOT EXEMPTED FROM INCOME TAX. NEEDLESS TO MENTION THAT THE CAPITAL GAIN OF RS.86,35,770/- THOUGH NOT OFFERED BY THE ASSESSEE AT THE INITIAL RETURN ON THE BONA-FIDE BELIEF AS STATED ABOVE THE SAME WAS SUBSEQUENTLY VOLUNTARILY OFFERED BY WAY OF REVISED COMPUTATION EVEN BEFORE DETECTION BY THE REVENUE. IT ALSO APPEARS FROM THE RECORD THAT THERE WERE NO SPECIFIC QUESTION RAISED ON TAXABLE CAPITAL GAIN IN THE QUESTIONNAIRE DATED 25/04/2013, WHICH WAS SERVED UPON THE ASSESSEE ALONG WITH THE NOTICE U/S.142(1) OF THE ACT. IT SEEMS THEREFORE, THAT THE ASSESSEE OFFERED THE AMOUNT FOR TAXATION VOLUNTARILY BEFORE THE COMPLETION OF SUCH ASSESSMENT PROCEEDINGS. FURTHER MORE, SINCE THE ITO ALSO ASSESSED VERY SAME VOLUNTARILY SURRENDERED AMOUNT WITH INTEREST AS APPELLANT INCOME, HE CANNOT LEVY PENALTY ON IT. THERE IS NO SUCH CONSCIOUS CONCEALMENT ON THE PART OF THE ASSESSEE NEITHER ANY MENSREA ON HIS PART WHICH CALLS FOR LEVY OF PENALTY. APART FROM THAT THE ADDITION MADE BY THE LD.AO WAS PURELY ON APPLICATION OF DEEMING PROVISIONS OF SECTION 50C OF THE ACT. IT IS WELL SETTLED PRINCIPLE OF LAW THAT THE PENALTY U/S.271(1)(C) OF THE ACT IS NOT LEVIABLE OWING TO THE ADDITION MADE UNDER DEEMING PROVISIONS OF SECTION 50C OF THE ACT. ITA NO.3327/AHD/2015 FOR A.Y.2011-2012 6 ON THIS PARTICULAR ASPECT WE ALSO GONE THROUGH THE JUDGMENT PASSED BY THE CO-ORDINATE BENCH OF AHMEDABAD, IN THE MATTER OF CHIMANLAL MANILAL PATEL VS. ADD.. CIT (2012) 33 CCH 647 (AHMEDABAD ITAT) AS RELIED UPON BY THE LD.AR THE RELEVANT PORTION WHEREOF IS REPRODUCED BELOW: 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. IT IS A FACT THAT THE ADDITION HAS BEEN MADE BY THE AO IN THE REVISIONARY PROCEEDINGS. THE ADDITION HAS BEEN MADE ON THE BASIS OF PROVISIONS OF SECTION 50C. IT IS NOT THE CASE OF THE AO THAT THE ASSESSEE HAS RECEIVED CONSIDERATION OVER AND ABOVE THAN THAT DECLARED IN THE SALES DEED. THE AO HAS NOT DISPUTED THE CONSIDERATION RECEIVED BY THE ASSESSEE. THE ADDITION HAS BEEN MADE ON THE BASIS OF DEEMING PROVISIONS OF SECTION 50C. THE ASSESSEE HAS FURNISHED ALL THE FACTS OF SALE, DOCUMENTS/MATERIAL BEFORE\ THE AO. THE AO HAS NOT DOUBTED THE GENUINENESS OF THE DOCUMENTS/DETAILS FURNISHED \BY THE ASSESSEE. ONLY BECAUSE THE ASSESSEE AGREED TO THE ADDITIONS BECAUSE OF THE DEEMING PROVISIONS IT CANNOT BE CONSTRUED TO BE FILING OF INACCURATE PARTICULARS ON THE PART OF THE ASSESSEE. THE ASSESSEE AGREED TO ADDITION ON THE BASIS OF VALUATIDN MADE BY THE STAMP VALUATION AUTHORITY CANNOT BE A CONCLUSIVE PROOF THAT THE SOLE CONSIDERATION AS PER THE SALE AGREEMENT IS SEEMED TO BE INCORRECT AND IVRO/TE.J IN VIEW OF THESE FACTS WE ARE OF THE CONSIDERED VIEW THAT PENALTY CANNOT BE LEVIED\ON THE BASIS OF DEEMING PROVISION. WE ACCORDINGLY DELETE THE SAME...' FURTHER THAT THE GENUINENESS OF THE DOCUMENTS DETAILS FURNISHED BY THE ASSESSEE HAS NEVER BEEN DOUBTED BY THE LD.AO IN THE PENALTY PROCEEDING. 6. WE FIND THAT THE LD.CIT(A) WHILE PASSING ORDER RELIED UPON DIFFERENT JUDGEMENTS PASSED BY DIFFERENT BENCHES ON THE POINT OF LAW. HE FINALLY CONCLUDED THAT IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE PENALTY U/S.271(1)(C)OF THE ACT IS NOT SUSTAINABLE SINCE THE ADDITION OF RS.35,93,500/- WAS MADE UNDER SECTION 50C OF THE ACT, PASSED ON THE HIGHER VALUATION OF SALE CONSIDERATION AS ADOPTED BY THE STAMP VALUATION AUTHORITY. HE FURTHER OBSERVED THAT THE LD.AO FAILED TO ESTABLISH THAT THE ASSESEE HAS RECEIVED MORE AMOUNT THEN WHAT WAS DISCLOSED IN THE SAID SALE DEED. SINCE THE VERY BASIS OF THE PENALTY PROCEEDING BEING THE ADDITION WAS MADE BY THE LD.AO UPON APPLICATION OF DEEMING FICTION OF THE PROVISION OF SECTION 50C OF THE ACT THE LD.CIT(A) DELETED SUCH PENALTY WE FIND NO INFIRMITY IN THE ORDER PASSED BY LD.CIT(A), TAKING INTO CONSIDERATION THE ENTIRE ASPECT OF THE MATTER AND PRONOUNCEMENTS ON ITA NO.3327/AHD/2015 FOR A.Y.2011-2012 7 THIS ASPECT MADE BY DIFFERENT BENCHES OF THE LD.TRIBUNAL AS OBSERVED BY THE LD.CIT(A). WE FURTHER AGREE WITH THE VIEW TAKEN BY THE LD.CIT(A), WHILE DECLARING ORDER OF THE PENALTY VOID ON THE GROUNDS THAT THE SAME WAS PASSED ON BOTH THE LIMBS OF BEING CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULAR OF INCOME AS WRONGLY HELD BY THE LD.AO. SINCE THERE IS NO INFIRMITY DETECTED IN THE ORDER PASSED BY THE FIRST APPELLATE AUTHORITY, WE FIND NO REASON TO INTERFERE WITH THE SAME. WE THUS CONFIRM THE SAID ORDER BY DISMISSING THE APPEAL PREFERRED BY THE REVENUE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 22/11/2018 AT SURAT. -SD- ( AMARJIT SINGH) ACCOUNTANT MEMBER TRUE COPY -SD- (MS MADHUMITA ROY) JUDICIAL MEMBER SURAT; DATED 22 /11/2018