Sonal Nandkishore Parikh, Ahmedabad V. Income Tax Officer(International Taxation)-I, Ahmedabad

ITA 3388/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1667 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 05-05-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 07-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAURYA SHUKLA
• Assessee Lawyers: M G PATEL
• Keywords: Cost of acquisition

Judgement Text

ITA NO.3388/AHD/2015 A.Y. 2011-12 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.3388/AHD/2015 ASSESSMENT YEAR: 2011-12 SONAL NANDKISHORE PARIKH VS. INCOME TAX OFFICER, (FORMERLY: SONAL SNEHAL GANDHI), (INTL. TAXATION) -I, AHMEDABAD. 5, PATIDAR SOCIETY, PANCHVATI FIVE ROAD, ELLISBRIDGE, AHMEDABAD 380 006. [PAN ANHPG 6941 L] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.G. PATEL, A.R. RESPONDENT BY : SHRI SHAURYA SHUKLA, SR. D.R . DATE OF HEARING : 05.05.2016 DATE OF PRONOUNCEMENT : 06.05.2016 O R D E R PER R.P. TOLANI, JUDICIAL MEMBER: THIS IS ASSESSEES APPEAL. 2. BRIEF FACTS ARE: (I) DURING THE ASSESSMENT YEAR 2011-12, THE APPELL ANT ACQUIRED A PLOT WITH A CONSTRUCTION OF MANEKBAUG CO-OP. HOUSING SOCIETY FO R RS.70,00,000/-. DURING THE YEAR UNDER CONSIDERATION, THE APPELLANT ENTERED INT O SALE OF THIS BUNGALOW AT RS.90,00,000/- ON 23.02.2011 AND CLAIMED A DEDUCTIO N ON ACCOUNT OF COST OF ACQUISITION AT RS.90,32,668/- AND COST OF IMPROVEME NT OF RS.37,89,999/-. THE ASSESSEE, THEREFORE, DISCLOSED A NET LONG TERM CAPI TAL LOSS OF RS.38,22,667/-. THE ASSESSING OFFICER, TO ASCERTAIN THE GENUINENESS OF COST OF IMPROVEMENT, CONDUCTED FIELD ENQUIRIES AND OBTAINED PHOTOGRAPHS OF THE ASS ETS TO ASCERTAIN GENUINENESS OF ITA NO.3388/AHD/2015 A.Y. 2011-12 PAGE 2 OF 4 COST OF ADDITION. THE RESULT OF SUCH ENQUIRIES WAS CONFRONTED TO THE ASSESSEE. THE ASSESSEE, THEREFORE, WITHDREW HER CLAIM FOR A LOSS OF RS.38,22,667/-. (II) THUS, THE CONTROVERSY ABOUT THE ADDITION PERTA INS ONLY TO THE CLAIM OF COST OF IMPROVEMENT OF THE HOUSE PROPERTY IN QUESTION. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS. THE ASSESSEE BY ITS DETAILED REPLY CONTENDED THAT AFTER MAKING THE CLAIM OF COST OF IMPROVEMENT THE LONG TERM CAPI TAL GAIN WAS AT A LOSS FIGURE AND EVEN AFTER WITHDRAWAL OF THE CLAIM THE LONG TERM CA PITAL GAIN REMAINED AT A LOSS FIGURE. THUS, THERE WAS NO INTENTION TO EVADE ANY TAX. III) THE CLAIM OF COST OF IMPROVEMENT WAS SUPPORTE D BY COPIOUS EVIDENCE IN THE FORM OF WORK BILLS OF THE CONTRACTOR NAMELY QUALITY TECHNOCAST PRIVATE LIMITED WHICH IS PLACED ON THE PAPER BOOK FROM PAGE NOS. 33 TO 41 . IV) ALL THE RELEVANT DETAILS IN RESPECT OF THE CLAI M OF COST OF IMPROVEMENT WAS FILED ALONG WITH THE RETURN, ALL THE PRIMARY DETAILS HAVI NG BEEN FURNISHED ALONG WITH THE RETURN. MERELY BECAUSE CLAIM WAS DISPUTED BY THE A SSESSING OFFICER AND WITHDRAWN BY THE ASSESSEE, THE PENALTY WAS NOT ELIGIBLE AS HE LD BY THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS PRIVATE LIMIT ED, 322 ITR 158. IN ANY CASE THERE IS NO TAX PAYABLE AND THE PENALTY CONTEMPLATE D ONLY ON A TECHNICAL ISSUE. ASSESSING OFFICER, HOWEVER, IMPOSED PENALTY WHICH W AS CHALLENGED BEFORE THE LD. CIT(A) WHO CONFIRMED THE PENALTY. 3. AGGRIEVED, THE ASSESSEE IS BEFORE US. ITA NO.3388/AHD/2015 A.Y. 2011-12 PAGE 3 OF 4 4. LD. COUNSEL FOR THE ASSESSEE REITERATED THE FACT S AND CONTENDS THAT THERE IS NO OCCASION AND THIS IS NOT A CASE OF IMPOSITION OF PE NALTY INASMUCH AS ALL THE BILLS AND VOUCHERS PERTAINING TO COST OF IMPROVEMENT AND OTHE R PRIMARY DETAILS ABOUT THE CLAIM WERE DISCLOSED IN THE RETURN. THERE IS NO ISSUE OF AVOIDANCE OF ANY TAX AS IN BOTH THE SITUATIONS THE TAX LIABILITY IS NIL AND THE LONG TE RM CAPITAL GAIN IS A LOSS FIGURE. FURTHER, RELIANCE IS PLACED ON THE FOLLOWING JUDGEMENTS:- (I) CIT VS. HOTEL SABAR PVT. LTD. [264 ITR 381 (GUJ )] (II) CIT VS. GLOW TECH STEELS (P) LTD. [148 TAXMAN 289 (GUJ)] (III) NUCHEM LTD. VS. DCIT [49 ITD 441 (DEL)] (IV) CIT VS. HARSHVARDHAN CHEM. & MINERAL LTD. [25 9 ITR 212 (RAJ)] (V) CIT VS. SKYLINE AUTO PRODUCTS P. LTD. [271 ITR 335 (MP)] (VI) CIT VS. ANAND WATER METER MFG. CO. [117 ITR 8 66 (P&H)] (VII) CIT VS. M.P. NARAYANAN [224 ITR 528 (MAD)] (VIII) CIT VS. S.P.K. STEELS PVT. LTD. [270 ITR 156 (MP)] (IX) CIT VS. INDEN BISLERS [240 ITR 943 (MAD)] (X) NATIONAL TEXTILES VS. CIT [249 ITR 125 (GUJ)] (XI) CIT VS. UNION ELECTRIC CORPORATION [281 ITR 26 6 (GUJ)] 5. LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE OR DERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORDS. IN OUR CONSIDERED VIEW, THE ASSESSEES EX PLANATION ABOUT THE CLAIM OF COST OF IMPROVEMENT HAS NOT BEEN FOUND TO BE FALSE OR UN REASONABLE. THE CLAIM IS SUPPORTED BY PROPER BILLS AND VOUCHERS OF THE CONTR ACTOR. LONG TERM CAPITAL GAIN WITH THE CLAIM AND AFTER WITHDRAWAL OF THE CLAIM IS AT L OSS FIGURE. IT DEMONSTRATES THAT THERE IS NO LOSS TO REVENUE EVEN IF THE ASSESSEE HAS WITH DRAWN HER CLAIM. SINCE ALL THE PRIMARY DETAILS WERE FILED ALONG WITH RETURN OF INC OME WHICH HAVE NOT BEEN ESTABLISHED TO BE UNPROVED, MERELY BECAUSE ON ASSES SING OFFICERS QUESTIONING ASSESSEES WITHDRAWAL CLAIM CANNOT TANTAMOUNT TO CO NCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. RESPECTFULLY FOL LOWING THE HONBLE SUPREME COURTS ITA NO.3388/AHD/2015 A.Y. 2011-12 PAGE 4 OF 4 JUDGEMENT IN THE CASE OF RELIANCE PETROPRODUCTS PRI VATE LIMITED (SUPRA) AND OTHERS AS RELIED BY THE LD COUNSEL FOR THE ASSESSEE, WE HA VE NO HESITATION TO HOLD THAT THIS IS NOT A FIT CASE FOR LEVY OF PENALTY. THUS, WE DELET E THE IMPUGNED PENALTY. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. (THIS ORDER PRONOUNCED IN THE OPEN COURT TODAY ON T HE 6 TH DAY OF MAY, 2016.) SD/- SD/- N.K. BILLAIYA R.P. TOLANI (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, THE 6 TH DAY OF MAY, 2016 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDE NT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FIL E BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD