Dy.C.I.T.-1, Agra V. Smt. Urmila Bansal, Agra

ITA 341/AGR/2013

• Counselvise Citation: 34120314 RSA 2013
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-02-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 04-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANURADHA
• Assessee Lawyers: P N AGARWAL
• Keywords: Sale consideration of property below Jantri Value; Assessment record
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ITA NO.341/AGRA/2013 ASSESSMENT YEAR: 2003-04 DY. COMMISSIONER OF INCOME TAX-1, VS. SMT. U RMILA BANSAL, AGRA. 5-6, RAGHUNATH NAGAR, AGRA. (PAN AEFPB 5712 D). (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. ANURADHA, JR. D.R. RESPONDENT BY : SHRI P.N. AGARWAL, ADVOCATE DATE OF HEARING : 27.02.2014 DATE OF PRONOUNCEMENT : 28.02.2014 ORDER PER PRAMOD KUMAR, ACCOUNTANT MEMBER: BY WAY OF THIS APPEAL THE ASSESSING OFFICER HAS CHA LLENGED CORRECTNESS OF THE ORDERS DATED 07.08.2013 PASSED BY THE LD. CIT(A )-1, AGRA DELETING PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE INCOME TAX A CT, 1961, FOR THE ASSESSMENT YEAR 2003-04 ON THE FOLLOWING GROUNDS :- 1. THAT THE LD. CIT(A)-I, AGRA HAS ERRED IN LAW AN D ON FACTS IN CANCELLING THE PENALTY LEVIED BY THE AO U/S 271(1)( C) WITHOUT CONSIDERING THE FACT THAT ASSESSEE HERSELF ADMITTED THAT THE PROVISIONS OF SEC. 50C ARE APPLICABLE IN THE CASE BUT FURNISHE D INACCURATE PARTICULARS OF HER INCOME OF LONG TERM CAPITAL GAIN . 2. THAT THE ORDER OF THE LD COMMISSIONER OF INCOME TAX (APPEALS) BEING ERRONEOUS IN LAW AND ON FACTS DESER VES TO BE SET ASIDE AND THE ORDER OF THE AO BE RESTORED. ITA NO.341/AGRA/2013 A.Y. 2003-04 2 3. THAT THE APPELLANT CRAVES LEAVE TO MODIFY ANY OF THE GROUNDS OF APPEAL OR TAKE ADDITIONAL GROUND DURING THE PENDENC Y OF THIS APPEAL. 2. BRIEFLY STATED, THE RELEVANT MATERIAL ACTS ARE L IKE THIS. DURING THE ASSESSMENT PROCEEDINGS, THE A.O. NOTED THAT THE ASSESSEE HAS S OLD PROPERTY ON 27.12.2002 FOR RS.45,00,000/-, BUT IN TERMS OF PROVISIONS OF SECTI ON 50C OF THE ACT THE CIRCLE RATE FOR THE SAID PROPERTY, FOR STAMP DUTY VALUATION, WA S RS.75,30,000/-. IN THE RETURN FILED BY THE ASSESSEE, THE ASSESSEE HAS DULY DISCLO SED THE FACT OF THE CIRCLE RATE AND SUBMITTED THAT THE VALUATION OF PROPERTY UNDER SECT ION 50C ON THE BASIS OF CIRCLE RATE IS HIGHLY EXCESSIVE AND VALUATION, THEREFORE, DESERVES TO BE REFERRED TO THE VALUATION OFFICER. IN OTHER WORDS, THE ASSESSEE HE RSELF CONTENDED THAT THE VALUATION FOR STAMP DUTY PURPOSE IS INCORRECT. IT WAS IN THIS BACKDROP THE A.O. REFERRED THE MATTER TO THE VALUATION OFFICER WHO IN TURN DECLINED TO VALUE THE SAID PROPERTY AS THE ENTIRE PROPERTY WAS DEMOLISHED BY T HE PURCHASER. THE A.O. THEN PROCEEDED TO ADOPT VALUATION AS PER CIRCLE RATE AS FULL VALUE OF CONSIDERATION UNDER SECTION 50C. 3. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN AP PEAL AND FINALLY THE MATTER REACHED BEFORE THE CO-ORDINATE BENCH OF THIS TRIBUN AL. THE TRIBUNAL REMITTED THE MATTER TO THE FILE OF A.O. WITH THE DIRECTION AS FO LLOWS :- 13. ACCORDINGLY, AFTER HEARING THE RIVALS SUBMISSI ONS, WE ARE OF THE VIEW THAT IN THESE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, IT WOULD BE APPROPRIATE TO RESTORE THE ISSUE BACK TO T HE FILE OF THE A.O. WITH THE DIRECTION TO GET THE SAID PROPERTY VALUED. LEARNED A.R. STATED THAT THE ASSESSEE WHO IS AN AGED WIDOW MAY NOT HAVE THESE STRUCTURAL DRAWINGS AVAILABLE WITH HER, HOWEVER, THE NECESSARY FACT AND ITA NO.341/AGRA/2013 A.Y. 2003-04 3 EVIDENCES ARE RECORDED IN THE SALE DEED AND THE APP ROVED VALUERS REPORT IS AVAILABLE ON RECORD AND THE ASSESSEE SHAL L MAKE AN ATTEMPT TO LOCATE THE STRUCTURAL DRAWING OF THE BUILDING OF WHICH HER LATE HUSBAND HAS BEEN OWNER SINCE 1966. WE FURTHER DIREC T THAT THE A.O. SHALL ALSO MAKE NECESSARY EFFORTS TO OBTAIN STRUCTU RAL DRAWING, SITE PLAN ETC. FROM THE MUNICIPAL AUTHORITIES ETC., AND OR AVAILABLE IN THE ASSESSMENT RECORDS OF THE ASSESSEE OF THE EARLIER Y EARS. THUS, WE HOLD THAT IT SHALL BE OBLIGATORY ON THE PART OF THE D.V. O. TO ESTIMATE THE VALUE OF THE PROPERTY ON THE BASIS OF WHATEVER MATE RIAL IS MADE AVAILABLE TO HIM. THE A.O. CAN CORRECT THE VALUE OF THE D.V.O. TO THE EXTENT PERMISSIBLE UNDER THE ACT. ACCORDINGLY, THE SAID ISSUE ADDRESSED BY GROUND NO.1 & 2 IS RESTORED BACK TO TH E A.O. WITH THE ABOVE DIRECTIONS. 4. AS A RESULT OF THE ASSESSMENT PROCEEDINGS SO REM ANDED TO THE FILE OF A.O., VALUATION WAS FINALLY DONE ADOPTING THE VALUE OF RS .72,90,300/-. IT WAS IN THIS BACKDROP THAT ADDITION WAS MADE IN RESPECT OF THE C APITAL GAINS BY ADOPTING SALE CONSIDERATION AT RS.72,90,300/- AS AGAINST SALE CON SIDERATION OF RS.45,00,000/- SAID TO HAVE BEEN ACTUALLY SEEN BY THE ASSESSEE. THE MA TTER HOWEVER DID NOT REST THERE. A.O. HAS ALSO IMPOSED PENALTY UNDER SECTION 271(1)( C) OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICUL ARS OF INCOME. THE STAND TAKEN BY THE A.O. WAS THAT THE ASSESSEE HAS AGAIN AND AGA IN GIVEN WRONG PARTICULARS OF INCOME BY NOT DISCLOSING THE FULL VALUE CONSIDERATI ON AS ENVISAGED UNDER SECTION 50C OF THE ACT. AGGRIEVED BY THE STAND SO TAKEN BY THE A.O., THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO DELE TED THE IMPUGNED ADDITION AND INTER ALIA OBSERVED AS FOLLOWS :- 4.1 AFTER CAREFUL CONSIDERATION OF THE ENTIRE FACT S AND CIRCUMSTANCES OF THE CASE, I AM IN AGREEMENT WITH T HE CONTENTIONS ITA NO.341/AGRA/2013 A.Y. 2003-04 4 RAISED BY THE APPELLANT THAT THIS IS NOT A FIT CASE OF LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 4.2 IT IS ACCEPTED FACT THAT EVEN IN THE ORIGINAL R ETURN OF INCOME ITSELF, THE ASSESSEE HERSELF DISCLOSED THE FACT OF THERE BEING SOME DIFFERENCE BETWEEN ACTUAL SALE CONSIDERATION AND TH E VALUE AS PER STAMP DUTY ACT. THE NOTE ATTACHED TO RETURN OF INCO ME MADE IT CLEAR THAT THERE IS SUCH A DIFFERENCE AND IN CASE, AO WIS HES TO INVOKE PROVISION OF SECTION 50C; THEN THE MATTER MAY KINDL Y BE REFERRED TO VALUATION CELL, AS PER THE PROVISIONS OF SECTION 50 C(2) OF THE ACT. IT IS ON RECORD THAT THE HONBLE ITAT DIRECTED FOR THE RE FERENCE TO VALUATION CELL AND CAPITAL GAIN HAS BEEN FINALLY CO MPUTED AS PER THE REVISED VALUATION MADE BY THE VALUATION CELL. 4.3 THUS, NOT ONLY ALL THE FACTS WERE DULY DISCLOSE D, BUT EVEN THE ASSESSMENT HAS FINALLY BEEN MADE AS PER THE PROVISI ONS OF SECTION 50C INCLINE WITH DIRECTION ISSUED BY THE HONBLE ITAT. 4.4 EVEN IF WE DO NOT AGREE WITH THE APPELLANTS OB JECTIONS TO THE VALUE MADE BY THE VALUATION CELL AND LEGAL OBJECTIO NS ON THE ISSUE OF SECTION 59C; WE HAVE TO ACCEPT THE CONTENTION THAT THE ADDITION, ON THE BASIS OF WHICH IMPUGNED PENALTY HAS BEEN LEVIED, IS PURELY ON LEGAL BASIS AND NOT ON THE BASIS OF ANY CONCEALMENT OF PA RTICULARS BY THE APPELLANT. FURTHER, THERE IS NO GAIN SAYING THAT CO URTS HAVE ALREADY HELD THAT ADDITION ON THE BASIS OF PROVISION OF SEC TION 50C CANNOT BE MADE A BASIS FOR PENALTY U/S. 271(1)(C), FOR EXAMPL E, THE CASE LAW OF CIT VS. MADAN THEATRES LTD. 260 CTR 75 (CAL.) IS RELIED UPON. THE OTHER VARIOUS COURTS DECISION CITED BY THE APPELLA NT ARE ALSO APPLICABLE TO THE FACTS OF THE APPELLANTS CASE. 5. THE A.O. IS NOT SATISFIED AND IS IN APPEAL BEFOR E US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED THE FACTUAL MATRIX OF THE CASE AS ALSO A PPLICABLE LEGAL POSITION. ITA NO.341/AGRA/2013 A.Y. 2003-04 5 7. WE FIND THAT THE ASSESSEE HAS DULY DISCLOSED NOT ONLY THE CONSIDERATION ACTUALLY RECEIVED BY HER BUT ALSO THE FACT OF APPLI CABILITY OF SECTION 50C AS ALSO TAKEN STAND ON THE SAME IN HER RETURN OF INCOME ITS ELF. IT WAS A VERY TRANSPARENT AND FAIR WAY OF MAKING A CLAIM. THE MERE FACT THAT THIS CLAIM HAS NOT BEEN FOUND TO BE ACCEPTABLE DOES NOT NEGATE THE FACT THAT THE ASSESSEE HAD A REASONABLE EXPLANATION FOR CAPITAL GAIN DECLARED BY HER AND TH AT THE CONDUCT OF THE ASSESSEE CANNOT BE FAULTED. IN THE PECULIAR FACTS OF THIS C ASE IN WHICH THE ORIGINAL PROPERTY WAS DESTROYED MUCH BEFORE THE VALUATION CARRIED OUT , THE VALUATION AS PER DVOS REPORT IS ESSENTIALLY ESTIMATE BASED ON TOO MANY PR ESUMPTIONS. AS A MATTER OF FACT, IT IS ONE OF THE RARE CASES WHEREIN EVEN WORKING OF SECTION 50C CANNOT REALLY BE EFFECTIVE AT ALL INASMUCH AS THE VERY ASSET, WHICH WAS REQUIRED TO BE VALUED BY DVO, WAS DEMOLISHED BEFORE VALUATION COULD TAKE PLA CE. WHATEVER MAY HAVE BEEN SAID ON MERITS, IT WAS INDEED NOT A FIT CASE O F PENALTY AS THERE WAS NO GOOD GROUND TO REJECT ASSESSEES EXPLANATION. KEEPING I N VIEW ALL THESE FACTS AND ENTIRETY OF THE FACTS, WE ARE OF THE CONSIDERED VIE W THAT THE LD. CIT(A) WAS QUITE JUSTIFIED IN DELETING THE IMPUGNED PENALTY. WE UPH OLD HIS ACTION. 8. IN THE RESULT, APPEAL IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2014) SD/- SD/- (BHAVNESH SAINI) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 28 TH FEBRUARY, 2014 ITA NO.341/AGRA/2013 A.Y. 2003-04 6 PBN/* COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, AGRA TRUE COPY