The Asstt. Commissioner of Income Tax, Hoshiarpur V. Sh. Sohal Singh Thandal, Hoshiarpur

ITA 350/ASR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0619 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 30-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANAKER
• Assessee Lawyers: J S BHASIN
• Keywords: Salary income; Cost of acquisition; Revised return
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. (CAMP AT JALANDHAR) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.349(ASR)/2015 ASSESSMENT YEAR:2007-08 PAN: ACYPJ9087J INCOME TAX OFFICER, VS. SMT. MOHINDER KAUR JOSH, WARD-2, HOSHIARPUR. WARD NO.7, PIPLANWALA. HOSHIARPUR. (APPELLANT) (RESPONDENT) DEPARTMENT BY: SH. BHAWANI SHANAKER, DR ASSESSEE BY: SH. J.S. BHASIN, ADV. ITA NO.350(ASR)/2015 ASSESSMENT YEAR:2007-08 PAN: AECPT3715 ASSTT. COOMR. OF INCOME TAX VS. SH. SOHAL SINGH THA NDAL, HOSHIARPUR CIRCLE, VILL. THANDAL, TEH. GARHSHANKE R, HOSHIARPUR. DISTT. HOSHIARPUR. (APPELLANT) (RESPONDENT) DEPARTMENT BY: SH. BHAWANI SHANAKER, DR ASSESSEE BY: NONE ITA NO.404(ASR)/2015 ASSESSMENT YEAR:2007-08 PAN: AECPT3715 ASSTT. COOMR. OF INCOME TAX VS. SH. TIKSHAN SUD, HOSHIARPUR CIRCLE, EX-CABINET MINISTER, HOSHIARPUR. SHALIMAR NAGAR, HOSHIARPUR. (APPELLANT) (RESPONDENT) DEPARTMENT BY: SH. BHAWANI SHANAKER, DR ASSESSEE BY: NONE ITA NO.339(ASR)/2015 ASSESSMENT YEAR:2007-08 2 ITA NOS. 349, 350, 404 & 339(ASR)/2015 & C.O. NO.229ASR)/ 2015 :AY 2007-08 PAN: AJZPK0892Q INCOME TAX OFFICER, VS. SH. SATNAM SINGH KAINTH, NAWANSHAHAR VILL. SOTRAN, P.O. CHAK KALAL, NAWANSHAHAR. (APPELLANT) (RESPONDENT) C.O. NO.22(ASR)/2015 (ARISING OUT OF ITA NO.349(ASR)/2015) ASSESSMENT YEAR:2007-08 PAN: AJZPK0892Q SH. SATNAM SINGH KAINTH, VS. INCOME TAX OFFICER, VILL. SOTRAN, P.O. CHAK KALAL, NAWANSHAHAR NAWANSHAHAR. (APPELLANT) (RESPONDENT) DEPARTMENT BY: SH. BHAWANI SHANAKER, DR ASSESSEE BY: SH. GUNJIT SINGJ SYAL, ADV. DATE OF HEARING: 24/06/2016 DATE OF PRONOUNCEMENT: 29/06/2016 ORDER PER A.D. JAIN, JM; ALL THE FOUR APPEALS FILED BY THE REVENUE ARE DIRE CTED AGAINST DIFFERENT ORDERS OF LD. CIT(A)-1, JALANDHAR, EACH DATED 27.04 .2015 PERTAINING TO THE ASSESSMENT YEAR 2007-08, CHALLENGING THE CANCELLATI ON OF PENALTIES UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 AGAIN ST ALL THE ABOVE DIFFERENT ASSESSES. 2. C.O. NO.22(ASR)/2015 FILED BY THE ASSESSEE, SH. SATNAM SINGH KAINTH, HAS NOT BEEN PRESSED BY THE LD. COUNSEL FOR THE ASS ESSEE AT THE TIME OF HEARING. HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 3 ITA NOS. 349, 350, 404 & 339(ASR)/2015 & C.O. NO.229ASR)/ 2015 :AY 2007-08 3. IN ITA NO.350(ASR)/2015, THE LD. COUNSEL FOR THE ASSESSEE HAS FILED APPLICATION FOR SEEKING ADJOURNMENT OF THE CASE. TH E REQUEST OF THE ASSESSEES COUNSEL IS REJECTED AND ACCORDINGLY, WE PROCEED TH E DECIDE THE CASE OF MERITS. 4. AS THE ISSUE INVOLVED IS COMMON IN ALL THE APPEA LS, THEY ARE BEING DISPOSED OF BY THIS COMPOSITE ORDER. 5. SINCE THE FACTS IN ALL THE APPEALS ARE COMMON, H OWEVER, FOR THE SAKE OF CONVENIENCE, THE SAME ARE BEING TAKEN FROM ITA NO.3 49(ASR)/2015, IN THE CASE OF SMT. MOHINDER KAUR JOSH. 6. THE BRIEF FACTS OF THE CASES ARE THAT THE ASSESS EE WAS A MEMBER OF HOUSING SOCIETY OFMLAS AND EX MLAS, NAMED AS PUNJAB I CO-OPERATIVE HOUSE BUILDING SOCIETY LTD., MOHALI, WHICH WAS THE OWNER OF 21.2 ACRES OF LAND IN VILLAGE KANSAL, DISTT. MOHALI. THE SOCIETY ENTERED INTO A TRIPARTITE JOINT DEVELOPMENT AGREEMENT ON 25.02.2007 WITH M/S. HASH BUILDERS (PVT.) LIMITED, CHANDIGARH AND M/S. TATA HOUSING DEVELOPMENT COMPAN Y LTD., MUMBAI, BY VIRTUE OF WHICH THE SOCIETY WOULD TRANSFER ITS LAN D FOR DEVELOPMENT IN LIEU OF MONETARY CONSIDERATION AND ALSO CONSIDERATION IN KI ND TO THE MEMBERS OF THE SOCIETY. THE ASSESSEE WAS A MEMBER OF THE SAID SOCI ETY, OWNING 1,000 SQ. YARDS LAND. THE TOTAL CONSIDERATION WAS SETTLED AT RS.1,6 5,00,000/- PLUS ALLOTMENT OF TWO FLATS OF 2250 SQ. FEET EACH TO THE ASSESSEE (BO TH VALUING AT RS.2,02,50,000/-), OUT OF WHICH THE ASSESSEE HAD RE CEIVED RS.30,00,000/- ON 27.02.2007, RS.36,00,000/- ON 27.04.2007. THE ASSES SEE DERIVED HER INCOME FROM SALARY, PENSION AS MEMBER OF PUNJAB LEGISLATIV E ASSESSMBLY, FURNISHER 4 ITA NOS. 349, 350, 404 & 339(ASR)/2015 & C.O. NO.229ASR)/ 2015 :AY 2007-08 HER RETURN FOR THE YEAR UNDER CONSIDERATION 30.07.2 007 DECLARING AN INCOME OF RS.1,56,817/- PLUS AGRICULTURE INCOME OF RS.88,000/ - ONLY. THE ASSESSEE ALSO FILED REVISED RETURN ON 11.4.2008 DECLARING THEREI N AN INCOME OF RS.28,44,500/- PLUS AGRICULTURE INCOME OF RS.88,000 /- WHICH INCLUDED LONG TERM CAPITAL GAINS OF RS.26,81,681/-. DURING THE AS SESSMENT PROCEEDINGS, THE ASSESSEE ONCE AGAIN FILED REVISED RETURN OF INCOME ON 27.02.2009 DECLARING THEREIN AN INCOME OF RS.1,62,817/- PLUS AGRICULTURE INCOME OF RS.88,000/- IN THE SECOND RETURN, THE ASSESSEE HAD SHOWN INCOME B Y WAY OF LONG TERM CAPITAL GAINS FROM THE SALE OF HER PLOT MEASURING 1000 SQ. YDS. THE AO NOTICED THAT AS PER THE AGREEMENT DATED 25.02.2007, EACH OF THE MEM BERS OF THE SOCIETY INCLUDING THE ASSESSEE, OWNING PLOT OF 1000 SQ. YAR DS WERE TO RECEIVE RS.1,65,00,000/- IN CASH AND TWO FURNISHED FLATS ME ASURING 2250 SA. FEET EACH, WITH MARKET VALUE OF RS.2,02,50,000/-, CALCUL ATED AT THE RATE OF RS.4,500/- PER SQ. FEET. THUS, THE TOTAL CONSIDERAT ION FOR TRANSFER OF PLOT CAME TO RS.3,67,40,000/-. HOWEVER, THE AO COMPUTED THE INCOME OF THE ASSESSEE BY WAY OF LONG TERM CAPITAL GAINS AT RS.26,81,681/- BY TAKING INTO ACCOUNT ONLY RS.30,00,000/- WHICH THE ASSESSEE HAD RECEIVED DURI NG THE YEAR UNDER CONSIDERATION. THE ORIGINAL ASSESSMENT IN THE CASE OF THE ASSESSEE WAS COMPLETED BY THE AO U/S 143(3) OF THE ACT ON 07.1 2.2009 AT AN ASSESSED INCOME OF RS.28,44,498/- PLUS AGRICULTURE INCOME RS .88,000/-. THE AO MADE AN ADDITION OF RS.26,81,681/- TO RE-REVISED RETURNE D INCOME OF THE ASSESSEE WHICH REPRESENTED LONG TERM CAPITAL GAINS ON THE S ALE OF PLOT. HOWEVER, THE ASSESSMENT FRAMED BY THE AO VIDE ORDER DATED 27.02. 2009 WAS FOUND TO BE 5 ITA NOS. 349, 350, 404 & 339(ASR)/2015 & C.O. NO.229ASR)/ 2015 :AY 2007-08 ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE ON THE GROUND THAT THE AO HAD NOT TAKEN INTO ACCOUNT THE FULL VALUE O F SALE CONSIDERATION OF PLOT BELONGING TO THE ASSESSEE WHILE CALCULATING LONG T ERM CAPITAL GAINS ON THE SALE OF PLOT. THE ORDER PASSED U/S 263 OF THE ACT DATED 25.03.2011 WAS UPHELD BY THE ITAT, AMRITSAR VIDE ITS ORDER IN ITA NO.295(ASR )/2011 DATED 13.08.2013. 7. THE AO REFRAMED THE SET-ASIDE ASSESSMENT VIDE O RDER DATED 13.12.2011 AT AN ASSESSED INCOME OF RS.3,64,93,498/- (ACTUALLY ASSESSED INCOME SHOULD BE RS.3,65,94,498/-) PLUS AGRICULTURE INCOME OF RS. 88,000/-. WHILE COMPLETING THE ASSESSMENT, THE AO COMPUTED THE LONG TERM CAPIT AL GAINS AT RS.3,64,31,681/- (RS.3,67,50,000/- (-) INDEXED COST OF ACQUISITION RS.3,13,319/-) WHICH ADDED TO THE RETURNED INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT FO R CONCEALING AND FILING INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF A DDITION MADE WHICH REPRESENTED UNDISCLOSED LONG TERM CAPITAL GAINS WER E ALSO INITIATED. 8. THE AO LEVIED THE PENALTY OF RS.82,99,000/- BEIN G 100% OF THE TAX SOUGHT TO BE EVADED ON THE ASSESSEE, VIDE ORDER DAT ED 11.09.2014, PASSED UNDER SECTION 271(1)(C) OF THE ACT. 9. BY VIRTUE OF THE IMPUGNED ORDER, DATED 27.04.201 5, THE LD. CIT(A) CANCELLED THE PENALTY LEVIED ON THE ASSESSEE, HOLD ING AS FOLLOWS: 5.4. ON CAREFULLY CONSIDERATION OF THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT AND EXPLANATION 1 TO SECTION 271(1)C) OF THE A CT, I AM OF THE OPINION THAT THE PENALTY FOR CONCEALMENT CAN BE LEVIED WHEN THE ASSESSEE HAS EITHER CONCEALED THE PARTICULARS OF HIS INCOME OR H AS FURNISHED INACCURATE PARTICULARS OF HIS INCOME OR IS NOT ABLE TO GIVE AN Y SATISFACTORY EXPLANATION IN THIS REGARD TO ANY MATTER WHICH IS MATERIAL TO T HE COMPUTATION OF HIS INCOME. NOW, WE EXAMINE THE FACTS OF THE CASE OF TH E ASSESSEE IN THE 6 ITA NOS. 349, 350, 404 & 339(ASR)/2015 & C.O. NO.229ASR)/ 2015 :AY 2007-08 ABOVE CONTEXT. IT IS NOTEWORTHY THAT THE VIEW TAKEN BY THE AO THAT THE AMOUNT OF LONG TERM CAPITAL GAINS HAS TO BE COMPUTE D BY TAKING THE TOTAL CONSIDERATION, ACTUALLY RECEIVED OR RECEIVABLE BY T HE APPELLANT TOWARDS SALE CONSIDERATION AND THAT THE TOTAL AMOUNT OF LO NG TERM CAPITAL GAINS IS ASSESSABLE AS THE INCOME OF THE YEAR UNDER APPEAL H AS BEEN UPHELD BY THE HONBLE JURISDICTIONAL TRIBUNAL. THEREFORE, THE LI MITED POINT FOR CONSIDERATION IS WHETHER THE APPELLANT HAS A REASON ABLE EXPLANATION FOR HIS OMISSION TO DISCLOSE THE INCOME BY WAY OF LONG TERM CAPITAL GAINS IN THE RETURN. IN THE REVISED RETURN FILED BY THE ASSESSEE ON 11.4.2008, I.E., BEFORE THE ISSUE OF NOTICE U/S 148, THE APPELLANT HAD DISC LOSED THE LONG TERM CAPITAL GAINS BY TAKING INTO ACCOUNT THE ACTUAL AMO UNT RECEIVED DURING THE YEAR. HOWEVER, THE RETURN WAS AGAIN REVISED ON 27.0 2.2009 WITHOUT INCLUDING ANY CAPITAL GAINS. IT HAS ALSO BEEN NOTIC ED THAT THE AO HAS ALSO FRAMED ORIGINAL ASSESSMENT ON THE BASIS OF FIRST RE VISED RETURN ALTHOUGH THE SAME WAS FOUND TO BE ERRONEOUS AS WELL AS PREJU DICIAL TO THE INTEREST OF REVENUE AND CANCELLED BY THE CIT. IN MY OPINION, THE ASSESSEE HAS FULLY DISCLOSED THE FACTS RELATING TO SALE OF HIS PLOT IN THE REVISED RETURN AND HAS NOT DISCLOSED ANY LONG TERM CAPITAL GAINS IN THE OR IGINAL-RE-REVISED RETURN AS SHE WAS IN DOUBT REGARDING THE YEAR OF TAXABILIT Y OF THE LONG TERM CAPITAL GAINS OR WAS UNDER THE BONA FIDE BELIEF THA T THE LONG TERM CAPITAL GAINS WILL BE TAXABLE WHEN FULL CONSIDERATION OF PLOT WILL BE RECEIVED. IT IS ALSO AN UNDISPUTED FACT THAT THERE WERE CERTAIN CON TROVERSIES AND DISPUTES WITH REGARD TO TRANSFER OF PLOT. IN FACT, I UNDERST AND THAT THE VARIOUS ISSUES HAVE STILL NOT BEEN RESOLVED AND THE CONSTRUCTION O F THE BUILDING, IN WHICH THE ASSESSEE WAS TO GET TWO FLATS AS A PART OF SALE CONSIDERATION, HAS NOT STARTED TILL DATE. IN THESE PECULIAR FACTS AND IN T HE CIRCUMSTANCES OF THE CASE, THE BELIEF OF THE ASSESSEE THAT THE LONG TERM CAPITAL GAINS, ON WHICH SHE HAS TO PAY TAX, HAS TO BE COMPUTED ONLY ON THE BASIS OF THE AMOUNT WHICH HAS ACTUALLY BEEN RECEIVED BY HER IN CASH OR IN THE YEAR WHEN FULL CONSIDERATION WILL BE RECEIVED, CANNOT BE CONSIDERE D TO BE TOTALLY UNREASONABLE, THOUGH IT IS NOT STRICTLY LEGAL. THE FACT THAT ALL THE MATERIAL FACTS WHICH WERE REQUIRED TO COMPUTE THE LONG TERM CAPITAL GAINS ALTHOUGH INCORRECTLY WERE FURNISHED BY THE APPELLANT IN HIS RETURN FILED ON 11.4.2008, ESTABLISH HIS BONA FIDE CREDENTIALS. 5.5. IN VIEW OF THE ABOVE STATED FACTS AND IN THE C IRCUMSTANCES OF THE CASE AND IN VIEW OF THE DISCUSSION MADE IN THE PREC EDING PARAGRAPHS, IT IS HELD THAT THE AO IS NOT JUSTIFIED IN LEVYING THE PE NALTY OF RS.82,00,000/- IN THIS CASE U/S 271(1)(C) OF THE ACT FOR CONCEALING A ND FILING INACCURATE PARTICULARS OF INCOME. THE PENALTY OF RS.82,00,000/ - LEVIED BY THE AO IN THIS CASE IS, THEREFORE, DIRECTED TO BE DELETED. 10. THE REVENUE IS IN APPEAL BEFORE THIS BENCH AGAI NST THE DELETION OF PENALTY BY THE LD. CIT(A). 7 ITA NOS. 349, 350, 404 & 339(ASR)/2015 & C.O. NO.229ASR)/ 2015 :AY 2007-08 11. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASES OF ALL THESE ASSESS ES HAVE DELETED THE ADDITIONS ON QUANTUM BY FOLLOWING THE JUDGMENT IN I DENTICAL CASE OF SH. C.S. ATWAL VS. CIT, VIDE ORDER, DATED 22.07.2015, PASSE D IN ITA NO.200 OF 2013 (O&M), REPORTED IN 279 CTR 330 (P&H). THE LD. COUNS EL DRAWN OUR ATTENTION TO THE ORDER THE ITAT, AMRITSAR BENCH, IN THE CAS E OF BIKRAMJIT SINGH GILL VS. ACIT, PASSED IN ITA NO. 181(ASR)/2014, VIDE ORDE R DATED 07.01.2016 FOR THE ASSESSMENT YEAR 2008-09, WHERE THE APPEAL OF THE AS SESSEE ON PENALTY HAS BEEN ALLOWED. THE FINDINGS OF THE TRIBUNAL ARE AS U NDER: 14. IT IS IN VIEW OF THE ABOVE OBSERVATIONS OF TH EIR LORDSHIPS IN C.S. ATWAL VS. CIT (SUPRA), THAT THE CASE OF THE PRESE NT ASSESSEE HAS BEEN DISPOSED OF. IT HAS BEEN CONTENDED ON BEHALF OF THE ASSESSEE THAT AS SUCH, THE QUANTUM ADDITION STANDS EFFECTIVELY DELETED BY THE HONBLE HIGH COURT. THIS HAS NOT BEEN DISPUTED BEFORE US. 15. ONCE THE QUANTUM ADDITION STANDS DELETED BY TH E HONBLE HIGH COURT, THE VERY RAISON D CTRE OF THE PENALTY AT HAN D NO LONGER SURVIVES AND FOR THIS VERY REASON ITSELF, THE PENALTY MUST GO. I T IS ORDERED ACCORDINGLY. TO REITERATE, THE BENEFIT OF THE ORDER OF THE HONBLE HIGH COURT (SUPRA) WAS NOT AVAILABLE TO THE LD. CIT(A), AS OBSERVED BY HIM AND AS NOTED HEREINABOVE. 16. TO SUM UP, SINCE THE QUANTUM ADDITION LEADING T O IT STANDS DELETED, THE RESULTANT PENALTY IN QUESTION IS ALSO DELETED. 12. THE LD. DR, ON THE OTHER HAND, RELIED ON THE IM PUGNED ORDER. 13. HAVING HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF THE MATERIAL PLACED ON RECORD, WE ARE OF THE VIEW THAT THE ISSUE IN DISPU TE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY T HE ORDER OF THE ITAT, AMRITSAR BENCH, IN THE CASE OF SH. BIKRAMJIT SINGH GILL VS. DCIT, (SUPRA), ON 8 ITA NOS. 349, 350, 404 & 339(ASR)/2015 & C.O. NO.229ASR)/ 2015 :AY 2007-08 IDENTICAL FACTS PENALTY HAS BEEN CANCELLED AND THE ASSESSEES APPEAL HAS BEEN ALLOWED. FURTHER, WHEN THE HONBLE HIGH COURT HAS D ELETED THE ADDITION IN THE CASES OF THE ASSESSES BY FOLLOWING THE DECISION IN THE CASE OF SH. C.S. ATWAL VS. CIT (SUPRA), THEREFORE, NOTHING ELSE SURVIVES IN FA VOUR OF THE REVENUE TO LEVY THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 14. IN VIEW OF THE ABOVE, THERE IS NO MERIT IN THE APPEAL OF THE REVENUE, THE SAME IS ACCORDINGLY, DISMISSED. 15. SINCE, WE HAVE DISMISSED THE APPEAL OF THE REVE NUE IN ITA NO.349(ASR)/2015 FOR THE A.Y. 2007-08, THE REMAININ G THREE APPEALS OF THE REVENUE IN ITA NOS.350(ASR/2015, 404(ASR)/2015 & 3 39(ASR)/2015, ALL FOR THE ASSESSMENT YEARS 2007-08 ARE ALSO DISMISSED, AS THE ISSUE RELATING TO PENALTY IS EXACTLY SIMILAR, AS DECIDED BY US, HEREINABOVE I N ITA NO.349(ASR)/2015. 16. IN THE RESULT ALL THE FOUR APPEALS OF REVENUE AS WELL AS C.O. OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 /06/2016. SD/- SD/- (T. S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29/06/2016. /SKR/ COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEES:I) SMT.MOHINDER KAUR JOSH, HOSHIA RPUR (II)SH.SOHAN SINGH THANDAL, HOSHIARPUR (III)SH. TIKSHAN SOOD, HOSHIARP UR & (IV) ST. SATNAM SINGH KAINTH, NAWANSHAHAR. (2) THE ITO .WARD-2, HSPR, ACIT CIRCLE HSPR, IT O NAWANSHAHAR (3) THE CIT(A), JLR (4) THE CIT, JLR (5) THE SR DR, I.T.A.T. TRUE COPY 9 ITA NOS. 349, 350, 404 & 339(ASR)/2015 & C.O. NO.229ASR)/ 2015 :AY 2007-08 BY ORDER