Income Tax Officer-2(1), Lucknow V. Shri Ajeet Kumar Gupta, Lucknow

ITA 352/LKW/2012

• Counselvise Citation: 35223714 RSA 2012
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-01-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 28-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Section: 54F

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.352/LKW/2012 A.Y.:2004 - 05 INCOME TAX OFFICER - 2(1), LUCKNOW. VS. SHRI AJEET KUMAR GUPTA, PROP. RADHEY SONS, MIRZAGANG, MALIHABAD, LUCKNOW. PAN:ADGPG5200R (APPELLANT) (RESPONDENT) APPELLANT BY SHRI ALOK MITRA, D.R. RESPONDENT BY SHRI RAKESH GARG, ADVOCATE DATE OF HEARING 27/01/2014 DATE OF PRONOUNCEMENT 3 1 /01/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF LEARNED CIT ( A) - II, LUCKNOW DATED 09/04/2012 FOR ASSESSMENT YEAR 2004 - 05. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CANCELLING THE PENALTY U/S 271(1)(C) AMOUNTING TO RS.5,26,150/ - WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS RELATING TO THE COMPUTATION OF INCOME UNDER THE HEAD 'CAPITAL GAINS'. 2. THE LD. C IT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN FAILING TO APPRECIATE THAT THE ASSESSEE HAD DELIBERATELY SUPPRESSED THE FACT THAT THE SAID LAND WAS SITUATED WITHIN A DISTANCE OF 8 KMS. FROM THE MUNICIPAL LIMIT OF CITY AND THAT THIS FACT WAS DISCOVER ED BY THE A.O. 2 3. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUND OF APPEAL AS STATED ABOVE AS AND WHEN NEED OF DOING SO ARISES WITH THE PRIOR PERMISSION OF THE HON'BLE BENCH. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE PENALTY ORDER WHEREAS THE LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT ( A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF T HE AUTHORITIES BELOW. WE FIND THAT RETURN OF INCOME WAS FILED BY THE ASSESSEE SHOWING INCOME OF RS.4,88,640/ - INCLUDING RS.3,71,191/ - AS LONG TERM CAPITAL GAIN. THE LONG TERM CAPITAL GAIN WAS ASSESSED BY THE ASSESSING OFFICER AT RS.20,58,257/ - BY DISALLO WING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 54F AND BY DISALLOWING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 48 OF THE ACT. IN ADDITION TO THIS, THE ASSESSING OFFICER TREATED AN AMOUNT OF RS.1.15 LAC AS INCOME FROM OTHER SOURCES OUT OF AGRICULTURAL INCOME DISCLOSED BY THE ASSESSEE OF RS.5.40 LAC BECAUSE THE ASSESSING OFFICER ACCEPTED AGRICULTURAL INCOME AT RS.4.25 LAC ONLY AND TREATED THE BALANCE AMOUNT AS INCOME FROM OTHER SOURCES. AGAINST THESE TWO ADDITIONS, BY WAY OF INCOME FROM OTHER SOURCES A ND FOR CAPITAL GAIN , THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS AND IMPOSED PENALTY OF RS.5,26,150/ - . 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A), WHO HAS DELETED THE PENALTY AND NOW THE REVENUE IS IN A PPEAL BEFORE US. 6. WHILE DELETING THE PENALTY, IT IS NOTED BY CIT(A) THAT IT WAS THE CLAIM OF THE ASSESSEE IN QUANTUM PROCEEDING ALSO BEFORE THE CIT(A) THAT CAPITAL GAIN IN RESPECT OF THE SALE OF THE PROPERTY IS NOT TAXABLE BECAUSE THIS IS AGRICULTURAL L AND . IN PENALTY ORDER ALSO, IT IS NOTED BY THE ASSESSING OFFICER THAT ALTHOUGH THERE WAS NO ISSUE RAISED BEFORE HIM REGARDING CHARGEABILITY OF TAX BUT IN QUANTUM PROCEEDINGS BEFORE THE CIT(A) , IT WAS NOT RAISED BUT ACCEPTED BY THE 3 CIT(A) FOR THE REASON TH AT THE SAME WAS NOT RAISED IN COURSE OF ASSESSMENT PROCEEDINGS AND THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE TO SHOW THAT THE LAND CLAIMED AS AGRICULTURAL LAND IS OUTSIDE THE MUNICIPAL LIMIT. IN THE COURSE OF PENALTY PROCEEDINGS BEFORE THE CIT(A), THE A SSESSEE PRODUCED A CERTIFICATE FROM TEHSILDAR TO SHOW THAT THE LAND WAS SITUATED BEYOND A DISTANCE OF 8 KM FROM MUNICIPAL LIMIT. IT IS NOW A SETTLED POSITION OF LAW THAT PENALTY PROCEEDINGS ARE DISTANT PROCEEDINGS AND EVEN IF SOME EVIDENCE COULD NOT BE PR ODUCED IN COURSE OF QUANTUM PROCEEDINGS, THE SAME CAN BE PRODUCED IN COURSE OF PENALTY PROCEEDINGS. IN THE PRESENT CASE, THE ASSESSEE HAS PRODUCED EVIDENCE BEFORE THE CIT(A) THAT THE LAND IN QUESTION IS SITUATED BEYOND THE DISTANCE OF 8 KM. FROM THE MUNIC IPAL LIMIT. NO DEFECT COULD BE POINTED OUT BY THE REVENUE IN THIS CERTIFICATE OF TEHSILDAR. THE RELEVANT CERTIFICATE OF TEHSILDAR IS AVAILABLE IN THE PAPER BOOK ON PAGE NO. 39. UNDER THESE CIRCUMSTANCES, IT HAS TO BE ACCEPTED THAT ALTHOUGH SOME ADDITION HAS B EEN MADE IN THE CAPITAL GAIN OF THE ASSESSEE BUT PENALTY ON SUCH ADDITION IS NOT JUSTIFIED BECAUSE AS PER THIS EVIDENCE PRODUCED ON RECORD BY THE ASSESSEE IN COURSE OF PENALTY PROCEEDINGS BEING THE CERTIFICATE FROM TEHSILDAR, IT HAS TO BE ACCEPTED TH AT NO CAPITAL GAIN TAX IS PAYABLE IN RESPECT OF THIS SALE OF AGRICULTURAL LAND AND HENCE, NO PENALTY ON SUCH ADDITION IS JUSTIFIED IN RESPECT OF CAPITAL GAIN ALTHOUGH THE ADDITION STANDS FINAL . ONE MORE ADDITION WAS ALSO MADE ON WHICH PENALTY WAS IMPOSED I.E. ADDITION OF RS.1.15 LAC BY TREATING THE PART OF AGRICULTURAL INCOME A INCOME FROM OTHER SOURCES. IN THIS REGARD, IT IS NOTED BY CIT(A) THAT THE ASSESSEE AGREED FOR THE TREATMENT OF INCOME SHOWN AS AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES BUT THE EXPLANATION FURNISHED BY THE ASSESSEE HAS NOT BEEN FOUND TO BE FALSE BY THE ASSESSING OFFICER. HE HAS ALSO GIVEN FINDING THAT THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE IS ONE THING AND FINDING THAT THE EXPLANATION WAS FALS E IS QUITE A DIFFERENT THING. HE HAS FOLLOWED THE TRIBUNAL ORDER RENDERED IN THE CASE OF SMT. BRIJ BALA CHAWDHARY VS. INCOME TAX 4 OFFICER [2004] 82 TTJ 355 AND HELD THAT NO PENALTY IS LEVIABLE ON TREATMENT OF AGRICULTURAL INCOME SHOWN BY THE ASSESSEE AS IN COME FROM OTHER SOURCES AS THE CLAIM HAS NOT BEEN FOUND TO BE FALSE. THEREFORE, IN RESPECT OF THIS ADDITION ALSO, NO PENALTY IS JUSTIFIED. WE, THEREFORE, DECLINE TO INTERFERE IN THE ORDER OF CIT(A). 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 3 1 / 01/ 2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR