The Income Tax Officer, Dasuya V. Sh balbir Singh Miani S/o Sh. Lakh Singh, Hoshiarpur

ITA 354/ASR/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8801 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 16-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 03-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKARDR
• Assessee Lawyers: J K PASSI
• Section: 54F; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: (CIRCUIT BENCH AT JALANDHAR) BEFORE SHRI A. D. JAIN, JUDICIAL MEMBER, AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO. 354/ASR/2015 (ASSESSMENT YEAR-2007-08) ITO , DASUYA. (REVENUE) VS .. SHRI BALBIR SINGH MIANI S/O SH. LAKHI SINGH, VPO LAKHINDER SINGH, TEHSIL DASUYA, DISTT. HOSHIARPUR. PAN NO.ACQPC5590B (ASSESSEE) REVENUE BY SHRI BHAWANI SHANKAR,DR. ASSESSEE BY SHRI . J. K. PASSI, AR. ORDER PER, A. D. JAIN, JUDICIAL MEMBER: THIS IS DEPARTMENTS APPEAL FOR ASSESSMENT YEAR 200 7-08, AGAINST THE CIT(A)S ACTION OF DELETING THE CONCEALMENT PENALTY OF RS.36,42,369/-, LEVIED ON THE ASSESSEE. 2. THE BRIEF FACTS AS PER THE RECORD ARE THAT THE A SSESSEE WAS A MEMBER OF HOUSING SOCIETY OF MLAS AND EX-MLAS, CALLED PUNJABI CO-OPERATIVE HOUSING BUILDING SOCIETY LTD., MOHALI WHICH WAS THE OWNER O F 21.2 ACRES OF LAND IN VILLAGE DATE OF HEARING 16.01.2017 DATE OF PRONOUNCEMENT 20 .01.2017 I.T.A NO. 354/ASR/2015 2 KANSAL, DISTRICT MOHALI. THIS SOCIETY ENTERED INTO A TRIPARTITE JOINT DEVELOPMENT AGREEMENT ON 24.02.2007 WITH M/S HASH BUILDERS (P.) LTD, CHANDIGARH AND M/S TATA HOUSING DEVELOPMENT COMPANY LTD., MUMBAI . BY VIRTUE OF THIS AGREEMENT, THE SOCIETY WOULD TRANSFER ITS LAND FOR DEVELOPMENT IN LIEU OF MONETARY CONSIDERATION AND ALSO CONSIDERATION IN KIND TO THE MEMBERS OF THE SOCIETY. THE ASSESSEE WAS OWNING 500 SQ. YARDS OF LAND IN THE SO CIETY. THE TOTAL CONSIDERATION WAS SETTLED AT RS.82,50,000/- PLUS ALLOTMENT OF ONE FLAT OF 2250 SQ. FT. TO THE ASSESSEE, OUT OF WHICH, THE ASSESSEE HAD RECEIVED R S.15 LACS IN FEBRUARY, 2007. ANOTHER PAYMENT OF RS.18 LACS WAS RECEIVED BY THE A SSESSEE IN APRIL, 2007. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE YEAR UN DER CONSIDERATION, DECLARING THEREIN, INCOME OF RS.1,57,578/- PLUS AGRICULTURAL INCOME OF RS.7.50 LACS. THEREAFTER, ON RECEIPT OF INFORMATION IN CONNECTION WITH NON DECLARATION OF LONG TERM CAPITAL GAINS ON THE SALE/TRANSFER OF THE PLOT OF THE ASSESSEE BY THE SOCIETY ON BEHALF OF ITS MEMBERS TO M/S HASH BUILDERS (P.) LTD . CHANDIGARH AND M/S TATA HOUSING DEVELOPMENT COMPANY LTD., MUMBAI, THE AO RE OPENED THE ASSESSMENT IN THE CASE OF THE ASSESSEE BY ISSUANCE OF A NOTICE U/S 148 OF THE ACT ON 22.12.2009, STATED TO HAVE BEEN SERVED ON THE ASSESSEE ON 07.01 .2010, DECLARING THE SAME INCOME/AGRICULTURAL INCOME, AS DECLARED BY HIM IN T HE ORIGINAL RETURN OF INCOME. THE AO NOTICED THAT AS PER THE AGREEMENT, EACH OF T HE MEMBERS OF THE SOCIETY, INCLUDING THE ASSESSEE, WAS TO RECEIVE RS.82.50 LAC S IN CASH AND A FURNISHED FLAT MEASURING 2250 SQ. FT., WITH MARKET VALUE OF RS.1,0 1,25,000/-, CALCULATED @ I.T.A NO. 354/ASR/2015 3 RS.4,500/- PER SQ. FT. THUS, THE TOTAL CONSIDERATIO N FOR TRANSFER OF THE PLOT CAME TO RS.1,83,75,000/-. THE AO COMPUTED THE INCOME OF THE ASSESSEE BY WAY OF CAPITAL GAINS BY ADOPTING THIS AMOUNT AS SALE CONSIDERATION . THE ASSESSMENT WAS COMPLETED AT AN ASSESSED INCOME OF RS.1,79,17,320/- WHICH INCLUDED LONG TERM CAPITAL GAINS OF RS.1,77,59,742/-. THE DEDUCTION CL AIMED BY THE ASSESSEE U/S 54F OF THE IT ACT WAS DENIED FOR NON FULFILLMENT OF THE SP ECIFIED CONDITIONS. THE LD. CIT(A), VIDE ORDER DATED 29.03.2011, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO WITH REGARD TO TAXABILITY OF LONG TERM CAPITAL GAIN. HOWEVER, HE ALLOWED DEDUCTION U/ S 54F OF THE ACT TO THE EXTENT OF RS.15,26,000/-. DEDUCTION IN RESPECT OF DEPOSIT OF RS.18 LAC WAS NOT ALLOWED. THE ITAT, AMRITSAR BENCH, VIDE ORDER DATED 19.08.20 13, DISMISSED THE ASSESSEES APPEAL. THE ASSESSEES APPEAL AGAINST THE SAID TRIB UNAL ORDER HAS SINCE BEEN ALLOWED BY THE HONBLE PUNJAB AND HARYANA HIGH COUR T. 3. IN THE PENALTY PROCEEDINGS, VIDE ORDER DATED 07. 02.2013, PASSED U/S 271(1)(C) OF THE ACT, THE AO LEVIED PENALTY OF RS.3 6,42,369/-, FOR ALLEGEDLY CONCEALING AND FILING INACCURATE PARTICULARS OF INC OME IN RESPECT OF LONG TERM CAPITAL GAIN. THE LD. CIT(A), VIDE THE IMPUGNED ORD ER DATED 01.04.2015, DELETED THE PENALTY. 4. AGGRIEVED, THE DEPARTMENT IS IN APPEAL. 5. THE LD. DR HAS CONTENDED THAT THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY RIGHTLY IMPOSED BY THE AO, FAILING TO APPRE CIATE THAT THE ADDITION ON WHICH I.T.A NO. 354/ASR/2015 4 THE PENALTY WAS IMPOSED, WAS MADE BY THE AO ON THE BASIS OF THE FACTS GATHERED DURING THE ASSESSMENT PROCEEDINGS. 6. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE HAS STRONGLY SUPPORTED THE IMPUGNED ORDER. 7. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE M ATERIAL ON RECORD. WHILE DELETING THE PENALTY, THE LD. CIT(A) HAS HELD AS FO LLOWS: 5.4 ON CAREFUL CONSIDERATION OF THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT AND EXPLANATION 1 TO SECTION 271(1)(C) O F THE ACT, I AM OF THE OPINION THAT THE PENALTY FOR CONCEALMENT CAN BE LEVIED WHEN THE ASSESSEE HAS EITHER CONCEALED THE PARTICULARS OF HI S INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME OR I S NOT ABLE TO GIVE ANY SATISFACTORY EXPLANATION IN REGARD TO ANY MATTE R WHICH IS MATERIAL TO THE COMPUTATION OF HIS INCOME. NOW WE EXAMINE TH E FACTS OF THE CASE OF THE ASSESSEE IN ABOVE CONTEXT. IT IS NOTEWO RTHY THAT THE VIEW TAKEN BY THE ASSESSING OFFICER THAT THE AMOUNT OF L ONG TERM CAPITAL GAINS HAS TO BE COMPUTED BY TAKING THE TOTAL CONSID ERATION, ACTUALLY RECEIVED OR RECEIVABLE BY THE APPELLANT TOWARDS SAL E CONSIDERATION AND THAT THE TOTAL AMOUNT OF LONG TERM CAPITAL GAIN S IS ASSESSABLE AS THE INCOME OF THE YEAR UNDER, APPEAL HAS BEEN UPHEL D BY THE HONORABLE JURISDICTIONAL TRIBUNAL. THEREFORE, THE L IMITED POINT FOR CONSIDERATION IS WHETHER THE APPELLANT HAS A REASON ABLE EXPLANATION FOR HIS OMISSION TO DISCLOSE THE INCOME BY WAY OF L ONG TERM CAPITAL GAINS IN THE RETURN. IN THE RETURN FILED ON 30.07.2 007 I.E. BEFORE THE ISSUE OF NOTICE UNDER SECTION 148, THE APPELLANT HA D DISCLOSED THE FACTS RELATING TO TRANSFER OF HIS PLOT AT CHANDIGARH AS U NDER:- I.T.A NO. 354/ASR/2015 5 SOLD PLOT AT CHANDIGARH ALLOTTED BY PUNJABI COOP. HOUSE BUILDING SOCIETY LTD. MOHALI TO MLA, 21.2 ACR ES TO TATA & HASH & TODC FOR RS.82,50,000/-. GAIN WILL BE INVESTED IN PURCHASE OF RESIDENTIAL HOUSE. IN VIEW OF THE ABOVE NOTE, THE ASSESSEE HAS NOT DIS CLOSED ANY INCOME FROM LONG TERM CAPITAL GAINS ON THE SALE OF HIS PLO T. IN MY OPINION, THE ASSESSEE HAS FULLY DISCLOSED THE FACTS RELATING TO SALE OF HIS PLOT AND HAS NOT DISCLOSED ANY LONG TERM CAPITAL GAINS AS HE WAS TO CONSTRUCT A NEW RESIDENTIAL HOUSE AND CLAIM DEDUCTION UNDER SEC TION 54F OF THE ACT. NOT ONLY THIS, THE ASSESSEE HAS ALSO DEPOSITED RS. 15,26,000/- IN THE CAPITAL GAINS SCHEME BEFORE FILING HIS RETURN O F INCOME. IT IS ALSO AN UNDISPUTED FACT THAT THERE WERE CERTAIN CONTROVE RSIES AND DISPUTES WITH REGARD TO TRANSFER OF PLOT. IN FACT, I UNDERST AND THAT THE VARIOUS ISSUES HAVE STILL NOT BEEN RESOLVED AND THE CONSTRU CTION OF THE BUILDING, IN WHICH THE APPELLANT WAS TO GET AS A PA RT OF SALE CONSIDERATION, HAS NOT STARTED TILL DATE. IN THESE PARTICULAR FACTS AND IN THE CIRCUMSTANCES, THE BELIEF OF THE APPELLANT THAT THE LONG TERM CAPITAL GAINS, ON WHICH HE HAS TO PAY TAX, HAS TO B E COMPUTED ONLY ON THE BASIS OF THE AMOUNT WHICH HAS ACTUALLY BEEN REC EIVED BY HIM IN CASH, CANNOT BE CONSIDERED TO BE TOTALLY UNREASONAB LE, THOUGH IT IS NOT STRICTLY LEGAL. THE FACT THAT ALL THE MATERIAL FACT S WHICH WERE REQUIRED TO COMPUTE THE LONG TERM CAPITAL GAINS ALTHOUGH INC ORRECTLY WERE FURNISHED BY THE APPELLANT IN HIS RETURN FILED ON 3 0.07.2007, ESTABLISH HIS BONAFIDE CREDENTIALS. 5.5 IN VIEW OF THE ABOVE STATED FACTS AND IN THE CI RCUMSTANCES OF THE CASE AND IN VIEW OF THE DISCUSSION MADE IN THE PREC EDING PARAGRAPHS, IT IS HELD THAT THE ASSESSING OFFICER IS NOT JUSTIF IED IN LEVYING PENALTY OF RS.36,42,369/- IN THIS CASE UNDER SECTION 271(L)(C) OF THE ACT FOR CONCEALING AND FILING INACCURATE PARTICULARS OF INC OME. THE PENALTY OF I.T.A NO. 354/ASR/2015 6 RS.36.42,369/- LEVIED BY THE ASSESSING OFFICER IN T HIS CASE UNDER SECTION 271(L)(C) OF THE ACT IS, THEREFORE, DIRECTE D TO BE DELETED. IN THE RESULT, THE GROUNDS NO. 1 AND 2 OF APPEAL TAKEN BY THE ASSESSEE ARE ALLOWED. 8. IT IS SEEN THAT IN THE ORIGINAL RETURN FILED BY THE ASSESSEE, THE ASSESSEE HAS STATED TO HAVE SOLD THE PLOT BY THE SOCIETY, MEASUR ING 21.2 ACRES, TO M/S TATA HOUSING DEVELOPMENT COMPANY LTD., MUMBAI AND M/S HA SH BUILDERS PVT. LTD., CHANDIGARH, AND TODC, FOR A SUM OF RS.82.50 LACS, A ND THAT THE GAIN WOULD BE INVESTED IN THE PURCHASE OF RESIDENTIAL HOUSE. AS S UCH, THE ASSESSEE HAD NOT DISCLOSED ANY INCOME FROM LONG TERM CAPITAL GAIN. T HE ASSESSEE, THEREFORE, AS CORRECTLY TAKEN INTO CONSIDERATION BY THE LD. CIT(A ), HAD FULLY DISCLOSED IN HIS RETURN OF INCOME ORIGINALLY FILED, ALL THE FACTS RE LATING TO THE SALE OF HIS PLOT AND HAD NOT DECLARED ANY LONG TERM CAPITAL GAIN ON SUCH SAL E, SINCE HE HAD STATED THAT HE WAS TO INVEST THE SAME IN THE PURCHASE OF RESIDENTI AL HOUSE. FURTHER, THE ASSESSEE HAD ALSO DEPOSITED A SUM OF RS.15,26,000/- IN THE C APITAL GAINS SCHEME BEFORE FILING HIS RETURN OF INCOME. THE TRANSFER OF THE PL OT BEING CLOUDED IN CONTROVERSY, THE CONSTRUCTION OF THE BUILDING IN WHICH THE ASSES SEE WAS TO GET A PART OF THE SALE CONSIDERATION, HAD NOT HITHERTO STARTED. THUS, OBVI OUSLY, THE BELIEF OF THE ASSESSEE THAT THE LONG TERM CAPITAL GAIN, ON WHICH TAX WOULD HAVE TO BE PAID, WAS REQUIRED TO BE COMPUTED ONLY ON THE BASIS OF THE AM OUNT ACTUALLY RECEIVED BY HIM IN CASH, CANNOT BE SAID TO BE A MALAFIDE BELIEF. SI NCE ALL THE MATERIAL FACTS STOOD I.T.A NO. 354/ASR/2015 7 DULY DISCLOSED BY THE ASSESSEE, THE BONAFIDES OF TH E ASSESSEE CANNOT BE CALLED IN QUESTION. 9. THE ABOVE FACTS AND CIRCUMSTANCES, IN OUR CONSID ERED OPINION, HAVE CORRECTLY BEEN TAKEN INTO CONSIDERATION BY THE LD. CIT(A) AND THE PENALTY LEVIED ON THE ASSESSEE HAS RIGHTLY BEEN DELETED. 10. WE FIND NO DISCREPANCY IN THE ORDER UNDER APPEA L, FOR THE ABOVE DISCUSSION AND THE GRIEVANCE OF THE DEPARTMENT IN THIS REGARD IS FOUND TO BE UNJUSTIFIED. THE SAME IS, ACCORDINGLY, REJECTED. 11. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/01/2017. SD/- SD/- (T. S. KAPOOR) (A.D. JAIN) ACCOUTANT MEMBER JUDICIAL MEMBER DATED 20 /01/2017 *AKV* ON TOUR COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT BY ORDER AR/SR.P.S./P.S.