M/s. MAFATLAL INDUSTRIES LTD., MUMBAI V. DCIT 6(3), MUMBAI

ITA 3576/MUM/2005

• Counselvise Citation: 357619914 RSA 2005
• Duration Of Justice: 6 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-01-2010
• Assessment Year: 1996-1997
• Appeal Filed On: 12-05-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T D SINGH
• Assessee Lawyers: PRAKASH PANDIT
• Keywords: Additional evidence
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ITA NO. 3576/MUM/2005 ASSESSMENT YEAR: 2005-2006 MRS. SUNITA S. SANGALE, FLAT NO.502, PASAYADAN HOUSING SOCIETY, PLOT NO.85, SECTOR-29, VASHI, NAVI MUMBAI 400 703 . PAN: AAZPS8061Q VS. DCIT 22(3), VASHI, NAVI MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PRAKASH PANDIT , A.R. RESPONDENT BY : SHRI T.D. SINGH, D.R. O R D E R PER PRAMOD KUMAR: 1. THE SHORT ISSUE THAT WE ARE REQUIRED TO ADJUDIC ATE IN THIS APPEAL IS WHETHER OR NOT LD. CIT (A) WAS JUSTIFIED IN UPHOLDI NG THE PENALTY OF RS. 2,58,320/-. THE ASSESSMENT YEAR INVOLVED IS 2005-2 006 AND IMPUGNED PENALTY IS LEVIED U/S 271(1)(C) OF THE INCOME TAX A CT, 1961. 2. THE RELEVANT MATERIAL FACTS ARE AS FOLLOWS. THE ASSESSEE IS AN INDIVIDUAL, AND, DURING THE RELEVANT PREVIOUS YEAR, SHE SOLD A FLAT LOCATED AT SUDERSHAN SOCIETY, VASHI, NAVI MUMBAI. OUT OF THE TAXABLE CAPITAL GAINS ON THIS SALE OF FLAT, ASSESSEE CLAIMED REINVESTMENT OF RS.6,08,800/-. IN THE SCRUTINY ASSESSMENT PROCEEDINGS, ASSESSING OFFICER TOOK NOTE OF THIS INVESTMENT WAS CLAIMED A DEDUCTION IN COMPUTATION O F CAPITAL GAIN. THE ITA NO 3576 A.Y. 2005-06 2 EVIDENCE OF THIS INVESTMENT SHOWED THE PAYMENT OF R S. 6,08,800/- AS TOWARDS DEVELOPMENT CHARGES PAID TO KRYPTON & CO., WHO ARE LANDLORDS IN RESPECT OF PROPERTY SITUATED AT SULTAN MANSION, NEW PRABHADEVI ROAD, MUMBAI. THE ASSESSING OFFICER REJECTED THIS CLAIM FOR MERE REASONS THAN ONE FIRSTLY, NO HOUSE HAS BEEN ACQUIRED OR CONSTR UCTED WHICH IS A CONDITION PRECEDENT FOR ALLOWING CLAIM U/S 54; - SE CONDLY, THE ASSESSEE HAS ANYWAY NOT SPENT THIS AMOUNT OR PURCHASE OR CONSTRU CTION OF THIS HOUSE IN AS MUCH AS THE PAYMENT IS STATED TO HAVE BEEN MADE FOR BEING ACCEPTED AS LAWFUL TENANT; AND FINALLY, THE ASSESSEE HAS NOT FILED ANY EVIDENCE TO DEMONSTRATE THAT PROPERTY HAS BEEN ACQUIRED WITHIN SPECIFIED PERIOD. THE CLAIM OF DEDUCTION WAS THUS DECLINED. THE MATTER DI D NOT REST THERE. THE ASSESSEE WAS ALSO IMPOSED PENALTY U/S 271(1)(C) FOR MAKING INACCURATE CLAIM OF DEDUCTION UNDER SECTION 54. THERE WAS ALS O A DISCREPANCY IN THE AMOUNT OF BANK INTEREST OFFERED TO TAX. THIS AMOUN T OF RS. 2,919/- WAS ALSO BROUGHT TO TAX. THE ADDITIONS SO MADE BY THE ASSES SING OFFICER WERE NOT CHALLENGED IN APPEAL AND RECEIVED FINALLY. 3. THE MATTER, HOWEVER, DID NOT REST THERE. THE AS SESSING OFFICER ALSO IMPOSED PENALTIES IN RESPECT OF THESE QUANTUM ADDIT IONS AND HELD THAT THE ASSESSEE MADE FRAUDULENT AND INACCURATE CLAIMS. AG GRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT (A) BUT WITHOUT ANY SUCCESS. NOT SATISFIED, THE ASSESSEE IS IN FURTHER APPEAL BE FORE US. ITA NO 3576 A.Y. 2005-06 3 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS A LSO THE APPLICABLE LEGAL POSITION. 5. WE FIND THAT THE ASSESSEE HAS MOVED A PETITION F OR ADMISSION OF ADDITIONAL EVIDENCE. THE ADDITIONAL EVIDENCE SOUGH T TO BE ADMITTED BY US INCLUDES A COPY OF SALE AGREEMENT DATED 6 TH DECEMBER, 2007 BETWEEN THE ASSESSEE AND KRIPTON & CO. THIS AGREEMENT SHOWS TH AT THE ASSESSEE HAD PAID RS. 6,08,800/- TOWARDS PURCHASE OF ADDITIONAL AREA OF 59.10 METERS. IT IS THUS CONTENDED THAT THERE IS MATERIAL ON RECORD TO DEMONSTRATE THAT ASSESSEE WAS ENTITLED TO CLAIM U/S 54 WHICH COULD N OT BE PRESSED AT THE ASSESSMENT STAGE AS RELEVANT DOCUMENTS COULD NOT BE PRODUCED AT THE POINT OF TIME. A COPY OF THESE DOCUMENTS WAS ALSO FURNIS HED WITH LEARNED DEPARTMENTAL REPRESENTATIVE. 6. HAVING REGARD WITH FACT THAT ADDITIONAL EVIDENCE SO FILED BY THE ASSESSEE IS VERY USEFUL IN ADJUDICATING UPON ISSUE IN APPEAL BEFORE US, AND HAVING HEARD THE RIVAL CONTENTIONS IN THE SAME, WE ARE INCLINED TO ADMIT THE SAME. THE ADDITIONAL EVIDENCE IS, ACCORDINGLY, ADM ITTED. 7. A PLAIN READING OF THE AGREEMENT INDICATES THAT THE ASSESSEE HAD PAID RS. 6,08,800/- FOR PURCHASE OF 59.10 SQ. METER CARP ET AREA IN FLAT NO. 1001, IN ADDITION TO THE FREE AREA ALLOTTED TO HIM IN LIE U OF SURRENDERING TENANCY RIGHTS. THE CLAIM MADE BY THAT ASSESSEE, THEREFORE , WAS NOT A FRIVOLOUS OR FRAUDULENT CLAIM IRRESPECTIVE OF ITS ADMISSIBILI TY ON MERITS. RIGHT NOW, WE ITA NO 3576 A.Y. 2005-06 4 ARE NOT EXAMINING THE ADMISSIBILITY OF CLAIM ON MER ITS AND WE MUST, THEREFORE, DESIST FROM MAKING ANY OBSERVATIONS ON M ERITS. SUFFICE TO SAY THAT ASSESSEE HAD REASONABLE BASIS FOR MAKING A CLA IM, AND THE MERE FACT THAT THE ASSESSEE DID NOT AGITATE AGAINST DENIAL OF THIS CLAIM OR THAT ASSESSEE COULD NOT SUBSTANTIATE THE CLAIM DURING ASSESSMENT PROCEEDINGS, CANNOT BE PUT AGAINST THE ASSESSEE IN PENALTY PROCEEDINGS. I N THIS VIEW OF THE MATTER, THIS WAS INDEED NOT A FIT CASE FOR IMPOSITION OF PE NALTY U/S 272(1)(C). SIMILARLY, SO FAR AS ADDITION OF RS. 2,919/- IN RES PECT OF INTEREST IS CONCERNED, WE FIND IT IS A SMALL AMOUNT AND THE MIS TAKE IS SEEMINGLY OF CLERICAL NATURE. THE EXPLANATION GIVEN BY THE ASSE SSEE, TO THE EFFECT THAT IT WAS AN ADVERTENT ERROR, DESERVES TO BE ACCEPTED. I N VIEW OF THESE DISCUSSIONS AND BEARING IN MIND ENTIRETY OF THE CAS E, WE UPHOLD THE GRIEVANCE OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO DELETE IMPUGNED PENALTY OF RS. 2,58,320/-. THE ASSESSEE GE TS THE RELIEF ACCORDINGLY. 8. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE, 2011. SD/- SD/- V. DURGA RAO PRAMOD KUMAR JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 30 TH JUNE, 2011. OKK* ITA NO 3576 A.Y. 2005-06 5 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- XXV, MUMB AI 4. COMMISSIONER OF INCOME TAX, CONCERNED 5. DEPARTMENTAL REPRESENTATIVE, BENCH J, MUMBAI TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI