Asstt. Commissioner of Income Tax-4, Kanpur V. M/s Lohia Starlinger Ltd., Kanpur

ITA 42/LKW/2014

• Counselvise Citation: 4223714 RSA 2014
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 09-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 20-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P SRIVASTA VA
• Assessee Lawyers: S K JAIN C A SHRI SWARN SINGH
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C; 14A

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.42/LKW/2014 ASSESSMENT YEAR:2008 - 09 A.C.I.T. - 4, KANPUR. VS. M/S LOHIA STARLINGER LTD., D - 3/4, PANKI INDUSTRIAL ESTATE, KANPUR. PAN:AAACL2470J (APPELLANT) (RESPONDENT) APPELLANT BY SHRI Y. P. SRIVASTAVA, D. R. RESPONDENT BY SHRI S. K. JAIN, C.A. SHRI SWARN SINGH, C.A. DATE OF HEARING 09/07/2014 DATE OF PRONOUNCEMENT 2 1 /08/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT (A) - II, KANPUR DATED 14/10/2013 FOR ASSESSMENT YEAR 2008 - 2009. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY IMPOSED U/S 271(L)(C) OF RS.29,60,000/ - FOR CONCEALMENT OF INCOME OR FILING OF INACCURATE PARTICULARS OF INCOME WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS MATERIAL AV AILABLE ON RECORDS. 2. THE LD. CIT(A) IS IN ERROR IN FAILING TO APPRECIATE THAT AS PER THE LAW THE ASSESSEE WAS REQUIRED TO COMPUTE ITS CAPITAL GAINS AS MANDATED BY SECTION 50C AND DOING OTHERWISE S HOWED THAT INACCURATE PARTICULARS OF INCOME HAD BEEN FILE D DELIBERATELY. 3. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY BY TAKING A VIEW THAT THE REVENUE HAS NOT BROUGHT 2 ON RECORD ANY EVIDENCE REGARDING ACTUAL RECEIPT OF THE AMOUNT OVER AND ABOVE WHAT HAS BEEN SHOWN AS SALE CONSIDERATION BY THE SELLER, WHEREAS THE PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT ARE DEEMING IN NATURE AND DO NOT PRESCRIBE FOR SUCH ACTUAL RECEIPT OR PAYMENT TO BE PROVED. 4. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY IMPOSED U/S 271( 1 )(C) OF THE I . T. ACT, 1961 OF RS.29,60,000/ - WHICH ALSO COVERED PENALTY ON DISALLOWANCES MADE U/S 14A FOR WHICH NO SPECIFIC FINDING HAS BEEN GIVEN SEPARATELY IN HIS DECISION AND SIMPLY RELIED ON THE SUBMISSION MADE BY THE ASSESSEE WHEREAS THE ASSESSEE FILED THE RE - COMPUTATION FOR EXPENSES DISALLOWABLE U/S 14A READ WITH RULE 8D DURING THE ASSESSMENT PROCEEDINGS AND WAS NOT VOLUNTARY IN NATURE . 5. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN ACCEPTING THE ARGUMENT OF INADVERTENT ERROR FAILING TO APPRECIATE THAT TH E ASSESSEE IS A COMPANY THAT IS PROFESSIONALLY ADVISED. 6. THE ORDER OF THE CIT (A), KANPUR BEING ERRONEOUS, UNJUST AND BAD IN LAW BE VACATED AND THE ORDER OF THE AO BE RESTORED. 7. THAT THE APPELLANT CRAVES LEAVE TO MODIFY ANY OF THE GROUNDS OF APPEAL O R TAKE ADDITIONAL GROUND DURING THE PENDENCY OF THIS APPEAL. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE PENALTY ORDER WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF CIT(A). HE ALSO PLACED RELIANCE ON THE JUDGMENT OF HON'BLE CALCUTTA HIGH COURT RENDERED IN THE CASE OF CIT VS. MADAN THEATRES LTD. [2013] 2 60 CTR 75. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT ALTHOUGH VARIOUS ADDITIONS WERE MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT BUT IN QUANTUM APPEAL, CIT(A) HAS CONFIRMED ONLY TWO ADDITIONS BEING RS.67,41,156/ - IN RESPECT OF ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN AND RS.19,30,014/ - ON ACCOUNT OF ADDITION U/S 14A OF THE ACT. IN RESPECT OF BOTH 3 THESE ADDITIONS, THE ASSESSING OFFICER IMPOSED PENALTY OF RS.40 LAC S . WHEN THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A), THE PENALTY W AS DELETED BY CIT(A) AND NOW THE REVENUE IS IN APPEAL BEFORE US. REGARDING THE PENALTY IMPOSED BY ASSESSING OFFICER IN RESPECT OF ADDITION IN RESPECT OF LONG TERM CAPITAL GAIN, THE CIT(A) HAS FOLLOWED THE JUDGMENT OF HON'BLE CALCUTTA HIGH COURT IN THE CAS E OF MADAN THEATRES LTD. (SUPRA). IN THAT CASE, IT WAS HELD BY HON'BLE CALCUTTA HIGH COURT THAT WHEN THE ADDITION IS MADE BY INVOKING THE PROVISIONS OF SECTION 50C WITHOUT BRINGING ANY EVIDENCE ON RECORD THAT THE ASSESSEE ACTUALLY RECEIVED MORE AMOUNT THA N SHOWN BY IT, PENALTY IS NOT JUSTIFIED. IN THE PRESENT CASE ALSO, THE ADDITION H AS BEEN MADE BY THE ASSESSING OFFICER MERELY BY INVOKING THE PROVISIONS OF SECTION 50C AND NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY HIM THAT ANY MONEY IN ADDITION TO DECLARE D SALE PROCEEDS WAS RECEIVED BY THE ASSESSEE AND HENCE, RESPECTFULLY FOLLOWING THIS JUDGMENT OF HON'BLE CALCUTTA HIGH COURT, WE HOLD THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF CIT(A) ON THIS ISSUE. 5. NOW WE FIND THAT ALTHOUGH CIT(A) HAS DELETED T HE TOTAL PENALTY IMPOSED BY THE ASSESSING OFFICER OF RS.40 LAC S , AS PER GROUNDS OF APPEAL FILED BY THE REVENUE, THE GROUND RAISED BY THE REVENUE ARE IN RESPECT OF DELETION OF PENALTY OF RS.29.60 LAC S . IN THE PENALTY ORDER, THE ASSESSING OFFICER HAS WORKE D OUT THAT IN RESPECT OF TOTAL ADDITION OF RS.86,71,170/ - , MINIMUM PENALTY IMPOSABLE IS RS.26,01,351/ - AND MAXIMUM PENALTY IMPOSABLE IS RS.78,10,053/ - AND HE IMPOSED PENALTY OF RS.40 LAC S . OUT OF TOTAL ADDITION OF RS.86.71 LAC S , THE ADDITION MADE BY ASSES SING OFFICER IN RESPECT OF LONG TERM CAPITAL GAIN IS RS.67.41 LAC S WHICH MEANS THE ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN IS AROUND 77.74% OF TOTAL ADDITION. HENCE, IN THE SAME PROPORTION, THE PENALTY IN RESPECT OF ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN IS AROUND RS.31 LAC. HENCE, IN OUR CONSIDERED OPINION, AS PER GROUNDS OF APPEAL, THE REVENUE I S DISPUTING ONLY IN RESPECT OF DELETION OF PENALTY IMPOSED BY THE ASSESSING OFFICER FOR ADDITION MADE U/S 50C ALTHOUGH IN 4 GROUND NO. 4, THE REVENUE IS STATING THAT THIS PENALTY OF RS.29.60 LAC S ALSO INCLUDED PENALTY IN RESPECT OF DISALLOWANCE U/S 14A. BUT IN OUR CONSIDERED OPINION, SINCE THE PENALTY IMPOSABLE IN RESPECT OF LONG TERM CAPITAL GAIN IS AROUND RS.31 LAC S , IT HAS TO BE ACCEPTED THAT THE RE VENUE IS DISPUTING THE DELETION OF PENALTY IMPOSED BY THE ASSESSING OFFICER IN RESPECT OF ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN ONLY . THIS ASPECT OF PENALTY IS COVERED IN FAVOUR OF THE ASSESSEE AND HENCE, RESPECTFULLY FOLLOWING THE JUDGMENT OF HON 'BLE CALCUTTA HIGH COURT IN THE CASE OF MADAN THEATRES LTD. (SUPRA), WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A). 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTI ON PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 1 /08/2014. *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