VIPUL A SAPANI, MUMBAI V. ITO 22(2)(4), MUMBAI

ITA 4278/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1996 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 16-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N V NADKARNI
• Assessee Lawyers: SANJIV M SHAH
• Keywords: Deemed to accrue or arise in india; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI BEFORE SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.4278/MUM/2014 ASSESSMENT YEAR: 2009-10 MR. VIPUL A. SAPANI, 605, NEW PURNIMA CHS, 60 FEET ROAD, GHATKOPAR (EAST), MUMBAI-400077. PAN: AACPS8611B VS. ITO 22(2)(4), MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANJIV M. SHA H REVENUE BY : MR. N.V. NADKARNI (DR) DATE OF HEARING : 17.12.2015 DATE OF PRONOUNCEMENT : 23.12.2015 O R D E R PER PAWAN SINGH, JM: 1. THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-33, MUMBAI DATED 24.03.2014 ARISING OUT OF ORDER OF PENALTY WH ICH WAS CONFIRMED BY THE CIT(A) IN ITS ORDER DATED 24.03.2014 IN RESPECT OF ASSESSM ENT YEAR (AY) 2009-10 ON THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A)-33 ERRED IN CONFIRMING THE PENALTY LEVIED U/ S 271(1)(C) OF RS 5,00,000/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A)-33 ERRED IN STATING THAT ASSESS HAD CLAIMED COST OF IMPROVEMENT KNOWING THE FACT THAT NO SUCH EXPENSES WERE INCURRE D AND ERRED IN IGNORING THE FACT THAT THE DOCUMENTS PERTAINING TO COST OF IMPRO VEMENTS WERE PERTAINING TO YEAR 1997-98 WHICH WAS ID YEARS BACK & HENCE WAS NO T AVAILABLE WITH ASSESSEE & THE VIEW OF THE ASSESSEE IS SUPPORTED BY RULE 6F OF THE INCOME TAX ACT,1961. 2 ITA NO. 4278/M/2014 MR. VIPUL A. SAPANI 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A)-33 ERRED IN IGNORING THE FACT THERE WAS NO C ONCEALMENT OF PARTICULARS OF INCOME OR INACCURATE PARTICULARS OF INCOME WERE FUR NISHED AS ALL THE DETAILS RELATED TO COST OF IMPROVEMENTS WERE DULY REFLECTED IN ANNUAL ACCOUNTS AND IT RETURN OF ALL YEARS AND WAS DULY SCRUTINIZED BY DEP ARTMENT IN VARIOUS YEARS. 4. EACH OF THE ABOVE GROUNDS BE CONSIDERED AS SEPAR ATE FROM THE OTHER GROUNDS. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 2. THE BRIEF FACT OF THE CASE ARE THAT THE ASSESSEE FI LED RETURN OF INCOME ON 31.07.2009 DECLARING TOTAL INCOME FOR RS. 2,53,754/-. THE RETU RN OF INCOME WAS SELECTED FOR SCRUTINY AND THE ASSESSING OFFICER (AO) MADE THE AD DITION OF RS. 2,60,210/- OF EXPENSES OF RS. 10,967/- ON ACCOUNT OF LONG TERM CA PITAL GAIN (LTCG). 3. THE AO FURTHER OBSERVED THAT ACTUAL COST OF PROPERT Y WAS RS. 26,38,350/- WHEREAS THE ASSESSEE HAS CLAIMED THAT RS. 33,35,500/- INCLUSIVE OF COST OF IMPROVEMENT. THE COST OF IMPROVEMENT OF RS. 7,47,150/- WAS DISALLOWED BY THE AO ON THE PRETEXT THAT NO DOCUMENTARY EVIDENCE PRESENTED, HENCE THE COST OF F LAT WAS TAKEN OF RS. 26,38,350/- AND INDEX COST OF ACQUISITION WAS TAKEN AT RS. 46,3 9,032/- AS AGAINST RS. 58,64,837/- CLAIMED BY ASSESSEE, THUS THE AO DETERMINED THE LTC G OF RS. 10,967/- AND FURTHER OBSERVED THAT SINCE THE ASSESSEE HAD LONG TERM CAPI TAL LOSS (LTCL) RELEVANT TO AY- 2002-03 AMOUNTING TO RS. 66,904/-, THE SAME WAS SET OF BALANCE LTCL OF RS. 55,937/- WAS ALLOWED TO BE CARRIED FOR FUTURE SET OF AND LEV IED PENALTY OF RS. 5,00,000/- FOR INCORRECT CLAIM OF COST OF IMPROVEMENT INCLUDING IN DEX COST OF IMPROVEMENT. 4. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AND THE CIT(A) UPHOLD THE PENALTY HOLDING THAT ASSESSEE IS GUILTY OF FURNISHING THE I NCORRECT PARTICULARS OF HIS INCOME IN TERM OF SECTION 271(1)(C) OF THE ACT,ON THE PRETEXT THAT ASSESSEE HAS FAILED TO PRODUCE BANK TRANSACTION SHOWING THE PAYMENT MADE BY THE AS SESSEE ON THE COST OF IMPROVEMENT AND THAT THE ASSESSEE COULD NOT JUSTIFY THE COST OF IMPROVEMENT BY WAY OF DOCUMENTARY EVIDENCE. 5. WE HAVE HEARD THE LD. AR OF THE ASSESSEE AND DEPART MENTAL REPRESENTATIVE (DR) FOR REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. 6. THE LD. AUTHORISED REPRESENTATIVE (AR) OF THE ASSES SEE HAS ARGUED THAT THE ASSESSEE HAS NEITHER CONCEALED NOR SUBMITTED ANY INCORRECT P ARTICULAR. 7. LD. AR OF THE ASSESSEE HAS DRAWN OUR ATTENTION TO P AGE NO. 106 OF THE PAPER BOOK FILED BEFORE US WHICH IS THE DETAILED OF ASSETS OF ASSE SSEE AS ON 31.03.2002, WHEREIN THE VALUE OF PROPERTY AT GHATKOPAR HAS BEEN SHOWN OF RS . 33,35,500/-, AGAIN FOR THE DETAIL OF FIXED ASSETS AS ON 31.03.2004, THE SAME HAS BEEN SHOWN AND AGAIN FOR THE CAPITAL ACCOUNT FOR THE YEAR ENDED ON 31.03.2006 THE PROPER TY AT GHATKOPAR IS SHOWN. 3 ITA NO. 4278/M/2014 MR. VIPUL A. SAPANI 8. IN THE AY-2006-07, THE ASSESSEE HAS SHOWN TWO HOUSE S IN RESPECT OF WHICH DEEMED INCOME WAS OFFERED BY THE ASSESSEE WAS ACCEPTED. TH E LD. AR OF THE ASSESSEE FURTHER DRAWN OUR ATTENTION TO PAGE NO. 75 OF PAPER BOOK WH ICH IS COPY OF AGREEMENT FOR SALE IN RESPECT OF PROPERTY ,WHEREIN THE SALE CONSIDERAT ION OF THE PROPERTY IS SHOWN AS RS. 46,50,000/- AND THE SAME WAS RECEIVED AS PER THE DE TAILED MENTIONED AT PAGE NO. 79 OF THE PAPER BOOK AND AS PER CLAUSE 4 OF THE AGREEMEN T, WHICH CLEARLY STIPULATE THAT THE TRANSFEROR (ASSESSEE) SHALL DELIVER THE VACANT AND PEACEFUL POSSESSION OF THE FLAT ALONG WITH THE PERMANENT FIXTURES AND FITTINGS ON COMP LETION OF THE SALE I.E. ON RECEIPT OF FULL CONSIDERATION. THE CLAUSE OF THE AGREEMENT TO SALE CLEARLY STIPULATE ABOUT THE PERMANENT FIXTURES AND FITTINGS IN THE FLAT WHICH W ERE OBVIOUSLY MADE BY THE ASSESSEE FOR WHICH THE ASSESSEE HAS OFFERED INCOME IN RESPEC T OF AY 2006-07 WHICH WAS DULY ACCEPTED BY THE AO, COPY OF THE ASSESSMENT ORDER FO R AY 2006-07 IS PLACED ON RECORD, THUS THE COST OF IMPROVEMENT CLAIMED BY ASS ESSEE WHICH WAS DISALLOWED BY THE AO CANNOT BE BASIS FOR MAKING OPINION ABOUT FUR NISHING INCORRECT PARTICULAR. 9. IN CIT VS RELIANCE PETROPRODUCTS PVT. LTD. REPORT ED VIZ. 322 ITR 158 THE HONBLE APEX COURT HAS HELD THAT IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE I NVOKED. BY ANY STRETCH OF IMAGINATION IN MAKING INCORRECT TREATMENT OF FURNI SHING INCORRECT PARTICULAR. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEN D UPON THE RETURN FILED BY ASSESSEE, I.E. BEFORE ONLY DOCUMENT WHERE ASSESSEE CAN FURNISH THIS PARTICULAR OF HIS INCOME WHERE PROPERTY ARE FOUND TO BE INACCU RATE, THE LIABILITY WOULD ARISE TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN T HE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT NOT IN ACCORDANCE TO THE TRUTH OR ERRONEOUS. MERE MAKING THE CLAIM WHICH IS SUSTAINABLE IN LAW, BY ITSELF, W ILL NOT AMOUNT TO FURNISH INACCURATE PARTICULAR REGARDING THE INCOME OF THE A SSESSEE. 10. THE ASSESSEE HAS SHOWN FROM HIS PAPER BOOK PLACED B EFORE US THAT THE ASSESSEE WAS SHOWING THE PROPERTY IN HIS BOOKS OF ACCOUNT/ASSETS CONSISTENTLY AND HAS OFFERED INCOME FROM THE PROPERTY WHICH HAS BEEN ACCEPTED BY THE REVENUE. 11. IN THESE CIRCUMSTANCES, WE HOLD THAT THERE WAS NO C ONCEALMENT OR INACCURATE PARTICULARS FURNISHED BY THE ASSESSEE TO THE AO WHI LE FILING THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR, AND THE ORDER OF AO F OR LEVYING THE PENALTY IS ILLEGAL AND NOT IN ACCORDANCE WITH LAW AS LAID DOWN BY HONBLE APEX COURT AND RELIANCE 4 ITA NO. 4278/M/2014 MR. VIPUL A. SAPANI PETROPRODUCTS PVT. LTD., HENCE THE LEVY OF PENALTY LEVIED BY THE AO AND SUBSEQUENTLY CONFIRMED BY THE CIT(A) IS DELETED. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DECEMBER 2015. SD/- SD/- (N.K.BILLAIYA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 23/12/2015 S.K.PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. !'# / GUARD FILE. $ //TRUE COPY/