SITADEVI MITTAL, MUMBAI V. DCIT CEN CIR 47, MUMBAI

ITA 442/MUM/2013

• Counselvise Citation: 44219914 RSA 2013
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: E
• Next Hearing Date: 22-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 15-01-2013
• Court: TRIBUNAL
• Department Lawyers: MANJUNATHA SWAMY; N Y NADIK ARNI
• Assessee Lawyers: NATANSHA MAN GAT; PRIYANKA MARU
• Keywords: Capital asset

Judgement Text

, E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . . , , ! '# $ %, & ' BEFORE SHRI B.R. BASKARAN, AM AND SHRI AMIT SHUKLA, JM . / ITA NO.442 /MUM/2013 ( / ASSESSMENT YEAR : 2008-09 ) SMT. SITADEVI MITTAL, 16 TH FLOOR, MITTAL TOWERS, 210, NARIMAN POINT, MUMBAI-400 021 .. / APPELLANT V/S DCIT CEN CIR 47 AAYAKAR BHAVAN MUMBAI .... / RESPONDENT . / PERMANENT ACCOUNT NUMBER AAGPM3813K APPELLANT BY : MS. PRIYANKA MARU & NATANSHA MAN GAT (AR) REVENUE BY : SHRI MANJUNATHA SWAMY & N.Y. NADIK ARNI (DR) ! ' #$ / DATE OF HEARING 23.04.2015 %& '( ' #$ / DATE OF ORDER 03.06.2015 $ / ORDER . . , (! / PER B.R. BASKARAN , A.M. THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING ORDER DATED 23.11.2012 PASSED BY THE LEARNED COMMISSIONER (APPE ALS), MUMBAI- 38, CONFIRMING THE PENALTY LEVIED U/S.271(1)(C) OF TH E ACT, BY THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2008-09. SITADEVI MITTAL 2 2. WE HAVE HEARD BOTH THE PARTIES AND PERUSED RELEV ANT MATERIAL ON RECORD. THE ASSESSEE FILED THE RETURN OF INCOME INI TIALLY WITHOUT DISCLOSING THE CAPITAL GAINS ON SALE OF AGRICULTURAL LAND. HOWEVER, A FOOTNOTE WAS ATTACHED IN THE ORIGINAL RETURN OF INCOME STATING THAT THE CAPITAL GAINS ON SALE OF AGRICULTURE LAND LOCATED NEAR PUNE IS NOT CONSIDERED AS INCOME AS AGRICULTURE LAND IS NOT AN A SSET U/S.2(14) OF THE INCOME TAX ACT. SUBSEQUENTLY, DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FILED REVISED COMPUTATION OF INCOME DISCLOSING THE CAPITAL GAINS ARISING ON SALE OF AGRI CULTURAL LAND, SINCE THE SAME FELL WITHIN 8 KMS FROM THE MUNICIPALITY LIMIT S AND HENCE WOULD FALL UNDER THE DEFINITION OF CAPITAL ASSET GIV EN IN THE INCOME TAX ACT. THE TOTAL INCOME DISCLOSED BY THE ASSESSEE I N THE REVISED COMPUTATION OF INCOME WAS ACCEPTED BY THE ASSESSING OF FICER. HOWEVER, THE AO INITIATED PENALTY PROCEEDINGS U/S.271( 1)(C) OF THE ACT. 3. IN THE PENALTY ORDER THE ASSESSING OFFICER NOTICED THAT THE PUNE INCOME TAX AUTHORITIES HAVE CONDUCTED ENQUIRIES AND F OUND ABOUT THE ACCRUAL OF CAPITAL GAINS TO THE ASSESSEE. HENCE THE AO EXPRESSED THE VIEW THAT THE ASSESSEE, ONLY ON APPREHENSION ABOUT TH E DETECTION UPON THE INQUIRIES CONDUCTED BY THE PUNE INCOME TAX AUTHORI TIES, HAS COME FORWARD TO FILE A REVISED COMPUTATION. ACCORDINGLY, THE ASSESSING SITADEVI MITTAL 3 OFFICER HELD THAT THE ASSESSEE HAS FURNISHED INACCURA TE PARTICULARS OF INCOME AND THEREBY CONCEALED TAXABLE CAPITAL GAINS. A CCORDINGLY HE LEVIED PENALTY OF RS.21.57 LAKHS U/S.271(1)(C) OF THE ACT. THE LD. CIT(A) ALSO CONFIRMED THE SAME AND HENCE THE ASSESSE E HAS FILED THIS APPEAL BEFORE US. 4. AT THE TIME OF HEARING LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON ORDER DATED 11.04.2014 PASSED BY THE CO- ORDINATE BENCH IN THE CASE OF ANOTHER CO-OWNER OF THE LAND NAMED SMT . GEETADEVI MITTAL IN ITA NO.418/M/2013. THE AO HAD LEVIED PENAL TY U/S.271(1)(C) OF THE ACT IN THE CASE OF GEETADEVI MITTAL ALSO FOR IDENTICAL REASONS. THE CO-ORDINATE BENCH HAS TAKEN THE VIEW THAT THE ASSESS EE HAS VOLUNTARILY OFFERED THE CAPITAL GAINS ON SALE OF LAN D, BEFORE DETECTION BY THE INCOME TAX DEPARTMENT AND FURTHER SHE WAS UNDER BONA FIDE BELIEF THAT THE CAPITAL GAINS ARISING ON SALE OF AGRIC ULTURAL LAND IS NOT TAXABLE AT THE TIME OF FILING OF ORIGINAL RETURN. ACC ORDINGLY, THE CO- ORDINATE BENCH HAD DELETED THE PENALTY LEVIED U/S.271 (1)(C) OF THE ACT. FOR THE SAKE OF CONVENIENCE WITH EXTRACT BELOW THE OP ERATIVE PORTION OF THE ORDER PASSED BY THE CO-COORDINATE BENCH IN THE CAS E OF GEETADEVI MITTAL(SUPRA); THE DECISION RELIED UPON BY THE LD. DR ARE BASED O N THE FACT THAT THE AMOUNTS SURRENDERED BY THE ASSESSEE WAS IN V IEW OF THE SITADEVI MITTAL 4 DETECTION MADE BY THE AO AND THEREFORE, THE DECISIONS A RE NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE. IN THE CA SE OF CIT VS. MAK DATA (SUPRA) THE HONBLE DELHI HIGH COURT HAS NOTE THE FACT THAT THERE WAS ABSOLUTELY NO EXPLANATION FROM THE ASSE SSEE IN RESPECT OF THE AMOUNT SURRENDERED. ONLY WHEN THE AO CA LLED UPON THE ASSESSEE TO PRODUCE THE EVIDENCE TO THE NATUR E OF THE SOURCE OF AMOUNT RECEIVED AS SHARE CAPITAL, THE CREDI TWORTHINESS OF THE APPLICANTS AND GENUINENESS OF THE TRANSACTIONS TH E ASSESSEE SIMPLY FOLDED UP AND SURRENDERED THE SUM. T HUS IT IS CLEAR THAT IN THE SAID CASE THE ASSESSEE SURREND4RED THE INCOME WHEN THE AO HAS CONCERNED THE ASSESSEE AND ASKED TO EXPLAIN THE SOURCE, GENUINENESS AND CREDITWORTHINESS OF THE APPLICANT. SIMILARLY, IN THE CASE OF CIT VS. BANSAL ABUSHAN BH ANDAR, THE ASSESSEE OFFERED THE UNDISCLOSED INCOME ON BEING CO RNERED BY THE DEPARTMENT AND IT WAS FOUND THAT THERE WAS A DELI BERATE ACT OF CONCEALMENT OF INCOME BY THE ASSESSEE. IN THE CA SE OF ACIT VS. SMT. MYTHILE (SUPRA), THE TRIBUNAL HAS NOTED THE FACT THAT THE ASSESSEE DID NOT FILED THE RETURN OF INCOME WITHIN TWO Y EARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR AS ALLOWED U/ S.153(1). AS IT SI CLEAR FROM THE FACTS OF THESE DECISIONS RELI ED UPON BY THE LD. DR THAT IN ALL CASES THAT ASSESSEE SURRENDERED TH E AMOUNT ONLY WHEN IT WAS DETECTED OR THE INQUIRY WAS MADE BY TH E AO IN RESPECT OF A PARTICULAR CLAIM OF THE ASSESSEE. WHEREA S IN THE CASE OF THE ASSESSEE THERE WAS NO SUCH DETECTION OF CAPITAL GAIN OR ANY INQUIRY MADE BY THE AO WITH RESPECT TO CAPITAL GAI N IN QUESTION. THE ASSESSEE OFFERED THE CAPITAL GAIN PRIO R TO ANY SUCH DETECTION BY THE DEPARTMENT AND EVEN PRIOR TO THE COMPLETI ON OF ENQUIRY IN THE ASSESSMENT PROCEEDINGS. THEREFORE, THI S ACT AND CONDUCT OF THE ASSESSEE CANNOT BE TERMED AS OFFERING TH E INCOME DUE TO APPREHENSION OR BEING CONCERNED BY THE REVENU E. IT IS NOT THE CASE OF DISALLOWANCE OF ANY CLAIM, THEREFORE, TH E QUESTION OF BOGUS OR ABSOLUTE INCORRECT CLAIM OF THE ASSESSEE DOES NOT ARISE. WE FIND THAT IN THE PECULIAR FACTS OF THE PRESENT CAS E WHERE THE LAND IN QUESTION IS AN AGRICULTURAL LAND AND IT REMAI NED AS AN AGRICULTURAL; LAND BUT FOR THE PURPOSE OF INCOME TAX AND DUE TO THE EXPANSION OF THE MUNICIPAL LIMIT OF CITY OF PUN E IT IS EXCLUDED FROM THE EXCLUSION CLAUSE OF SECTION 2(14)(III). THE REFORE, THE EXPLANATION OF THE ASSESSEE THAT SHE WAS UNDER BONAFI DE BELIEF THAT THE CAP[ITAL GAIN ARISING FROM THE SALE OF AGRI CULTURAL LAND IS NOT AXABLE AT THE TIME OF FILING OF THE ORIGINAL RETURN IS A BONAFIDE EXPLANATION AND, THEREFORE, DOES NOT FALL UNDER THE E XPLANATION TO SECTION 271(1)(C). SINCE THE ASSESSMENT YEAR UNDER CONSIDERATION DOES NOT FALL UNDER THE YEAR IMMEDIATEL Y PRECEDING SITADEVI MITTAL 5 TO THE ASSESSMENT YEAR IN WHICH SEARCH WAS CONDUCTED AND, THEREFORE, REFERENCE MADE BY THE AO TO THE RETURN FILE D U/S.153A IS NOT RELEVANT. IN VIEW OF THE ABOVE DISCUSSION AS W ELL AS CIRCUMSTANCES OF THE CASE, WE DELETED THE PENALTY U/S.271(1)(C). 5. IN THE INSTANT CASE ALSO, THE ASSESSEE HAS VOLUNTA RILY FILED THE REVISED COMPUTATION OF INCOME. THOUGH THE AO MAKES A REFERENCE TO THE ENQUIRIES CONDUCTED BY THE PUNE INCOME TAX AUTHOR ITIES, IT IS NOT MADE CLEAR AS TO HOW IT HAD PROMPTED THE ASSESSEE TO F URNISH THE REVISED COMPUTATION OF INCOME. IN FACT, THERE IS NO MENTION ABOUT THE ENQUIRY IN THE ASSESSMENT ORDER. THE AO HAS MENTIONED ABOUT THE ENQUIRY ONLY IN THE PENALTY ORDER. FURTHER IT IS ALSO A FACT THAT THE ASSESSEE HAS DISCLOSED THE DETAILS OF SALE OF AGRICU LTURAL LAND IN THE ORIGINAL RETURN OF INCOME AND SHE HAS ALSO STATED THAT THE SAME DOES NOT FALL IN THE DEFINITION OF CAPITAL ASSET, MEANIN G THEREBY THE ASSESSEE HAD ENTERTAINED A BONA FIDE BELIEF IN THIS MATTER. SINCE THE FACTS AND CIRCUMSTANCES OF THE ISSUE UNDER CONSIDERA TION ARE IDENTICAL WITH THAT PREVAILING IN THE CASE OF GEETA DEVI MITTAL (REFERRED SUPRA), BY FOLLOWING THE ORDER PASSED BY THE CO-ORDINATE BENC H REFERRED ABOVE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON IDENTICAL REASONING AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY L EVIED U/S.271(1)(C) OF THE ACT. SITADEVI MITTAL 6 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD DAY OF JUNE, 2015. SD/- SD/- SD SD/ - '# $ % & AMIT SHUKLA JUDICIAL MEMBER SD/ - . . B.R. BASKARAN ACCOUNTANT MEMBER MUMBAI, )* DATED: 03.06.2015 PATEL %& ' #)* +*# / COPY OF THE ORDER FORWARDED TO : (1) ,# / THE ASSESSEE; (2) - / THE REVENUE; (3) .#( ) / THE CIT(A); (4) .# / THE CIT, MUMBAI CITY CONCERNED; (5) *1 #2, $ 2, ! / THE DR, ITAT, MUMBAI; (6) 14 5! / GUARD FILE. * # # / TRUE COPY %& / BY ORDER 6 / 7 - / (DY./ASSTT. REGISTRAR) $ 2, ! / ITAT, MUMBAI