The Income-tax Officer, Amritsar. V. Sh. Rajiv Mehra Prop., Amritsar.

ITA 452/ASR/2014

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4145 (ITAT-AMRITSAR)
• Duration Of Justice: 4 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 13-02-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 09-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKAR
• Keywords: Cost of acquisition; Difference of opinion
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. N. S. SAINI, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I. T. A. NO. 452(ASR)/2014 ASSES SMENT YEAR: 2008-09 INCOME TAX OFFICER,\WARD 3(3), AMRITSAR VS. SHRI RAJIV MEHRA PROP. M/S H.D. MEHRA CHEMICAL WORKS, LAHORI GATE, AMRITSAR PAN NO. ABPQM 1297C (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ASHWANI KALIA, CA RESPONDENT BY: SH. BHAWANI SHANKAR, DR DATE OF HEARING : 13.2.2019 DATE OF PRONOUNCEMENT : 14.2.2019 ORDER PER N.S. SAINI, AM: THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS), AMRITSAR DATE D 5.5.2014. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT C IT(A) ERRED IN DELETING THE LEVY OF PENALTY OF RS. 37,07,496/- IMPOSED BY THE AO U/S 271(1)(C) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT', IN SHORT). 3. THE BRIEF FACTS OF THE CASE ARE THAT THE AO PASS ED THE ORDER U/S 143(3) OF THE ACT ON 30.12.2010 AND MADE THE FOLLOWING ADDITIONS: - A) ADDITION ON ACCOUNT TO LONG TERM CAPITAL GAINS R S. 84,17,645/- 2 ITA NO. 452/ASR/2014 SHRI RAJIV MEHRA PROP. M/S H.D. MEHRA CHEMICAL WORK S, AMRITSAR B) DISALLOWANCE OUT OF CAR EXPENSES RS. 45,142/- C) DISALLOWANCE OUT OF TELEPHONE EXPENSES RS. 11, 483/- D) DISALLOWANCE OUT OF INTEREST RS. 4,69,267/- 4. ON APPEAL, THE LD. CIT(A) REDUCED THE ADDITION U NDER THE HEAD LONG TERM CAPITAL GAINS TO RS. 84,17,645/- TO RS. 1,70,737/- . 5. THE REVENUE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL REVERSED THE ORDER OF THE CIT(A). 6. THEREAFTER, THE AO LEVIED PENALTY U/S 271(1)(C) ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE OF RS. 84,17,645/- AND LEVIED PENALTY OF 200% TAX SOUGHT TO THE EVADED BY THE ASSESSEE AT RS. 37,07,496/- 7. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) AND CONTENDED THAT ASSESSEE HAD MADE MERE LEGAL CLAIM FOR THE PURPOSE OF INDEXATION AND INDEXED COST OF ACQUISITION SHOULD BE TAKEN AS ON 1.4.1981 IN VIEW OF THE FACT THAT THE ASSESSEE HAS RECEIVED THE PROPERTY BY INHERITANCE / WILL FORM HI S FATHER, THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE SUBMITTED ANY PARTICULARS WHICH W AS FALSE AND FOR THIS HE PLACED RELIANCE ON THE DECISION OF THE HON'BLE SUPREME CO URT IN THE CASE OF RELIANCE PETRO PROUDCTS P LTD 322 ITR 158, WHEREIN, THE HON'BLE S UPREME COURT HELD THAT A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW , BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INAC CURATE PARTICULARS. THE CIT(A) THEREFORE, DELETED THE PENALTY OBSERVING THAT THE A O HAS NOT PROVED THAT CLAIM WAS 3 ITA NO. 452/ASR/2014 SHRI RAJIV MEHRA PROP. M/S H.D. MEHRA CHEMICAL WORK S, AMRITSAR FALSE ANYWHERE IN THE PENALTY ORDER AND EARLIER CIT (A) HAS ALSO GIVEN FINDINGS THAT INDEXED COST SHOULD BE ADOPTED AS ON 1.4.1981, THUS , THERE IS DIFFERENCE OF OPINION ON THIS ISSUE AND HE WAS ALSO OF THE OPINION THAT THER E WAS NO TRANSFER OF PROPERTY BY VIRTUE OF FAMILY SETTLEMENT DATED 2.9.2003, HENCE, THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME IS DELETED. HE OBSERVED THAT THE AO HAS LEVIED PENALTY @ 200% OF THE TAX SOUGHT TO THE EVADED WITHOUT GIVING ANY REASON FOR LEVYING PENALTY ON SUCH A HIGHER RATE. THE ACTION OF THE AO LEVYING PENALTY @ 200% IS NOT SUSTAINABLE AND ACCORDINGLY H E HELD THAT THE GROUNDS OF APPEAL ARE DECIDED IN FAVOUR OF THE ASSESSEE AS HE HAS NE ITHER CONCEALED ANY PARTICULARS NOR FURNISHED INACCURATE PARTICULARS OF INCOME AND ALLO WED THE APPEAL OF THE ASSESSEE. 8. THE LD. DR RELIED ON THE ORDERS OF THE AO. 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE MATERIAL ON RECORD, WE ARE OF THE CONSIDERED VIEW THAT THE LD. DR SIMPLY R ELIED UPON THE ORDER OF THE AO. HE COULD NOT POINT ANY SPECIFIC ERROR IN THE ORDER OF THE CIT(A). HE ALSO COULD NOT CONTROVERT THE FINDINGS OF THE CIT(A) WHICH IS TO T HE EFFECT THAT THE AO HAS NOT PROVED THE CLAIM MADE IN THE RETURN OF INCOME AS FALSE IN THE PENALTY ORDER AND THAT CIT(A) EARLIER HAD GIVEN A FINDINGS THAT INDEXED COST SHOU LD BE ADOPTED AS ON 1.4.1981 AND THUS THERE WAS DIFFERENCE OF OPINION ON THE ISSUE A ND THAT HE WAS ALSO OF THE OPINION THAT THERE WAS NO TRANSFER OF PROPERTY BY VIRTUE OF FAMILY SETTLEMENT DATED 2.9.2003. THEREFORE, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) WHICH IS HEREBY CONFIRMED. THE GROUNDS OF APPEAL ARE DISMISSED. 4 ITA NO. 452/ASR/2014 SHRI RAJIV MEHRA PROP. M/S H.D. MEHRA CHEMICAL WORK S, AMRITSAR 10. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 14. 2.2019. SD/- SD/- (N. K. CHOUDHRY) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 14.02.2019 RKK COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) THE CIT(APPEALS) (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T. 5 ITA NO. 452/ASR/2014 SHRI RAJIV MEHRA PROP. M/S H.D. MEHRA CHEMICAL WORK S, AMRITSAR DATE INITIAL 1. DRAFT DICTATED ON 13.2.19 SR.PS/PS 2. DRAFT PLACED BEFORE AUTHOR 14.2.19 SR.PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR. P.S./P.S. 14.2.19 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 14.2.19 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 15.2.19 SR.PS/PS 8. DATE ON WHICH FILE GOES TO THE A.R. 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE OF DISPATCH OF ORDER