ACIT 18(3), MUMBAI V. LATE BHANUBEN CHAUHAN REP. BY SHRI JAYESH J. CHAUHAN, MUMBAI

ITA 4670/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59743 (ITAT-MUMBAI)
• Duration Of Justice: 42 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Department
• Assessment Year: misc
• Appeal Filed On: 01-01-1970
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: RAJIV KHANDELWALA
• Keywords: Business income; Difference of opinion
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J, MUMBAI BEFORE SHRI P.M. JAGTAP, A.M. AND SHRI V. DURGA RAO , J.M. ITA NO. 4670/MUM/2010 ASSESSMENT YEAR: 2002-03 ASSTT. COMMISSIONER OF INCOME-TAX-18(3), APPE LLANT ROOM NO. 209, 2 ND FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI 400 012. VS. LATE BHANUBEN CHAUHAN RESPONDENT REP. SHRI JAYES J. CHAUHAN 601, KRISHNA KUNJ, 170, PANDURANG MARG, MUMBAI 400 016. (AADPC 1281 E) APPELLANT BY : MR. A.K. NAYAK RESPONDENT BY : MR. RAJIV KHANDELWALA DATE OF HEARING : 25/01/2012 DATE OF PRONOUNCEMENT : 31/01/2012 ORDER PER V. DURGA RAO, J.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGA INST THE ORDER OF CIT(A)-29, MUMBAI, PASSED ON 16/03/2010 FOR THE ASS ESSMENT YEAR 2002-03. 2. THE GROUND RAISED BY THE REVENUE IS DIRECTED AGA INST THE ACTION OF THE CIT(A) IN DELETING THE PENALTY OF RS. 3,11,1 00/- LEVIED U/S 271(1)(C) OF THE ACT. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE HAD FILED HER RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 26,5 1,712/-, WHICH WAS COMPLETED U/S 143(3) OF THE ACT ON 15/03/2005 DETER MINING THE TOTAL INCOME AT RS. 32,31,600/-. THE ASSESSEE IS A MEMBER OF HUF KNOWN ITA NO. 4670/MUM//2010 LATE BHANUBEN CHAUHAN 2 AS JAIRAM JAGMAL. THE SAID HUF CONSTRUCTED A BUILDI NG IN THE YEAR 1951. IN THE YEAR 1952 THERE WAS A PARTITION OF THE HUF AND THE TENANTS IN COMMON DECIDED TO DEMOLISH THE BUILDING AND CONSTRUCT A NEW BUILDING IN THE SAME PLACE. THERE WAS AN AGREEM ENT DATED 10 FEBRUARY, 1995 WHICH MENTION THE DETAILS OF SHARES OF EACH MEMBER. IT IS STATED THAT IT IS CLEARLY MENTIONED IN THE SA ID AGREEMENT THAT AFTER OCCUPATION OF THE FLAT THE SHARES OF THE MINO R SHALL BE DISPOSED OF IF NECESSARY, BY MAKING A PETITION TO THE HONBL E HIGH COURT OF BOMBAY. ACCORDING TO THE AGREEMENT THE OLD BUILDING WAS DEMOLISHED AND A NEW BUILDING WAS CONSTRUCTED. AFTER ALLOCATI NG FLATS TO THE CO- OWNERS TWO FLATS WERE SOLD AND LTCG ON THE LAND AND STCG ON THE FLATS WERE DISCLOSED. THE AO TREATED THE SAID INCOM E AS BUSINESS INCOME AND MADE THE ADDITION. THE CIT(A) CONFIRMED THE ACTION OF THE AO. THEREAFTER, THE AO INITIATED PENALTY PROCEEDING S U/S 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF SU CH INCOME. IN WHICH TAX AMOUNTING TO RS. 3,11,800/- IS EVADED. AFTER RE JECTING THE EXPLANATION OF THE ASSESSEE IN THE PENALTY PROCEEDI NGS, THE AO LEVIED A MINIMUM PENALTY BEING 100% OF THE TAX SOUGHT TO B E EVADED WHICH WORKED OUT TO RS. 3,11,800/-. AGGRIEVED, THE ASSESS EE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). BEFORE THE CIT( A), THE ASSESSEE STATED THAT SIMILAR ADDITIONS HAD BEEN DELETED BY A NOTHER CIT(A) FOR AY 1996-97 IN THE CASE OF PREETI JAYASH CHAUHAN BY ORDER DATED 29/02/2000. IT WAS ALSO ARGUED THAT SIMILAR ADDITIO NS HAD BEEN DELETED BY CIT(A) IN THE CASE OF OTHER CO-OWNERS. I T WAS ARGUED THAT ALL DETAILS REGARDING THE ACCRUAL OF INCOME HAD BEEN DI SCLOSED BY THE ASSESSEE. THEREFORE, IT CANNOT BE SAID THAT PARTICU LARS OF INCOME WERE CONCEALED. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A) HELD AS UNDER:- 5. I HAVE CONSIDERED THE FACTS OF THE CASE, THE ARG UMENTS OF THE APPELLANT AND THE REASONING GIVEN BY THE AO. IT HAS NOT BEEN BROUGHT ON RECORD WHY PENALTY SHOULD BE LEVIED AND WHAT PARTICULARS OF INCOME HAVE BEEN CONCEALED. IN FACT APPELLANT HAS DISCLOSED ALL PARTICULARS OF INCOME AND THERE IS ON LY A DIFFERENCE OF OPINION IN TREATING THE INCOME AS CAPITAL GAINS OR BUSINESS INCOME. THERE ARE ORDERS FROM OTHER CIT(A) DELETING THESE ADDITIONS. THEREFORE PENALTY CANNOT BE LEVIED IN RE SPECT OF THESE ITA NO. 4670/MUM//2010 LATE BHANUBEN CHAUHAN 3 ADDITIONS. THERE ARE SEVERAL DECISIONS OF COURTS FO R THE PROPOSITION THAT WHEN THERE ARE MULTIPLE VIEWS POSS IBLE, PENALTY CANNOT BE LEVIED U/S 271(1)(C) OF THE ACT. THEREFOR E, THE PENALTY LEVIED BY THE AO IS DELETED. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE US. 5. THE LEARNED DR HAS RELIED UPON THE ORDER OF THE AO AND THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THE CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECO RD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE CI T(A) GAVE A CATEGORICAL FINDING THAT IT HAS NOT BEEN BROUGHT ON RECORD WHY PENALTY SHOULD BE LEVIED AND WHAT PARTICULARS OF INCOME HAV E BEEN CONCEALED. IN FACT APPELLANT HAS DISCLOSED ALL PARTICULARS OF INCOME AND THERE IS ONLY A DIFFERENCE OF OPINION IN TREATING THE INCOME AS CAPITAL GAINS OR BUSINESS INCOME. HE GAVE A FURTHER FINDING THAT THE RE ARE SEVERAL DECISIONS OF COURTS FOR THE PROPOSITION THAT WHEN T HERE ARE MULTIPLE VIEWS POSSIBLE, PENALTY CANNOT BE LEVIED U/S 271(1) (C) OF THE ACT. IN THE PRESENT CASE, IT IS SEEN THAT THERE IS ONLY DIF FERENCE OF OPINION IN TREATING THE INCOME AS CAPITAL GAINS OR BUSINESS IN COME. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED HER PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E. THIS IS NOT A FIT CASE TO LEVY OF PENALTY U/S 271(1)(C) OF THE AC T, AS HAS BEEN HELD BY VARIOUS COURTS THAT WHEN THERE ARE TWO VIEWS POSSIB LE, PENALTY CANNOT BE LEVIED U/S 271(1)(C) OF THE ACT. WE, THEREFORE, UPHOLD THE ORDER OF THE CIT(A) IN DELETING THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT AND DISMISS THE GROUND OF APPEAL OF THE REVENUE . ITA NO. 4670/MUM//2010 LATE BHANUBEN CHAUHAN 4 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF JANUARY, 2012. SD/- SD/- (P.M. JAGTAP) (V. DURGA RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI, DATED: 31 ST JANUARY, 2012 KV COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, J BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI.