Arun Kumar Agarwal, Ghaziabad V. DCIT (International Taxation), Noida

ITA 4741/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6830 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 09-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 06-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 4741/DEL/2016 ASSESSMENT YEAR: 2007-08 ARUN KUMAR AGARWAL VS. DCIT (INTL. TAXATION) KD-41, KAVI NAGAR, CIRCLE NOIDA GHAZIABAD (UP) (PAN: ABGPA8360E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAJAT JAIN, CA & SH. AKSHAT JAIN, CA DEPARTMENT BY : SH. RAKESH KUMAR, SR. DR. ORDER THE ASSESSEE HAS FILED THE APPEAL AGAINST THE IMPU GNED ORDER DATED 30.6.2016 OF LD. CIT(A)-2, NOIDA PERTAINING TO ASSESSMENT YEAR 2007-08. THE GROUND RAISED IN THE ASSESSEES APPEA L READS AS UNDER:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE THE LD. CIT(A) HAS ERRED BOTH ON F ACTS AND IN LAW IN UPHOLDING PENALTY UNDER SECTION 271(1)(C) IN ABSENCE OF ANY MATERIAL ON RECORD TO P ROVE CONCEALMENT OR FURNISHING OF INACCURATE PARTICULAR S OF INCOME. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE THE LD. CIT(A) HAS ERRED IN LAW IN UPHOLDING PENALTY UNDER SECTION 271(1)(C) IMPOSED O N THE ADDITION / SURRENDER MADE MERELY BY VIRTUE OF DEEMING PROVISIONS OF SECTION 50C WITHOUT 2 APPRECIATING THE LAW THAT THE DEEMING PROVISIONS OF SECTION 50C DOES NOT IPSO FACTO ATTRACT THE PENALT Y U/S. 271(1)(C). 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE THE LD. CIT(A)_ HAS ERRED IN LAW I N UPHOLDING PENALTY UNDER SECTION 271(1)(C) ON THE AMOUNT OF RS. 41,087/- INADVERTENTLY CLAIMED BY THE APPELLANT ON ACCOUNT OF FREE HOLD EXPENSES. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR AL TER ANY OF THE GROUNDS OF APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE FILED ITS RETURN OF INCOME ON 07.12.2007 DECLARING TOTAL INCOME OF RS. 9,36,820/-. THE AO FINALIZED THE ASSESSMENT VIDE ORDER DATED 31.12.200 9 UNDER SECTION 143(3) OF THE I.T. ACT AT AN ASSESSED INCOME OF RS. 31,68, 892/- AFTER MAKING ADDITION OF RS. 22,32,072/-. THIS ALSO INCLUDED AN ADDITION OF RS. 11,28,485/ - ON ACCOUNT OF DIFFERENCE IN INDEXE D COST OF ACQUISITION OF PROPERTY SOLD BY THE ASSESSEE. AGGRIEVED, THE ASSES SEE FILED APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY AGAINST TH E ISSUE OF COST OF ACQUISITION. ACCORDING TO THE ASSESSEE, INDEXATION SHOULD HAVE BEEN TAKEN FROM 01.04.1981 AS AGAINST THE YEAR ADOPTED BY THE AO I.E. 1996-97. THE LD. CIT(A-L), NOIDA PASSED APPEAL ORDER UNDER SECT ION 250 OF THE ACT ON 21.04.2014 IN WHICH HE HELD THAT AS PER THE PROVISI ONS OF SECTION 49(I) OF THE ACT, THE PERIOD OF HOLDING THE ASSET HAS TO B E DETERMINED BY INCLUDING THE PERIOD FOR WHICH THE SAID ASSET WAS HELD BY TH E PREVIOUS YEAR AND 3 INDEXED COST OF ACQUISITION HAS TO BE COMPUTED WIT H REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET A ND NOT THE YEAR IN WHICH THE ASSESSEE BECAME THE OWNER OF THE ASSET. HE, THE REFORE, DIRECTED THE AO, TO RE-COMPUTE THE CAPITAL GAINS OF THE ASSESSEE ACCORDINGLY. THE APPEAL EFFECT WAS GIVEN BY THE AO BY ORDER DATED 10 .06.2014 IN WHICH THE INCOME OF THE ASSESSEE WAS RECOMPUTED AND REVIS ED TOTAL INCOME WAS ARRIVED AT RS. 20,40,410/ - AS AGAINST RETURNED INC OME OF RS. 9,36,820/-. THE AO, THEREAFTER, IMPOSED PENALTY U/S 271(L)(C) O F THE ACT ON ACCOUNT OF DISALLOWANCE OF CAPITAL GAINS AND ADDITION ON ACCOU NT OF CLAIM OF FREE HOLD EXPENSES. AGGRIEVED BY ORDER OF THE AO, THE INSTANT APPEAL FILED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 30.6.2016 HAS BEEN UPHELD THE ACTION OF THE AO OF IMPOSING THE PENALTY . 3. NOW THE ASSESSEE IS AGGRIEVED AGAINST THE IMPUGN ED ORDER AND FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 4. AT THE THRESHOLD, LD. COUNSEL OF THE ASSESSEE HA S STATED THAT THE ISSUES INVOLVED IN THE PRESENT APPEAL ARE SQUARELY COVERED BY THE ITAT, D BENCH, MUMBAI DECISION DATED 22.12.2010 PASSED IN ITA NO. 2210/MUM/2010 (AY 2006-07) IN THE CASE OF RENU HI NGORANI VS. ACIT, MUMBAI. IN THIS BEHALF, HE FILED THE COPY OF THE SAID DECISION AND REQUESTED THAT BY FOLLOWING THE SAME REASONING, TH E PENALTY IN DISPUTE MAY BE DELETED AND ACCORDINGLY, THE APPEAL OF THE A SSESSEE MAY BE ALLOWED. 4 5. ON THE CONTRARY, LD. SR. DR RELIED UPON THE ORDE RS OF THE AUTHORITIES BELOW. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS, ESPECIALLY THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND THE DE CISION REFERRED BY THE LD. COUNSEL OF THE ASSESSEE IN THE CASE OF REN U HINGORANI VS. ACIT, MUMBAI PASSED IN ITA NO. 2210/MUM/2010 (AY 2006-07) DATED 22.12.2010. I FIND CONSIDERABLE COGENCY IN THE ASSE SSEES COUNSEL IN RELYING UPON THE AFORESAID DECISION OF THE ITAT, NE W DELHI. FOR THE SAKE OF CLARITY, I AM REPRODUCING THE FINDING GIVEN VID E PARA NO. 8 TO 9 AT PAGES 5 TO 6 OF THE ITAT, MUMBAI DECISION DATED 22.12.2 010 IN THE CASE OF RENU HINGORANI VS. ACIT, MUMBAI PASSED IN ITA NO. 2 210/MUM/2010 (AY 2006-07) AS UNDER:- 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RELEVANT RECORD. WE FIND THAT THE AO HAD MADE ADDITION OF RS. 9,00,824/- BEING DIFFERENCE BETWEE N THE SALE CONSIDERATION AS PER SALE AGREEMENT AND THE VALUATION MADE BY THE STAMP VALUATION AUTHORITY. THUS, THE ADDITION HAS BEEN MADE BY THE AO BY APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT. IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT THE AO HAS N OT QUESTIONED THE ACTUAL CONSIDERATION RECEIVED BY THE ASSESSEE PROVISIONS OF THE INCOME TAX ACT, 1961. TH E AO HAS NOT GIVEN ANY FINDING THAT THE ACTUAL SALE 5 CONSIDERATION IS MORE THAN THE SALE CONSIDERATION ADMITTED AND MENTIONED IN THE INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. IT IS ALSO NOT T HE CASE OF THE REVENUE THAT THE ASSESSEE HAS FAILED TO FURNISH THE RELEVANT RECORD AS CALLED BY THE AO TO DISCLOSE THE PRIMARY FACTS. THE ASSESSEE HAS FURNIS HED ALL THE RELEVANT FACTS, DOCUMENTS/ MATERIAL INCLUDI NG THE SALE AGREEMENT AND THE AO HAS NOT DOUBTED THE GENUINENESS AND VALIDITY OF THE DOCUMENTS PRODUCED BEFORE HIM AND THE SALE CONSIDERATION RECEIVED BY T HE ASSESSEE. UNDER THESE FACTS AND CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT FURNISHED CORRECT PARTICULARS OF INCOME. MERELY BECAUSE THE B Y THE STAMP VALUATION AUTHORITY WOULD NOT BE A CONCLUSIVE ASSESSEE AGREED FOR ADDITION ON THE BASI S OF VALUATION MADE PROOF THAT THE SALE CONSIDERATION AS PER THIS AGREEMENT WAS INCORRECT AND WRONG. ACCORDINGLY THE ADDITION BECAUSE OF THE DEEMING PROVISIONS DOES NOT IPSO FACTO ATTRACT THE PENALTY U/S 271(1)(C). HENCE IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VIS RELIANCE PETROPRODUCTS PVT.LTD (SUPRA), THE PENALTY 6 LEVIED U/S 271(1)( C) IS NOT SUSTAINABLE. THE SAME IS DELETED. 9. THE APPEAL OF THE ASSESSEE IS ALLOWED. 7. AFTER PERUSING THE AFORESAID DECISION OF THE ITA T, MUMBAI, I AM OF THE CONSIDERED VIEW THAT THE ISSUES IN DISPUTE ARE SQUARELY COVERED BY THE AFORESAID DECISION, BECAUSE THE FACTS AND CIRCU MSTANCES OF THE PRESENT CASE ARE EXACTLY SIMILAR AND IDENTICAL TO THAT OF CASE OF RENU HINGORANI VS. ACIT MUMBAI (SUPRA). THEREFORE, RESPECTFULLY FO LLOWING THE AFORESAID DECISION DATED 22.12.2010 OF THE ITAT, D BENCH, M UMBAI PASSED IN ITA NO. 2210/MUM/2010 (AY 2006-07) IN THE CASE OF RENU HINGORANI VS. ACIT, MUMBAI, THE PENALTY IN DISPUTE IS DELETE D AND ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/02/ 2017. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED: 13/02/2017 *SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITATTRUE COPY BY ORDER, ASSISTANT REGISTRAR 7