Smt. Manjulagauri P. Mandaliya, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-4 (3) , RAJKOT-GUJARAT

ITA 48/RJT/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1312 (ITAT-RAJKOT)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-04-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 05-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BEN CH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI S. S. GOD ARA, J.M.) ( , .. , ) ITA NO. 48/RJT/2016 (ASSESSMENT YEAR: 2006-07) SMT. MANJULAGAURI P. MANDALIYA GADHIYANAGAR, STREET NO.3, CHANDUBHAI MISTRI HOME, SAINT KABIR ROAD, RAJKOT VS. INCOME-TAX OFFICER, WARD-4(3), RAJKOT PAN: ACVPP2464J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MEHUL RANPURA, C.A. RESPONDENT BY : SHRI PRASOON KABRA, D.R. DATE OF HEARING : 06-04-201 6 DATE OF PRONOUNCEMENT : 25-04-2016 ( )/ ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-3, RAJKOT, DATED 03.12.2015 FOR A.Y. 2006-07. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI AL ON RECORD ARE AS UNDER. ITA NO. 48/RJT/2016 (SMT. MANJULAGAURI P. MANDALIYA VS. ITO) . 2 3. ASSESSEE IS AN INDIVIDUAL. AO NOTICED THAT DUR ING THE YEAR, ASSESSEE SOLD IMMOVABLE PROPERTY BUT HAD NOT FILED THE RETURN OF INCOME NOR HAD OFFERED THE CAPITAL GAIN ON SALE OF IMMOVABLE PROPERTY TO TAX. THE AO THEREFORE ISSUED NOTICE ON 19/3/2013 U/S.148 OF THE ACT AND IN RESPONSE TO WHICH ASSESSEE FILED RETURN OF INCOME ON 30/12/2013 DECLARING TOTAL INCOME OF RS.6 6,470/-. ASSESSMENT WAS THEREAFTER FRAMED U/S.143(3) R.W.S. 147 OF THE ACT VIDE ORDER DATED 27/01/2014 AND THE TOTAL INCOME WAS DETERMINED AT RS.4,01,604/- WH ICH INCLUDED RS.3,29,013/- , BEING LONG TERM CAPITAL GAIN, ON SALE OF IMMOVABLE PROPERTY. ON THE ABOVE SAID ADDITION MADE WITH RESPECT TO CAPITAL GAINS, A.O VIDE ORDER DATED 30.07.2014 LEVIED PENALTY OF RS. 53,320/- U/S. 271(1)(C). AGG RIEVED BY THE AFORESAID PENALTY ORDER, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A ) WHO VIDE ORDER DATED 03.12.2015 (IN APPEAL NO.CIT -2/0097/2014-15) DISMI SSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF LD. C IT(A), ASSESSES IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING EFFEC TIVE GROUND:- 2.0 THE LD. COMMISSIONER OF INCOME TAX (APPEALS)- I, RAJKOT HAS ERRED IN LAW AS ALSO ON FACTS IN ALLEGING THAT THE APPELLANT HAD FILED H ER RETURN OF INCOME NOT VOLUNTARILY BUT IN RESPONSE TO NOTICE U/S.148 AND A LSO THAT IF THE ASSESSMENT HAD NOT BEEN RE-OPENED FOR THE YEAR UNDER APPEAL, THE I NCOME WOULD HAVE ESCAPED ASSESSMENT AND THEREBY CONFIRMING PENALTY OF RS.53, 320/- LEVIED U/S.271(1)(C) OF THE ACT. THE PENALTY LEVIED U/S.271(1)(C) OF THE A CT IS TOTALLY UNJUSTIFIED ON FACTS AS ALSO IN LAW, MAY KINDLY BE DELETED. 4. BEFORE US, LD. A.R. REITERATED THE SUBMISSIONS M ADE BEFORE THE A.O. AND LD. CIT(A) AND FURTHER SUBMITTED THAT THOUGH THE ASSESS EE SOLD THE PROPERTY FOR RS.8 LACS BUT FOR THE PURPOSE OF WORKING OUT CAPITAL GA INS, THE VALUE OF RS.10,17,875/-, BEING VALUE CONSIDERED FOR REGISTRATION OF SALE OF PROPERTY, HAS BEEN CONSIDERED TO BE THE DEEMED CONSIDERATION U/S.50C OF THE ACT. HE SUBMITTED THAT THERE IS NO MATERIAL ON RECORD TO SHOW THAT THE ACTUAL CONSIDER ATION RECEIVED BY THE ASSESSEE IS MORE THAN THE SALE CONSIDERATION SHOWN IN THE SALE AGREEMENT. HE FURTHER SUBMITTED THAT MERELY BECAUSE ADDITION HAS BEEN MA DE UNDER DEEMING PROVISION ITA NO. 48/RJT/2016 (SMT. MANJULAGAURI P. MANDALIYA VS. ITO) . 3 (I.E. U/S50C), IT DOES NOT AUTOMATICALLY LEAD TO LE VY OF PENALTY FOR CONCEALMENT OF INCOME. HE FURTHER SUBMITTED THAT MERE ADDITION TO INCOME ON ESTIMATION BASIS CANNOT BE THE BASIS FOR LEVY OF PENALTY U/S.271(1)( C) OF THE ACT UNLESS THERE IS MATERIAL TO SHOW THAT ASSESSEE HAS CONCEALED PARTIC ULARS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME. HE FURTHER PLACED RELIANCE ON THE FOLLOWING DECISIONS:- (I) CIT VS. ARKAY SAREEE MUSEUM 187 ITR 147 (BOM) (II) CHIMANLAL PATEL V. ACIT AHMEDABAD (III) RENU HINGORANI VS. ACIT (ITA NO.2210/MUM/2010 ) (IV) N.MEENAKSHI VS. ACIT (2009) 125 TTJ 886 (MAD.) 4.1. THE LD. D.R. ON THE OTHER HAND SUPPORTED TH E ORDER OF A.O. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH REFERENCE TO LEVY OF PENALTY ON ACCOUNT OF CONCEALMENT OF INCOME, U/S.271(1)(C) ON THE ADDITIO N MADE U/S.50C OF THE ACT WHILE DETERMINING CAPITAL GAINS. IT IS AN UNDISPUT ED FACT THAT IN THE PRESENT CASE, THE ASSESSEE HAD SOLD THE PROPERTY FOR RS.8 LACS BUT FO R THE PURPOSE OF STAMP DUTY VALUATION, THE VALUE OF PROPERTY WAS CONSIDERED AT RS.10,17,875/- AND THE ASSESSEE HAD ALSO PAID STAMP DUTY OF THE AFORESAID VALUE. I T IS ALSO A FACT THAT FOR DETERMINING THE CAPITAL GAINS, AO HAD ADOPTED THE S TAMP DUTY VALUATION AS MANDATED U/S.50C OF THE ACT. IT IS AN UNDISPUTED F ACT THAT SECTION 50C OF THE ACT IS A SPECIAL PROVISION WHICH DEEMS THE VALUE ADOPTED O R ASSESSED BY STAMP VALUATION AUTHORITY AS THE FULL VALUE OF CONSIDERATION RECEIV ED ON TRANSFER OF LAND OR BUILDING OR BOTH, WHERE THE CONSIDERATION RECEIVED BY THE AS SESSEE ON TRANSFER OF SUCH CAPITAL ASSET IS LESS THAT THE VALUE ADOPTED BY STAMP VALUE AUTHORITIES. IN THE PRESENT CASE, THERE IS NO FINDING OF AO THAT ASSESSEE HAS INDEED RECEIVED THE CONSIDERATION ITA NO. 48/RJT/2016 (SMT. MANJULAGAURI P. MANDALIYA VS. ITO) . 4 WHICH WAS IN EXCESS OF WHAT IS STATED IN THE SALE A GREEMENT NOR HAS AO DOUBTED THE GENUINENESS OF SALE-DEED FURNISHED BY THE ASSESSEE. FURTHER, IT IS A SETTLED LAW THAT PENALTY PROCEEDINGS AND ARE QUITE DIFFERENT FR OM ASSESSMENT PROCEEDINGS, THE FINDING ON ASSESSMENT PROCEEDINGS, HOWEVER RELEVAN T AND GOOD MAY BE BUT THEY CANNOT BE CONCLUSIVE, IN SO FAR AS PENALTY PROCEEDI NGS ON CONCERNED. FURTHER, ONLY BECAUSE THE ASSESSEE AGREES TO THE ADDITIONS B ECAUSE OF DEEMING PROVISIONS, IT CANNOT BE CONSTRUED ON THE PART OF ASSESSEE OF FILI NG INACCURATE PARTICULARS OF INCOME CONSIDERING THE TOTALITY OF THE FACTS OF T HE CASE, WE ARE OF THE VIEW THAT IN THE PRESENT CASE, SINCE THE ADDITIONS HAVE BEEN MAD E UNDER DEEMING PROVISIONS, ON SUCH ADDITIONS, NO PENALTY U/S.271(1)(C) IS IMPOSSI BLE. WE THUS DIRECT THE DELETION OF PENALTY. THUS, THIS GROUND OF ASSESSEE IS ALLOW ED. 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN OPEN COURT ON 25/04/2016 SD/- SD/ - (S. S. GODARA) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED. 25/04/2016 S K SINHA COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 3 RAJKOT 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER //TRUE COPY// DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT ITA NO. 48/RJT/2016 (SMT. MANJULAGAURI P. MANDALIYA VS. ITO) . 5 1.DATE OF DICTATION AS PER TECHNICAL FAULT FORMAT 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E OTHER MEMBER 13-04-2016 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 26.4.16 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .26.4.16 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER