POONAM K. ARORA, MUMBAI V. ITO 19(3)(3), MUMBAI

ITA 4916/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9253 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-12-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 14-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: FAROOKH IRANI
• Keywords: Sale consideration of property below Jantri Value; Salary income; Revised return
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C : MUMBAI BEFORE SHRI H.L. KARWA, PRESIDENT AND SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER ITA.NO.4916/MUM/2010 ASSESSMENT YEAR 2006-2007 POONAM K. ARORA MUMBAI 400 050 PAN ADJPA3814E VS. THE I.T.O. WARD 19 (3) (3) MUMBAI. (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI FAROOKH IRANI FOR RESPONDENT : SHRI RAKESH RANJAN, D.R. DATE OF HEARING : 17-12-2012 DATE OF PRONOUNCEMENT : 17-12-2012 ORDER PER H.L.KARWA, PRESIDENT THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE CIT(A)-30, MUMBAI DATED 19 TH MARCH, 2010 IN CONFIRMING THE PENALTY OF RS.2,19,080/- UNDER SECTION 271 (1) (C) OF THE I.T. ACT, 1961 (IN SHORT THE ACT) FOR THE ASSESSMENT YEAR 2006-2007. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE DERIVES INCOME FROM SALARY, HOUSE PROPERTY, BUSINESS CAPITAL GAINS AND OTHER SOURCES. FOR THE ASSESSMENT YEAR 2006-2007, THE ASSESSEE FILED HER R ETURN OF INCOME ON 30 TH OCTOBER, 2006 DECLARING TOTAL INCOME AT RS.3,81,323 /- WHICH WAS ASSESSED AT RS.14,55,250/- UNDER SECTION 143 (3) OF THE ACT ON 22 ND OCTOBER, 2008. IN THE RETURN OF INCOME, THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN AT RS. NIL ON SALE OF UNIT NO. 111-B AT SHALIMAR, MORYA PARK, AND HERI (W), MUMBAI-53. THE 2 ASSESSING OFFICER REQUIRED THE ASSESSEE TO FURNISH DETAILS IN THIS REGARD ALONG WITH SALE AGREEMENT OF THE UNIT. ON PERUSAL OF THE SALE AGREEMENT, THE ASSESSING OFFICER NOTICED THAT AS AGAINST THE AGREE MENT VALUE OF RS.53,34,100/-, THE REGISTRATION AUTHORITIES HAVE D ETERMINED THE VALUE OF THIS PROPERTY AT RS.63,22,691/-. THE ASSESSEE HAS ALSO C LAIMED COST OF IMPROVEMENT OF RS.2,24,237/- WHICH WAS PAID TOWARDS SOCIETY MAI NTENANCE CHARGES. THE ASSESSING OFFICER ADOPTED THE SALE VALUE OF SHOP AT R.63,22,691/- BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT AND ALSO T HE COST OF IMPROVEMENT OF RS.2,24,237/- WAS WITHDRAWN AND LONG TERM CAPITAL G AINS WAS DETERMINED AT RS.10,73,922/-. THE ASSESSING OFFICER INITIATED PEN ALTY PROCEEDINGS UNDER SECTION 271 (1) (C) OF THE ACT AND A SHOW CAUSE NOT ICE WAS ISSUED TO THE ASSESSEE. THE ASSESSEE IN HER REPLY STATED THAT THE RE IS NO POSITIVE ACT OF CONCEALMENT ON HER PART AND THE ACTION OF THE ASSES SEE WAS BONAFIDE AND THE RELEVANT PARTICULARS WERE SUBMITTED BEFORE THE ASSE SSING OFFICER AND HENCE PENALTY UNDER SECTION 271 (1) (C) OF THE ACT SHOULD NOT BE LEVIED. THE ASSESSING OFFICER DID NOT FIND ANY MERIT IN THE ABOVE SUBMISS IONS OF THE ASSESSEE AND HE LEVIED A MINIMUM PENALTY OF RS.2,19,080/- UNDER SEC TION 271 (1) (C) OF THE ACT. 3. ON APPEAL, THE CIT(A) CONFIRMED THE IMPUGNED PEN ALTY AND HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE VERY OUTSET SHRI FAROOKH IRANI, LEARNED C OUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE INVOLVED IN THIS CASE IS S QUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF I.T.A.T. B BENCH, MUMBAI IN THE CASE OF NEETA J. ARORA VS. ITO 19 (3) (3), MUMBAI IN I.T.A.NO. 49 17/MUM/2010 DATED 30.12.2011 RELATING TO THE ASSESSMENT YEAR 2006-200 7. IN THAT CASE ALSO ON SIMILAR FACTS, THE ASSESSING OFFICER LEVIED A PENAL TY OF RS.1,85,754/- UNDER SECTION 271 (1) (C) OF THE ACT, FOR THE ASSESSMENT YEAR 2006-2007. IN THAT CASE, THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN AT RS . NIL ON SALE OF UNIT NO.110-A AT SHALIMAR, MORYA PARK, ANDHERI (WEST), M UMBAI-53. THE ASSESSEE SOLD THE PROPERTY FOR A CONSIDERATION OF RS.46,67,3 20/- BUT AS PER STAMP DUTY VALUATION, THE MARKET VALUE OF THE PROPERTY IS RS.5 5,30,875/-. THE ASSESSEE 3 HAS CLAIMED COST OF IMPROVEMENT AT RS.1,85,186/- PA ID TOWARDS SOCIETY MAINTENANCE CHARGES. THE ASSESSING OFFICER ADOPTED SALE VALUE OF RS.55,30,875/- AS DETERMINED BY THE REGISTRATION AU THORITIES BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT AND WITHDRAWN THE COST OF IMPROVEMENT OF RS.1,85,186/- AND DETERMINED THE LONG TERM CAPITAL GAIN AT RS.1,10,559/-. THE ASSESSING OFFICER LEVIED THE PENALTY AT RS.1,85,754 /- UNDER SECTION 271 (1) (C) OF THE ACT, WHICH WAS CONFIRMED BY THE CIT(A). IN S ECOND APPEAL, THE TRIBUNAL VIDE ITS ORDER DATED 30 TH DECEMBER, 2011 CANCELLED THE PENALTY OBSERVING AS UNDER : 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT INADVERTENTLY, THE ASSESSEE HAS SHOWN THE SALE CONSIDERATION OF RS.46, 67,320/- INSTEAD OF RS.55,30,875/-. WHEN THE MISTAKE WAS NOT ICED, IMMEDIATELY THE ASSESSEE HAD FILED REVISED COMPUTAT ION BEFORE THE A.O. HE SUBMITTED THAT THERE WAS NO INTENTION ON TH E PART OF THE ASSESSEE TO CONCEAL ANY INCOME OR EVADE ANY TAX. TH EREFORE, NO PENALTY COULD BE LEVIED. HE ALSO PRODUCED A DECISIO N OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF RE NU HINGORANI VS. ACIT IN ITA. NO. 2210/M/2010 ORDER DATED 22.12.2010 , WHEREIN, ON SIMILAR FACTS, THE PENALTY IMPOSED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) HAS BEEN DELETED. THE RELEV ANT PORTION OF THE OBSERVATION BY THE COORDINATE BENCH DELETING THE PE NALTY IS AS FOLLOWS : WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RELEV ANT RECORD. WE FIND THAT THE A.O. HAD MADE ADDITION OF RS.9,00,824 /- BEING DIFFERENCE BETWEEN THE SALE CONSIDERATION AS PER SALE AGREEMEN T AND THE VALUATION MADE BY THE STAMP VALUATION AUTHORITY. TH US, THE ADDITION HAS BEEN MADE BY THE A.O. BY APPLYING THE PROVISION S OF SECTION 50C OF THE ACT. IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT THE A.O. HAS NOT QUESTIONED THE ACTUAL CONSIDERATION RECEIVED BY THE ASSESSEE BUT THE ADDITION IS MADE PURELY ON THE BASIS OF DEEMING PROVISIONS OF THE 4 INCOME TAX ACT, 1961. THE A.O. HAS NOT GIVEN ANY FI NDING THAT THE ACTUAL SALE CONSIDERATION IS MORE THAN THE SALE CON SIDERATION ADMITTED AND EMTNIONED IN THE SALE AGREEMENT. THUS IT DOES N OT AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. IT IS ALSO NOT THE CASE OF THE REVENUE THAT THE ASS ESSEE HAS FAILED TO FURNISH HE RELEVANT RECORD AS CALLED BY THE A.O. TO DISCLOSE THE PRIMARY FACTS. THE ASSESSEE HAS FURNISHED ALL THE RELEVANT FACTS, DOCUMENTS/MATERIAL INCLUDING THE SALE AGREEMENT AND THE A.O. HAS NOT DOUBTED THE GENUINENESS AND VALIDITY OF THE DOC UMENTS PRODUCED BEFORE HIM AND THE SALE CONSIDERATION RECEIVED BY T HE ASSESSEE. UNDER THESE FACTS AND CIRCUMSTANCES, IT CANNOT BE S AID THAT THE ASSESSEE HAS NOT FURNISHED CORRECT PARTICULARS OF I NCOME. MERELY BECAUSE THE ASSESSEE AGREED FOR ADDITION ON THE BAS IS OF VALUATION MADE BY THE STAMP VALUATION AUTHORITY WOULD NOT BE A CONCLUSIVE PROOF THAT THE SALE CONSIDERATION AS PER THIS AGREE MENT 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 HONBLE SUPREM E COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. (S UPRA), THE PENALTY LEVIED U/S. 271 (1) (C) IS NOT SUSTAINABLE. THE SAM E IS DELETED. 5. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PE RUSED THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS INADVERTEN TLY NOT CONSIDERED THE COST OF VALUATION OF THE PROPERTY AS DETERMINED BY THE VALUATION AUTHORITIES. HOWEVER, LATER ON IMMEDIATEL Y, VIDE REVISED COMPUTATION, THE ASSESSEE HAS SHOWN THE AMOUNT BEFO RE THE ASSESSING OFFICER. WE ALSO FIND ON SIMILAR FACTS, A COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF RENU HINGORANI (SUP RA) HAS DELETED THE PENALTY IMPOSED BY THE REVENUE AUTHORITIES. RES PECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH AND ON THE FACTS AND CIRCUMSTANCES OF THIS CASE, WE ARE OF THE OPINION T HAT IT IS NOT A FIT 5 CASE TO LEVY PENALTY UNDER SECTION 271 (1) (C) OF T HE ACT. ACCORDINGLY, WE DELETE THE SAME. 5. THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THA T OF THE CASE OF NEETA J. ARORA (SUPRA). IN OUR CONSIDERED VIEW THE DECISION RENDERED BY THE TRIBUNAL IN THE CASE OF NEETA J. ARORA (SUPRA) IS SQUARELY APPL ICABLE TO THE FACTS OF THE PRESENT CASE. RESPECTFULLY FOLLOWING THE ORDER OF T HE TRIBUNAL DATED 30 TH DECEMBER,2011 PASSED IN THE CASE OF NEETA J. ARORA (ITA.NO.4917/MUM/2010) (SUPRA), WE HOLD THAT IN THE FACTS AND CIRCUMSTANCE S OF THE PRESENT CASE, NO PENALTY CAN BE VALIDLY LEVIED IN THIS CASE. BEFORE PARTING WITH THIS CASE, WE MAY OBSERVE THAT THE DECISION RELIED ON BY SHRI RAKESH RANJAN, LEARNED D.R. PASSED IN THE CASE OF M/S. AMZEL LTD. IN ITA. NO. 5070/MUM /2011 DATED 30 TH MAY, 2012 RELATING TO ASSESSMENT YEAR 2006-2007 IS NOT A PPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THAT CASE, THE ASSESSEE NEITHE R REVISED RETURN OF INCOME NOR FILED ANY REVISED COMPUTATION DURING ASSESSMENT PROCEEDINGS. HOWEVER, IN THE INSTANT CASE, THE ASSESSEE DID FILE THE REVISED COMPUTATION BEFORE PASSING OF THE ASSESSMENT ORDER. 6. IN VIEW OF THE ABOVE DISCUSSION, WE CANCEL THE P ENALTY AND ALLOW THE APPEAL OF THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 17-12-2012. SD/- SD/- (N.K.BILLAIYA) (H.L.KARWA) ACCOUNTANT MEMBER PRESIDENT MUMBAI, DATE 17 TH DECEMBER, 2012 VBP/- 6 COPY TO 1. POONAM K. ARORA, MODERN CREAM CENTRE COMET APARTMEN T, 16, TURNER ROAD, OPP. TALAO BANDRA (W), MUMBAI 400 050 PAN ADJPA3814E 2. I.T.O. WARD 19 (3) (3), MUMBAI. 3. CIT(A) - 30 , R.NO. 17 & 22, 3 RD FLOOR, B - WING, MITTAL COURT, NARIMAN POINT, MUMBAI 400 021. 4. CIT, CITY - 1 9 , MUMBAI 5. DR BENCH 6. GUARD FILE (TRUE COPY) BY ORDER ASST. REGISTRAR, I.T.AT. MUMBAI BENCHE S MUMBAI.