NEETA J.. ARORA, MUMBAI V. ITO 19(3)(3), MUMBAI

ITA 4917/MUM/2010

• Counselvise Citation: 491719914 RSA 2010
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 14-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P C MAURYA
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, MUMBAI. BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND PRAMOD KUMAR, ACCOUNTANT MEMBER I.T.A NO. 4917 / MUM/2010 ASSESSMENT YEAR: 2006-07 NEETA J. ARORA .. APPELLANT MODERN CREAM CENTRE COMET APARTMENT, 16, TURNER ROAD OPP TALAO BANDRA (W), MUMBAI-50 PA NO.AAFPA 4241 E VS INCOME TAX OFFICER 19(3)(3) .. RESPONDENT , MUMBAI. APPEARANCES: FAROOKH IRANI, FOR THE APPELLANT P.C.MAURYA, FOR THE RESPONDENT DATE OF HEARING : 27.12.2011 DATE OF PRONOUNCEMENT : 30 -12-2011 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSEE- APPELLANT HAS CA LLED INTO QUESTION CORRECTNESS OF THE CIT(A)S ORDER DATED 19 TH MARCH, 2010, CONFIRMING PENALTY OF RS.1,85,754 IMPOSED UNDER SECTION 271(1)(C) OF THE INC OME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2006-07. 2. FACTS IN BRIEF ARE THAT DURING THE COURSE OF ASSESSMEN T PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHOWN LONG TE RM CAPITAL GAIN AT RS.NIL ON SALE OF UNIT NO.110-A AT SHALIMAR, MORYA PA RK, ANDHERI(WEST), MUMBAI-53. I.T.A NO. 4917 / MUM/2010 ASSESSMENT YEAR: 2006-07 2 FROM THE DETAILS FILED BY THE ASSESSEE, THE ASSESSING OFFIC ER NOTICED THAT THE ASSESSEE HAS 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.55, 30,875. IT WAS ALSO NOTICED BY THE AO THAT THE ASSESSEE HAS CLAIMED COST OF IMPROVEMENT RS.1,85,186 PAID TOWARDS SOCIETY MAINTENANCE CHARGES. IT WAS IN THIS BACKGROUND THAT THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE LONG TERM CAPITAL GAIN BE NOT COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 50C OF THE I.T.ACT AND THE COST OF IMPROVEMENT BE NOT WITHDRAWN. AFTER CONSIDERING THE ASSESSEES SUBMISSION, TH E AO ADOPTED THE SALE VALUE OF RS.55,30,875 AS DETERMINED BY THE REGISTRATIO N AUTHORITIES BY INVOKING THE PROVISIONS OF SECTION 50C OF THE I.T.ACT AND WITHDRAW N THE COST OF IMPROVEMENT OF RS.1,85,186 AND DETERMINED THE LONG TERM CAPITAL GAI N AT RS.9,10,559. PENALTY PROCEEDINGS WERE ALSO INITIATED U/S.271(1(C) FOR FURNI SHING INACCURATE PARTICULARS OF INCOME AND FINALLY PENALTY OF RS.1,85,754 WAS LEVIED AT 100% OF TAX SOUGHT TO BE EVADED. 3. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) CHALLENGING THE LEVY OF PENALTY BUT WITHOUT ANY SUCC ESS. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT INADVE RTENTLY, THE ASSESSEE HAS SHOWN THE SALE CONSIDERATION OF RS.46,67,320 INSTEAD OF RS.55,30,875. WHEN THE MISTAKE WAS NOTICED, IMMEDIATELY THE ASSESSEE HAD FILED R EVISED COMPUTATION BEFORE THE AO. HE SUBMITTED THAT THERE WAS NO INTENTION ON THE PART OF THE ASSESSEE TO CONCEAL ANY INCOME OR EVADE ANY TAX. THEREFORE, NO PENALTY COULD BE LEVIED. HE ALSO PRODUCED A DECISION OF THE COORDINATE BENCH OF THIS T RIBUNAL IN THE CASE OF RENU HINGORANI VS ACIT IN ITA NO.2210/M/2010 ORDER DATED 22.12.2010, WHEREIN, ON SIMILAR FACTS, THE PENALTY IMPOSED BY THE ASSESSING OFFICE R AND CONFIRMED BY THE CIT(A) HAS BEEN DELETED. THE RELEVANT PORTION OF T HE OBSERVATION BY THE COORDINATE BENCH DELETING THE PENALTY IS AS FOLLOWS: WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RELEVAN T RECORD. WE FIND THAT THE AO HAD MADE ADDITION OF RS.9,00,824/- BEING DIFF ERENCE BETWEEN THE SALE CONSIDERATION AS PER SALE AGREEMENT AND THE VALUATION MADE BY THE STAMP VALUATION AUTHORITY. THUS, THE ADDITION HAS BEEN M ADE BY THE AO BY I.T.A NO. 4917 / MUM/2010 ASSESSMENT YEAR: 2006-07 3 APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT. IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT THE AO HAS NOT QUESTIONED THE AC TUAL CONSIDERATION RECEIVED BY THE ASSESSEE BUT THE ADDITION IS MADE PURELY ON THE BASIS OF DEEMING PROVISIONS OF THE INCOME TAX ACT, 1961. THE AO HAS NOT GIVEN ANY FINDING THAT THE ACTUAL SALE CONSIDERATION IS MORE TH AN THE SALE CONSIDERATION ADMITTED AND MENTIONED IN THE SALE AGREEMENT. THUS IT DOES NOT AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTI CULARS OF INCOME. IT IS ALSO NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS FA ILED TO FURNISH THE RELEVANT RECORD AS CALLED BY THE AO TO DISCLOSE THE P RIMARY FACTS. THE ASSESSEE HAS FURNISHED ALL THE RELEVANT FACTS, DOCUMENTS/M ATERIAL INCLUDING THE SALE AGREEMENT AND THE AO HAS NOT DOUBTED THE GEN UINENESS AND VALIDITY OF THE DOCUMENTS PRODUCED BEFORE HIM AND THE SALE CON SIDERATION RECEIVED BY THE ASSESSEE. UNDER THESE FACTS AND CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT FURNISHED CORRECT PARTICULARS OF IN COME. MERELY BECAUSE THE ASSESSEE AGREED FOR ADDITION ON THE BASIS OF V ALUATION MADE BY THE STAMP VALUATION AUTHORITY WOULD NOT BE A CONCL USIVE PROOF THAT THE SALE CONSIDERATION AS PER THIS AGREEMENT WAS INCORRECT AND W RONG. 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 DECISI ON OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V/S RELIANCE PETROP RODUCTS PVT.LTD ( SUPRA), THE PENALTY LEVIED U/S 271( 1)( C ) IS NOT SUST AINABLE. THE SAME IS DELETED. 5. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PER USED THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS INADVERTENTLY NOT CONSIDERED THE COST OF VALUATION OF THE PROPERTY AS DETERMINED BY THE VALUA TION AUTHORITIES. HOWEVER, LATER ON IMMEDIATELY, VIDE REVISED COMPUTATION, THE ASSESSEE H AS SHOWN THE AMOUNT BEFORE THE ASSESSING OFFICER. WE ALSO FIND ON SIMILAR FA CTS, A COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF RENU HINGORANI (SUPRA) HAS DEL ETED THE PENALTY IMPOSED BY THE REVENUE AUTHORITIES. RESPECTFULLY FOLLOWING TH E DECISION OF THE COORDINATE BENCH AND ON THE FACTS AND CIRCUMSTANCES OF THIS CASE, WE ARE OF THE OPINION THAT IT IS NOT A FIT CASE TO LEVY PENALTY UNDER SECTION 271(1) (C) OF THE ACT. ACCORDINGLY, WE DELETE THE SAME. 6. IN THE RESULT, APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER, 2011 SD/- (N.V.VASUDEVAN) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI, DATED DECEMBER 2011 PARIDA I.T.A NO. 4917 / MUM/2010 ASSESSMENT YEAR: 2006-07 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-30 4. COMMISSIONER OF INCOME TAX,CITY-19 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH B MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI