SHRI SANTOSH BHANSALI, Jaipur V. INCOME TAX OFFICER, WARD-2-1, Jaipur

ITA 509/JPR/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1736 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 13-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAILASH MANGAL DHK
• Assessee Lawyers: H M SINGHVI
• Keywords: Capital asset; Wrong claim; Capital Gains
• Section: 271(1)(c); 2(14); 10

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH A, JAIPUR JH JESK LH-'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE : SHRI RAMESH C.SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA-@ ITA NO. 509/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 SHRI SANTOSH BHANSALI 2654, SHAH BHAWAN, GHEE WALON KA RASTA, JOHRI BAZAR, JAIPUR CUKE VS. THE ITO WARD- 2(1), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAYPB 1353 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI H.M. SINGHVI, CA JKTLO DH VKSJ LS@ REVENUE BY: SHRI KAILASH MANGAL, ADDL. CIT-DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 26/09/2019 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 09 /12/2019 VKNS'K@ ORDER PER RAMESH C. SHARMA, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A), KOTA DATED 31-10-2018 FOR THE ASSESSMENT YEAR 2013-14, IN THE MATTER OF IMPOSITION OF PENALTY U/S 271(1)(C ) OF T HE ACT. 2.1 IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED FOR P ENALTY LEVIED WITH RESPECT TO DECLINE OF ASSESSEE'S CLAIM OF AGRICULTU RAL LAND WHICH IS NOT LIABLE TO CAPITAL GAINS TAX. ITA NO.509/JP/2018 SHRI SANTOSH BHANSALI VS ITO , WARD- 2(1 ), JAIPUR 2 2.2 THE ASSESSEE IS ALSO AGGRIEVED FOR DEFECTIVE NO TICE ISSUED BY THE AO WITHOUT MENTIONING THE LIMB UNDER WHICH PENALTY WAS TO BE IMPOSED. ACCORDINGLY, THE PENALTY ORDER IS NOT SUSTAINABLE I N LAW. 2.3 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE ALSO PLACED ON RECORD THE ORDER OF ITAT JAIPUR BENCH IN THE CAS E OF SHRI PRAKASH RAJ BHANSALI VS ITO (ITA NO.508/JP/2018 FOR THE ASSESS MENT YEAR 2013-14 DATED 5-03-2019) AND CONTENDED THAT UNDER THE SIMIL AR FACTS AND CIRCUMSTANCES OF THE CASE, THE PENALTY SO LEVIED BY THE AO FOR DECLINE OF THE ASSESSEE'S CLAIM OF AGRICULTURAL LAND WAS DELET ED BY THE TRIBUNAL. 2.4 WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORIT IES BELOW AND FOUND FROM THE RECORD THAT IN THE RETURN OF INCOME THE ASSESSEE HAS CLAIMED EXEMPTION IN RESPECT OF TREATING THE PROFIT ON SALE OF AGRICULTURAL LAND. ON ENQUIRY, THE AO FOUND THAT AGRICULTURAL LA ND WAS SITUATED WITHIN THE 8KM FROM THE MUNICIPAL LIMIT. THEREFORE, THE ASSESSEE IS LIABLE FOR CAPITAL GAINS TAX. ACCORDINGLY, THE AO LEVIED T HE CAPITAL GAINS TAX ON THE AGRICULTURAL LAND SOLD BY THE ASSESSEE BY DECLI NING THE ASSESSES CLAIM THAT THE LAND IS NOT FALLING WITHIN THE MUNICIPALIT Y LIMITS WHICH IS A CAPITAL ASSET CHARGEABLE TO TAX U/S 2(14) OF THE ACT. THE A SSESSEE ACCEPTED AOS CONTENTION AND BY FILING REVISED COMPUTATION OFFERE D THE GAINS TO CAPITAL GAINS TAX. HOWEVER, AO LEVIED PENALTY FOR DECLINE O F ASSESSEE'S CLAIM AND LEVIED PENALTY U/S 271(1)(C ) OF THE ACT. ITA NO.509/JP/2018 SHRI SANTOSH BHANSALI VS ITO , WARD- 2(1 ), JAIPUR 3 2.5 BY IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO LEVYING THE PENALTY. 2.6 WE HAD CAREFULLY GONE THROUGH THE ORDERS OF AUT HORITIES BELOW AS WELL AS ORDER OF THE COORDINATE BENCH SUBMITTED BY THE LD.AR OF THE ASSESSEE IN THE CASE OF SHRI PRAKASH RAJ BHANSALI V S ITO (SUPRA) WHEREIN UNDER SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE, THE DECLINE OF ASSESSEE'S CLAIM OF EXEMPTION U/S 10 OF THE ACT I N RESPECT OF AGRICULTURAL LAND WAS HELD TO BE NOT LIABLE FOR PENALTY U/S 271( 1)(C ) OF THE ACT. THE PRECISE OBSERVATION OF THE TRIBUNAL IN THE CASE OF SHRI PRAKASH RAJ BHANSALI VS ITO (SUPRA) IS AS UNDER:- 5. ON MERITS:- ONCE, IT IS A CLAIM OF THE ASSESSEE FOR EXEMPTION U/S 10 OF THE ACT AND THE AO HAS ALSO NOT DISPUTED THE PRI MARY FACTS DISCLOSED IN THE RETURN OF INCOME AS WELL AS CAPITAL ASSET IN QUESTI ON IS AN AGRICULTURAL LAND BUT ONLY ON THE INVESTIGATION CONDUCTED BY THE AO THROU GH CONCERNED TESHILDAR IT WAS FOUND THAT THE LAND IN QUESTION DOES NOT FALL I N THE EXCLUSION CLAUSE OF SECTION 2(14) OF THE ACT. THEREFORE, IT IS A HIGHLY DEBATABLE ISSUE AND THE CLAIM OF THE ASSESSEE IS BASED ON THE PRIMARY FACTS OF AGRICULTURAL INCOME WOULD BE REGARDED AS BONAFIDE CLAIM. HENCE, THE CLA IM OF EXEMPTION THOUGH REJECTED BY THE AO WOULD NOT IPSO FACTO AMOUNT TO F URNISHING INACCURATE PARTICULARS OF INCOME. THE CLAIM OF THE ASSESSEE WA S NEITHER FOUND TO BE BOGUS NOR ABSOLUTELY IMPERMISSIBLE BUT AS PER PROVI SIONS OF SECTION 2(14) AND PARTICULARLY THE ISSUE WHETHER THE LAND SOLD BY THE ASSESSEE WILL BE TREATED AS AGRICULTURAL LAND OR A CAPITAL ASSET IN TERMS OF SE CTION 2(14) OF THE ACT WAS SUBJECTED TO THE OUTCOME OF THE ENQUIRY CONDUCTED B Y THE AO. THEREFORE, THE SAID CLAIM MADE UNDER THE PROVISIONS OF THE ACT IS DISALLOWANED BY THE AO WOULD NOT ATTRACT THE PENALTY PROVISIONS OF SECTION 271(1)(C) OF THE ACT. THE HONBLE SUPREME COURT IN CASE OF CIT VS. RELIANCE P ETROPRODUCTS PVT. LTD. 322 ITR 158 HAS HELD THAT WHERE THE INFORMATION GIV EN BY THE ASSESSEE IS NOT FOUND TO BE INCORRECT THE ASSESSEE CANNOT BE HELD G UILTY OF FURNISHING INACCURATE PARTICULARS OF INCOME FOR THE PURPOSE OF LEVYING THE PENALTY U/S 271(1)(C) OF THE ACT. THE HONBLE SUPREME COURT HAS ALSO OBSERVED THAT MERELY MAKING A WRONG CLAIM DOES NOT AMOUNT TO FURN ISHING INACCURATE PARTICULARS OF INCOME IN THE ABSENCE OF FINDING THA T ANY DETAIL SUPPLIED BY THE ASSESSEE IS INCORRECT OR FALSE. ACCORDINGLY, IN VIE W OF THE FACTS AND ITA NO.509/JP/2018 SHRI SANTOSH BHANSALI VS ITO , WARD- 2(1 ), JAIPUR 4 CIRCUMSTANCES OF THE CASE THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT IS NOT SUSTAINABLE AND THE SAME IS DELETED. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. AS THE FACTS AND CIRCUMSTANCES IN THE INSTANT CASE ARE PARI MATERIA, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF I TAT JAIPUR BENCH IN THE CASE OF SHRI PRAKASH RAJ BHANSALI VS ITO (SUPRA), W E DIRECT THE AO TO DELETE THE PENALTY. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 09 /12/2 019. SD/- SD/- FOT; IKY JKO JESK LH 'KEKZ (VIJAY PAL RAO) (RAMESH C. SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 09 /12/ 2019 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI SANTOSH BHANSALI, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO WARD-2 (1), JAIPUR 3. VK;DJ VK;QDRVIHY ) @ CIT(A), 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.509/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR