Sh. Gurvinder Singh Sarkaria, Amritsar. V. The Income-tax Officer, Amritsar.

ITA 517/ASR/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0712 (ITAT-AMRITSAR)
• Duration Of Justice: 4 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-06-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 12-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Question of law; Cost of acquisition; Fair market value; Wrong claim; Difference of opinion; Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NOS.517 & 338(ASR)/2011 & 2014 ASSESSMENT YEAR:2006-07 PAN: APNPS2028C SH. GURVINDER SINGH SARKARIA, VS. INCOME TAX OFFIC ER, GUMATALA, DISTT. AMRITSAR. WARD-5(2), AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P.N. ARORA, ADVOCATE RESPONDENT BY: SH. UMESH TAKYAR, DR DATE OF HEARING: 02/06/2016 DATE OF PRONOUNCEMENT: 03/06/2016 ORDER PER T.S. KAPOOR, AM THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDERS OF LD. CIT(A), AMRITSAR, DATED 14.0 7.2011 AND 27.03.2014 RESPECTIVELY. 2. IN ITA NO.517(ASR)/2011, THE ASSESSEE IS AGGRIEV ED WITH THE ACTION OF THE LD. CIT(A) BY WHICH HE HAD CONFIRMED THE AD DITION MADE BY THE AO, WHEREAS IN ITA NO.338(ASR)/2014, THE ASSESSEE I S AGGRIEVED WITH THE ACTION OF THE LD. CIT(A) BY WHICH, HE HAD CONFIRMED THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT IMPOSED BY THE A.O. 3. BOTH THESE APPEALS WERE HEARD TOGETHER AND, THER EFORE, FOR THE SAKE OF CONVENIENCE, A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. ITA NOS 517 & 338(ASR)2011 & 2014 2 4. THE BRIEF FACTS, AS NOTED IN THE ASSESSMENT ORDE R ARE THAT THE ASSESSEE DURING THE YEAR SOLD HEREDITARY LAND MEASU RING 4140 SQ. YDS AND SINCE THE LAND WAS HEREDITARY AND WAS ACQUIRED BEFORE 01.04.1981 AND THEREFORE, COST OF ACQUISITION WAS TAKEN ON THE BASIS OF FAIR MARKET VALUE AS ON 01.04.1981. THE ASSESSEE HAD ADOPTED TH E FAIR MARKET VALUE AS ON 01.04.1981 @ RS.358/- PER SQ. YD ON THE BASIS OF A CERTIFICATE FROM THE TEHSILDAR. HOWEVER, THE AO HAD IN THE EARLIER Y EAR OBTAINED THE VALUATION REPORT FROM THE GOVERNMENT VALUER FOR A P ART OF SUCH LAND WHERE THE GOVT. VALUER HAD VALUED THE LAND SOLD BY THE ASSESSEE EARLIER AT RS.100/- PER SQ.YD. THEREFORE, THE AO APPLIED TH E RATE OF RS.100/- PER SQ. YD TO ARRIVE AT THE INDEXED COST OF ACQUISITION FOR THE PURPOSE OF CALCULATION OF CAPITAL GAIN. THE AO IN VIEW OF THE CONCEALMENT OF INCOME ON ACCOUNT OF WRONG CLAIM OF FAIR MARKET VALUE ALSO IMPOSED PENALTY U/S 271(1)(C) OF THE ACT. 5. AGGRIEVED WITH THE ORDER, THE ASSESSEE FILED THE APPEAL BEFORE THE LD. CIT(A), WHO ALSO UPHELD THE ACTION OF THE A.O. FOR CAPITAL GAINS AND FOR PENALTY. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 6. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN EARLIER YEAR, THE RATE OF RS.100/- PER SQ. YD. FOR LAND SOLD BY THE ASSESSEE IN THAT YEAR WAS ACCEPTED, AS THERE WAS NO TAX EFFE CT AND THE ASSESSEE WAS NOT AGGRIEVED AND, THEREFORE, THE ASSESSEE DID NOT FILE THE APPEAL BEFORE THE LD. CIT(A), BUT THAT DOES NOT MEAN THAT THE ASSESSEE HAD ACCEPTED THE RATE OF RS.100/- PER SQ. YD, AS WORKED OUT BY THE AO. IT WAS ITA NOS 517 & 338(ASR)2011 & 2014 3 SUBMITTED THAT THE APPEAL WAS NOT FILED AS THE COST OF APPEAL WAS MORE THAN THE AMOUNT OF TAX GAIN, AS THERE WAS NIL TAX GAIN. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THIS YEAR, THE ASSESSEE HAD TAKEN FAIR MARKET VALUE ON THE BASIS OF THE CERTIFICATE FROM T HE TEHSILDAR, WHICH WAS PRODUCED BEFORE THE AO, WHICH IS APPARENT FROM THE FINDINGS OF THE AO IN THE THIRD PARA OF HIS ORDER, WHERE HE HAS MENTIONED THE FACT OF HAVING FILED BY THE ASSESSEE A CERTIFICATE FROM THE TEHSIL DAR. HE FURTHER SUBMITTED THAT THE LD. CIT(A)S FINDINGS THAT THE ASSESSEE HAD NOT FILED SUCH CERTIFICATE, NEITHER BEFORE HIM NOR BEFORE THE AO IS WRONG. HE SUBMITTED THAT THE VALUATION REPORT OBTAINED BY THE ASSESSEE IN THE EARLIER YEAR CANNOT BE USED FOR ASSUMING THE FAIR M ARKET VALUE IN THIS YEAR AS IN THIS YEAR, THE LAND WAS DIFFERENT AS LA ND SOLD IN THAT YEAR WAS ONLY 1110 SQ.YDS WHEREAS IN THE PRESENT YEAR, THE L AND IS 4110 SQ. YDS AND IN VIEW OF THESE FACTS, IT WAS SUBMITTED THAT T HE ACTION OF THE AUTHORITIES BELOW WAS NOT CORRECT. 7. ARGUING THE APPEAL WITH RESPECT TO PENALTY CONFI RMED BY THE LD. CIT(A), THE LD. COUNSEL SUBMITTED THAT THE PENALTY IN THIS CASE WAS NOT IMPOSABLE AT ALL, AS NO PARTICULARS OF INCOME WAS CONCEALED AND ALL THE RELEVANT INFORMATION FOR THE PURPOSE OF CALCULATIO N OF THE CAPITAL GAIN WAS FILED WITH THE AO AND IN FACT FROM THE INFORMAT ION FILED BY THE ASSESSEE, THE AO CALCULATED THE CAPITAL GAIN. FURTH ERMORE, IT WAS ARGUED THAT THE FAIR MARKET VALUE ADOPTED BY THE ASSESSEE AND BY THE AUTHORITIES BELOW ON THE BASIS OF CERTIFICATE FROM TEHSILDAR A ND CERTIFICATE FROM THE ITA NOS 517 & 338(ASR)2011 & 2014 4 GOVERNMENT VALUER ITSELF INDICATE THAT THE ADDITION OF CAPITAL GAIN WAS MADE ON THE BASIS OF DIFFERENCE OF OPINION WITH RE SPECT OF ADOPTION OF FAIR MARKET VALUE. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT WAS A DEBATABLE ISSUE AND THEREFORE, THE PENALTY WAS NO T IMPOSABLE. THE LD. COUNSEL FOR THE ASSESSEE, IN THIS RESPECT RELIED UP ON A CASE LAWS DECIDCED BY THE MUMBAI BENCH VIDE ORDER DATED 07.10.2015 IN ITA NO.936 & 937(ASR)/2015. THE LD. COUNSEL SUBMITTED THAT IN TH IS CASE UNDER SIMILAR FACTS AND CIRCUMSTANCES, THE TRIBUNAL HAD DISMISSE D THE APPEAL OF THE REVENUE WHEREIN THE LD. CIT(A) HAD DELETED THE PENA LTY AND FILED A COPY OF THE SAID ORDER. 8. WITHOUT PREJUDICE, THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT THERE WAS NO WRONG FURNISHING OF PARTICULARS OF INC OME AND EVERY CLAIM NOT ADMITTED BY THE REVENUE AUTHORITIES CANNOT ITS ELF LEAD TO THE IMPOSITION OF PENALTY AS HELD BY THE HONBLE SUPREM E COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD. (2010) 230 CTR (SC) 320. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, IT WAS SUBMI TTED THAT THE PENALTY IMPOSED AND CONFIRMED BY THE LD. CIT(A) IS NOT JUST IFIED. 9. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND OUR ATTENTION WAS INVITED TH AT IN EARLIER YEARS, THE ASSESSEE HAD HIMSELF ADOPTED THE VALUE OF RS.225/- SQ. YDS AS AGAINST RS.350/- PER SQ. YD, AS TAKEN IN THE PRESENT YEAR. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE GO NE THROUGH THE MATERIAL AVAILABLE ON RECORD. FIRST, WE TAKE UP ITA NO.517(ASR)/2011. WE ITA NOS 517 & 338(ASR)2011 & 2014 5 FIND THAT THAT THE ONLY DISPUTE IN THIS CASE IS THA T THE FAIR MARKET VALUE AS ON 01.04.1981 TO BE ADOPTED FOR THE PURPOSE OF CALCULATION OF CAPITAL GAIN. WE FIND THAT IN THE EARLIER YEARS, AS AGAINST THE CLAIM OF THE ASSESSEE AT RS.225/- PER SQ. YD, THE AO HAD TAKEN T HE VALUE AT RS.100/- PER SQ. YD ON THE BASIS OF VALUATION REPORT BY THE GOVERNMENT VALUER AND IN THE PRESENT YEAR, THE ASSESSEE HAD TAKEN FA IR MARKET VALUE OF RS.358 PER SQ.YD., WHEREAS THE AO AND THE CIT(A) H AD APPLIED RS.100/- PER SQ.YD ON THE BASIS OF EARLIER YEARS. THE ASSESS EE HAD ACCEPTED THE VALUE OF RS.100/- PER SQ. YD. AS HE DID NOT PREFER APPEAL. HOWEVER, WE FIND THAT IN EARLIER YEAR, THE IMPACT OF TAX WAS NO T THERE AND THEREFORE, THE ASSESSEE MAY NOT HAVE FILED APPEAL AGAINST THE VALUE OF RS.100/- PER SQ. YD ADOPTED BY THE AO AND MOREOVER, IN EARLIER YEAR, THE ASSESSEE HAD NOT FILED ANY CERTIFICATE FROM TEHSILDAR IN SUPPORT OF HIS CLAIM FOR FAIR MARKET VALUE, WHEREAS IN THE PRESENT YEAR, THE ASSE SSEE HAD FILED A COPY OF TEHSILDAR WHEREIN THE TEHSILDAR HAD CONFIRMED T HE VALUE OF LAND SOLD BY THE ASSESSEE AT RS.350/- PER SQ. YD. THE COPY O F CERTIFICATE OF VALUATION BY TEHSILDAR IS PLACED AT PB 16. THE LD . CIT(A) HAS NOT ACCEPTED THE CLAIM OF THE ASSESSEE FOR RS.350/- PE R SQ. YD BY HOLDING THAT THE ASSESSEE HAD NOT FILED A CERTIFICATE FROM THE TEHSILDAR WITH THE AO OR WITH HIM, WHEREAS WE FIND THAT THE SAID CERTI FICATE WAS FILED WITH THE A.O.AND WHICH FACT IS APPARENT FROM THE FOLLOW ING FINDINGS OF THE AO: FROM THE PERUSAL OF COMPUTATION OF INCOME IT IS FO UND THAT ASSESSEE HAS BEEN SHOWN LONG TERM CAPITAL GAIN AS NIL. ASSESSEE HAS SOLD 4140 SQ. YDS LAND IN BITS & PIECES AND HAS APPLIED COST OF ACQUI SITION RATE RS.358/- WHILE IT WAS FOUND, VALUATION OF THIS AREA WAS ADOP TED BY MY PREDECESSOR ITA NOS 517 & 338(ASR)2011 & 2014 6 AT RS.100/- PER SQ. YD AFTER OBTAINING VALUATION RE PORT FROM GOVT. VALUER OF THE DEPARTMENT DATED 30.12.205 IN THE AY 2003-04. C OPY OF ASSESSMENT ORDER FOR THE AY 2003-04 BEARING OFFICE NOTE AND CO PY OF VALUATION REPORT HAS BEEN GIVEN TO THE ASSESSEE FOR CONFRONTATION AN D THIS MATTER WAS ALSO DISCUSSED IN THE STATEMENT OF ASSESSEE. IN RESPONSE TO WHICH HE HAS FURNISHED CERTIFICATE FROM THE TEHSILDAR BUT APPLIE D THE RATES AS PER THIS OFFICE GOVT. APPROVED VALUER. ACCORDING TO GOVT. AP PROVED VALUER REPORT IS VALUE AS ON 01.04.1981 WORKS OUT TO RS.414000/- @ R S.100/- PER SQ. YD. 11. FROM THE ABOVE FINDINGS OF THE AO, AS CONTAINED IN PARA-3, WE FIND THAT THE ASSESSEE HAD DULY FILED COPY OF CERTIFICAT E FROM TEHSILDAR AND THEREFORE, THE FINDING OF THE LD. CIT(A) IS WRONG T O THAT EXTENT. NOW, TO DECIDE THE FAIR MARKET VALUE AS ON 1.4.1981, THE A PPROPRIATE AUTHORITIES FOR CERTIFYING THE LAND RATES IS SUB REGISTRAR AND THEREFORE, CERTIFICATE OF TEHSILDAR IS MORE IMPORTANT. HOWEVER, SINCE THE ASS ESSEE HIMSELF HAD ACCEPTED THE FAIR MARKET VALUE AT RS.100/- PER SQ. YD. IN THE PRECEDING YEAR BY NOT FILING THE APPEAL AGAINST THE ASSESSMEN T ORDER, WE DEEM IT APPROPRIATE TO TAKE AN AVERAGE OF TWO RATES WHICH C OMES OUT AT RS.225/- PER SQ. YD. THE RATE OF RS.225/- PER SQ. YD. (BEING RS.350 + RS.100/-) IS ALSO IN CONSONANCE WITH THE RATE ADOPTED BY THE AS SESSEE AT RS.225/- PER SQ. YD IN THE EARLIER YEAR. THEREFORE, WE DIREC T THE AO TO CALCULATE THE CAPITAL GAINS BY TAKING FAIR MARKET VALUE AS ON 01. 04.1981 AT RS.225/- PER SQ. YD INSTEAD OF RS.100/- TAKEN BY HIM. IN VI EW OF THE ABOVE, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 12. NOW, WE TAKE UP APPEAL IN ITA NO.338(ASR)/2014. WE FIND THAT THE AO HAD IMPOSED PENALTY U/S 271(1)(C) OF THE ACT ON THE BASIS THAT THE ASSESSEE HAD ADOPTED LOWER FAIR MARKET VALUE AS COM PARED TO THE VALUE ADOPTED BY THE REVENUE AUTHORITIES. WE FIND THAT T HIS IS A DEBATABLE ITA NOS 517 & 338(ASR)2011 & 2014 7 ISSUE AND EXACT VALUE CANNOT BE DETERMINED AND ON LY A FAIR IDEA CAN BE TAKEN TO ARRIVE AT FAIR MARKET VALUE. OUR DECISION TO ADOPT AVERAGE VALUE OF THE TWO RATES ALSO SUPPORTS THE FACT THAT IT IS A DEBATABLE ISSUE. THE TEHSILDAR HAS TAKEN THE VALUE @ RS.350/- PER SQ. YA RD AND GOVT. VALUER HAS TAKEN THE VALUE @ RS.100/- PER SQ. YARD WHEREAS WE HAVE TAKEN THE VALUE AT RS.225/- PER SQ. YARD, THEREFORE, ALL THE SE THREE RATES ARE GUESS WORK ONLY. MOREOVER, THE MARKET VALUE OF A PARTICU LAR LAND DEPENDS UPON THE LOCATION AS WELL AS SIZE OF LAND SOLD. IN EARLIER YEAR, THE ASSESSEE HAD SOLD 1110 SQ. YARDS WHEREAS IN THE PRESENT YEAR HE HAS SOLD 4140 SQ. YARDS OF LAND. WE FURTHER FIND THAT THE ASSESS EE HAD DISCLOSED ALL MATERIAL FACTS BEFORE THE AO AND THE AO HAD IMPOSE D PENALTY ONLY ON THE BASIS OF HIS TAKING A DIFFERENT FAIR MARKET VAL UE AS COMPARED TO THE VALUE TAKEN BY THE ASSESSEE. 13. WE FIND THAT THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. G.M. FINANCE TRADING CO. IN ITA NOS. 936 & 937(MUM)/2014, VIDE ORDER DATED 7.10.2015, UNDER SIMILAR FACTS AND CIRCUMSTANCES HAD DISMISSED THE APPEAL OF THE REVENUE, WHEREBY THE LD . CIT(A) HAD DELETED THE PENALTY UNDER SIMILAR FACTS AND CIRCUMSTANCES. FOR THE SAKE OF CONVENIENCE, THE QUESTION FRAMED IN THE SAID ORDER IN ITA NO.936(ASR)/2014 IS REPRODUCED BELOW: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING PENALTY LEVIED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 OF RS.63,66,835/- WITHOUT APPR ECIATING THAT THE ASSESSEE HAS TAKEN EXCESSIVE COST VALUE OF THE LAND WITHOUT ANY EVIDENCE IN ORDER TO REDUCE ITS CAPITAL GAIN TAX LIABILITY. THE LD. CIT(A) FURTHER FAILED TO APPRECIATE THAT THE ASSESSEE HAD FILED INACCURAT E PARTICULARS WHICH HE ITA NOS 517 & 338(ASR)2011 & 2014 8 WAS NOT ABLE TO EXPLAIN DURING THE ASSESSMENT AND P ENALTY PROCEEDINGS ( REFER PARA 10 OF ITATS ORDER AGAINST QUANTUM APPE AL) 14. THE SAID QUESTION HAS BEEN ANSWERED BY THE TRIB UNAL IN FAVOUR OF THE ASSESSEE AND THE RELEVANT FINDINGS OF THE TRIBU NAL ARE REPRODUCED BELOW: 5.5 LET US NOW, ANALYSE FACTS OF THE CASE AND EXPL ANATION OF THE ASSESSEE, IN THE ASSESSMENT PROCEEDINGS AS WELL AS IN PENALTY PROCEEDINGS AS PER FACTS ON RECORD, THE ASSESSEE FI RM HAD SOLD INDUSTRIAL LAND VIDE TWO AGREEMENTS DATED 30.04.200 4 ALONG WITH STRUCTURES THEREON TO ONE M/S. SIDHI REAL ESTATE DE VELOPERS FOR A TOTAL CONSIDERATION OF RS. 5,06,70,000/-. THE LAND WAS PURCHASED IN 1966 AND THE ASSESSEE WAS ENTITLED TO ADOPT ITS FAI R MARKET VALUE AS ON 01.04.1981 AS ITS COST. ACCORDINGLY, THE ASSE SSEE ADOPTED THE FAIR MARKET 01.04.1981 ON THE BASIS OF THE REPORT G IVEN BY ITS REGISTERED VALUER, @ RS. 18.80 PER SQ. FT. THE AO H AD ADOPTED THE RATE OF LAND @ RS. 2.51 PER SQ. FT., WHEREAS THE CI T(A) ADOPTED THE RATE OF LAND @ RS. 5.20 PER SQ. FT. THE ASSESSING O FFICER AND THE LD CIT(A) DID NOT ACCEPT THE VALUERS REPORT. IN THE V ALUATION REPORT, DETAILED REASONING WAS GIVEN IN SUPPORT OF THE RATE DETERMINED BY REGISTERED VALUER. THE ASSESSING OFFICER WAS OF THE VIEW THAT THIS VALUATION AS HIGHLY EXAGGERATED, AND DEVOID OF ANY BASIS. ON 10 TH DECEMBER, 2010 THE ASSESSING OFFICER WROTE TO THE A SSESSEE POINTING OUT THREE COMPARABLE SALE INSTANCES IN THE LOCALITY WHICH INDICATED THE PRICES BETWEEN RS.5 TO RS.10 PER SQUARE FEET, A S LATE AS IN 1985, AND IN RESPECT OF HOUSE PROPERTY WHICH ANY DAY FETC HES HIGHER PRICE THAN A VACANT FACTORY LAND WOULD FETCH. IT WAS ALSO POINTED OUT THAT THE AREAS IN WHICH THESE SALE INSTANCES HAVE TAKEN PLACE ARE ALSO URBAN AREAS ADJACENT TO THE LAND OF THE ASSESSEE. O N THIS BASIS, RELYING UPON THE CIRCULAR ISSUED BY THE ASST. DIREC TOR, (TOWN PLANNING), THE ASSESSING OFFICER REQUIRED THE ASSES SEE TO SHOW CAUSE AS TO WHY 67% OF THE AVERAGE SALES VALUE OF C OMPARABLE SALE INSTANCES IN 1985 BE NOT ADOPTED AS FAIR MARKET VAL UE AS ON 01.04.1981. THIS SHOW CAUSE NOTICE WAS RESPONDED TO BY THE REGISTERED VALUER, WHO CHALLENGED THE ASSUMPTIONS M ADE BY THE AO. VIDE HIS LETTER DATED 23 RD DECEMBER, 2010, THE REGISTERED VALUER POINTED OUT VARIOUS DISCREPANCIES ;IN THE ASSUMPTIO NS MADE BY THE AO. THE REGISTERED VALUER CONTENDED THAT THE THREE SALES INSTANCES REPORTED BY AIR UNIT ARE NOT OF BUILDABLE PLOT OR O F AUTHORIZED STRUCTURES ALONG WITH LAND, HAVING PROPER ACCESSES AND OTHER SERVICES SUCH AS ELECTRICITY, WATER SUPPLY, DRAINAG E ETC. AND THAT THESE HOUSE ARE NOT SITUATED IN THE VICINITY OR ON THE ROAD ON WHICH THE LAND UNDER VALUATION FRONTS. THE ASSESSING OFF ICER WAS CLEARLY ITA NOS 517 & 338(ASR)2011 & 2014 9 NOT IMPRESSED WITH THESE ARGUMENTS, AND HE REJECTED THE VALUATION REPORT. HE MADE A REFERENCE TO THE DVO FOR VALUATIO N OF THE LAND AS ON 01.04.1981, BUT AS THE DVOS REPORT WAS NOT RECE IVED BY HIM, HE PROCEEDED TO ADOPT THE CIRCLE RATES AS ON 01.04.198 9 WHICH WAS RS.4.5 LAKHS PER HECTARE FOR PLOTS, EXCEEDING AREA OF 20 ACRE. THIS VALUE THUS CAME TO RS.4.18 PER SQUARE FEET. THE ASS ESSING OFFICER MADE A FURTHER ADJUSTMENT OF 40% OF VALUE, AS THE V ALUATION WAS TO BE ADOPTED AS ON 01.04.1981. THE VALUE SO ARRIVED A T RS.1.67 PER SQUARE FEET WAS THEN ENHANCED BY 50% ON ACCOUNT OF THE FACT THAT THE LAND WAS FOR USE AS A NON-AGRICULTURAL LAND. TH E VALUE AS ON 01.04.1981 WAS THUS ARRIVED AT RS. 2.51 PER SQUARE FEET. ACCORDINGLY, COST OF ACQUISITIONS OF LAND WAS TAKEN AT BY ADOPTING THE VALUE AT RS.2.51 AS ON 01.04.1981 AND THEN APPL YING THE INDEXATION. IT WAS IN THIS BACKGROUND THAT THE ADDI TIONS WERE MADE TO THE CAPITAL GAINS DISCLOSED BY THE ASSESSEE. THE LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER IN PR INCIPLE, BUT RESTRICTED THE VALUATION TO THE HIGHEST RATE WHICH COMPARABLE SALE INSTANCES TOOK PLACE RATHER THAN TAKING AVERAGE OF THE SAME. THE TRIBUNAL SUSTAINED THE ORDER OF LD. CIT(A). 5.6. IN THE AFORESAID FACTS AND CIRCUMSTANCES OF TH E, AND KEEPING IN VIEW THE NATURE OF ADDITION MADE BY THE AO, QUAN TUM OF WHICH WAS MODIFIED BY THE LD CIT(A), AND IN VIEW OF THE E XPLANATIONS GIVEN BY THE ASSESSEE AND THE PENALTY ORDER PASSED BY THE AO, IT IS SEEN THAT THE NECESSARY CONDITIONS FOR INVOKING EXPLANAT ION 1 OF SECTION 271(1)(C) ARE MISSING. BOTH OF THE LOWER AUTHORITIE S HAVE DETERMINED THE RATES OF LAND, BY ADOPTING SOME BASIS. THE AO H AD ACCEPTED THE CLAIM OF THE ASSESSEE IN THE ORIGINAL ASSESSMENT OR DER. HE CHANGED HIS STAND IN THE REASSESSMENT ORDER. THUS, THERE AR E THREE DIFFERENT OPINIONS WITH RESPECT TO RATES OF LAND I.E. ONE AS FORMED BY AO IN ORIGINAL ASSESSMENT ORDER, TWO-AS FORMED BY THE AO IN REASSESSMENT ORDEDR AND THREE-AS ADOPTED BY LD CIT( A). THE TRIBUNAL HAS APPROVED THE OPINION OF THE LD CIT(A), WHICH IS AGAIN SUBJECT TO REVIEW BEFORE HONBLE HIGH COURT. IN THE SE CIRCUMSTANCES, THE ELEMENT OF GUESSWORK CANNOT BE RULED OUT, THERE IN. THE QUANTUM OF INCOME DETERMINED IS CERTAINLY NOT BEYOND THE SH ADOW OF DOUBTS. |UNDER THESE CIRCUMSTANCES, WE HAVE STRONG DOUBTS, IF IT CAN BE SAID THAT, WITH CERTAINTY, THAT THERE WAS ANY CONCE ALMENT OF INDCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME O N THE PART OF THE ASSESSEE. UNDER THE INCOME TAX LAW, PARAMETERS FOR DETERMINATION OF TAXABLE INCOME AND LEVY OF PENALTY ARE DIFFERENT FROM EACH OTHER. BOTH SHOULD NOT BE MIXED OR INTERCHANGEDE. THE PENA L PROVISIONS ARE QUASI CRIMINAL IN NATURE, THEREFORE THESE HAVE TO C ONSTRUED AND APPLIED STRICTLY. PENALTY CAN BE LEVIED BY THE AO, ONLY AND ONLY, IF, THE AO IS ABLE TO ESTABLISH THAT CASE OF THE ASSESS EE FALLS WITHIN THE FRAMEWORK OF THE PENAL PROVISIONS, AND AS PER THE G IVEN PARAMETERS;. IF WE EXAMINE THE FACTS OF THIS CASE, WE CAN SAY THAT ITA NOS 517 & 338(ASR)2011 & 2014 10 EVEN IF A DUTY MAY BE ENJOINED ON THE ASSESSEE TO M AKE CORRECT DISCLOSURE OF INCOME, BUT IF SUCH DISCLOSURE IS BAS ED ON THE OPINION OF AN EXSPERT, WHO IS OTHERWISE ALSO A REGISTERED V ALUER, HAVING BEEN APPOINTED IN TERMS OF A STATUTORY SCHEME, THEN ONLY BECAUSE HIS OPINION IS NOT ACCEPTED OR SOME OTHER EXPERT GIVES ANOTHER OPINION, THE SAME BY ITSELF MAY NOT BE SUFFICIENT FOR ARRIVI NG AT A CONCLUSION THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICUL ARS OF INCOME. HENCE, IN OUR CONSIDERED OPINION, PENALTY CANNOT BE LEVIED IN THE FACTS AND CIRCUMSTANCES OF THIS CASE, ESPECIALLY WH EN THE QUANTIFICATION OF THE INCOME ITSELF DOES NOT HAVE S TRONG PILLARS TO STAND. 5.7. LASTLY, THE LD COUNSEL HAS FURTHER CONTENDED T HAT THE ASSESSEES APPEAL BEFORE THE BOMBAY HIGH COURT HAS BEEN ADMITTED ON QUESTION OF LAW AND ALSO ON FACTS. IT IS, THEREF ORE, CLEAR THAT THE ADDITIONS IN RESPECT OF WHICH PENALTY WAS CONFIRMED HAVE BEEN ACCEPTED BY THE JURISDICTIONAL HIGH COURT LEADING T O SUBSTANTIAL QUESTION OF LAW. WHEN THE HIGH COURT ADMITS SUBSTAN TIAL QUESTION OF LAW ON AN ADDITION, IT BECOMES ADMISSION OF SUBSTAN TIAL QUESTION OF LAW BY THE HONBLE HIGH COURT LENDS CREDENCE TO THE BONA FIDES OF THE CLAIM MADE BY THE ASSESSEE. ONCE IF TURNS OUT T HAT THE CLAIM OF THE ASSESSEE COULD HAVE BEEN CONSIDERED AS PER LAW AND IS NOT COMPLETELY DEBARRED AT ALL, THE MERE FACT OF CONFIR MATION OF ADDITION WOULD NOT PER SE LEAD TO THE IMPOSITION OF PENALTY. 5.8 HENCE, IN VIEW OF THE AFORESAID DISCUSSION AND FACTS & CIRCUMSTANCES OF THE CASE AND LEGAL POSITION AS DIS CUSSED ABOVE, IT IS HELD THAT PENALTY HAS BEEN RIGHTLY DELETED BY TH E LD CIT(A), ORDER OF LD CIT(A) IS CONFIRMED, AND GROUND RAISED BY THE REVENUE IS DISMISSED. 15. WE FURTHER FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCS (P) LTD. (SUPRA) HAS HEL D THAT EVERY WRONG CLAIM MADE BY THE ASSESSEE CANNOT ITSELF LEAD TO T HE IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE FIN DINGS OF THE HONBLE SUPREME COURT ARE REPRODUCED AS UNDER: MERELY BECAUSE THE ASSESSEE CLAIMED DEDUCTION OF I NTEREST EXPENDITURE WHICH HAS NOT BEEN ACCEPTED BY THE REVE NUE, PENALTY UNDER SECTION 271(1)(C) IS NOT ATTRACTED; MERE MAKI NG OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NO T AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF THE ASSESSEE. ITA NOS 517 & 338(ASR)2011 & 2014 11 16. IN VIEW OF THE ABOVE JUDICIAL PRECEDENTS, WE DO NOT FIND ANY JUSTIFICATION IN CONFIRMATION OF PENALTY BY THE LD . CIT(A). THEREFORE, WE DELETE THE SAME. THUS, THE APPEAL IN ITA NO.338(AS R)/2014 IS ALLOWED. 17. IN THE RESULT, THE APPEAL IN ITA NO.417(ASR)/2 011 IS PARTLY ALLOWED AND THE APPEAL IN ITA NO.338(ASR)/2014 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03/06/ 2016. SD/- SD/- (A.D. JAIN) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER /SKR/ DATED: 03/06/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. GURVINDER SINGH SARKARIA, GUMTALA, ASR 2. THE ITO WARD 5(2), ASR. 3. THE CIT(A), ASR 4. THE CIT, ASR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.