ACIT, CHENNAI V. P.Arun Kumar, CHENNAI

ITA 542/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77355 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2014
• Appeal Filed By: Department
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 07-03-2014
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 50C; 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHE NNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER . / I.T.A. NO. 542/MDS/2014 / ASSESSMENT YEAR : 2008-09 ASSISTANT COMMISSIONER OF INCOME TAX , BUSINESS CIRCLE-III, CHENNAI ( !% /APPELLANT) VS SHRI P.ARUN KUMAR, 5/F1, FIRST FLOOR, 1 ST STREET, GOPALAPURAM, CHENNAI-600 086 [PAN: AAIPA 2055 K] ( &'!% /RESPONDENT) REVENUE BY : SHRI S. DAS GUPTA, JCIT ASSESSEE BY : NONE / DATE OF HEARING : 26-05-2014 / DATE OF PRONOUNCEMENT : 16-06-2014 #( / O R D E R PER VIKAS AWASTHY, J.M: THE APPEAL HAS BEEN FILED BY THE REVENUE ASSAILING THE ORDER OF COMMISSIONER OF INCOME TAX(APPEALS)-V, CHE NNAI, DATED 01-11-2013 FOR THE ASSESSMENT YEAR (AY) 2008-09, DE LETING I.T.A. NO. 542/MDS/2014 2 PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 ( HEREIN AFTER REFERRED TO AS THE ACT). 2. THE ASSESSEE HAD FILED HIS RETURN OF INCOME FOR THE AY.2008- 09 DECLARING HIS TOTAL INCOME AS ` 97,26,938/-. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING O FFICER OBSERVED THAT THERE IS A DIFFERENCE BETWEEN THE BAL ANCE SHEET AND THE SALE DEED IN RESPECT OF INVESTMENT MADE IN THE HOUSE PROPERTY. AS PER THE SALE DEED DT.05-03-2008, THE MARKET VALU E FOR THE PURPOSE OF STAMP DUTY WAS DETERMINED AT ` 1,10,00,000/-, WHEREAS, IN THE BALANCE SHEET THE VALUE OF PROPERTY WAS SHOW N AT ` 96.00 LAKHS. HENCE, THERE WAS A DIFFERENCE OF ` 14.00 LAKHS. THE ASSESSING OFFICER ADDED BACK THE DIFFERENCE IN THE INCOME RETURNED BY THE ASSESSEE AND INITIATED PENALTY PROC EEDINGS U/S.271(1)(C) OF THE ACT. THE ACIT, BUSINESS CIRCL E-III, CHENNAI VIDE ORDER DT.07-06-2011, LEVIED PENALTY OF ` 4,86,058/- ON THE ASSESSEE U/S.271(1)(C). AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE PREFER RED AN APPEAL BEFORE THE CIT(APPEALS). THE CIT(APPEALS) V IDE IMPUGNED ORDER ACCEPTED THE CONTENTIONS OF THE ASSESSEE THAT THE PROVISIONS I.T.A. NO. 542/MDS/2014 3 OF SECTION 50C ARE APPLICABLE ONLY FOR COMPUTATION OF CAPITAL GAINS IN THE HANDS OF THE SELLER. THE VALUE ADOPTED BY T HE STAMP DUTY AUTHORITIES IS A NOTIONAL VALUE AND THUS CANNOT BE ACCOUNTED IN THE BOOKS OF ACCOUNTS. THE ASSESSEE IS A PURCHASER, TH EREFORE, THE VALUE OF PROPERTY DETERMINED U/S.50C CANNOT BE IMPO SED ON THE ASSESSEE FOR LEVY OF PENALTY U/S.271(1)(C). THE RE VENUE HAS COME IN APPEAL BEFORE THE TRIBUNAL ASSAILING THE FI NDINGS OF THE CIT(APPEALS). 3. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. A CLOSE READING OF PROVISIO NS OF SECTION 50C WOULD SHOW THAT THE SAME APPLIES FOR COMPUTATION OF CAPITAL GAINS. THUS, THE PROVISIONS OF THE SECTION ARE APPLICABLE TO THE SELLERS OF CAPITAL ASSET AND NOT ON THE PURCHASERS. 4. THE ASSESSEE IN HIS BOOKS OF ACCOUNTS HAS TAKEN THE ACTUAL AMOUNT PAID BY HIM FOR ACQUIRING THE PROPERTY. THE RE IS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS WARRANTING LEVY OF PENALTY. WE DO NOT FIND ANY MER IT IN THE I.T.A. NO. 542/MDS/2014 4 CONTENTIONS OF THE REVENUE. IN OUR CONSIDERED OPI NION, THERE IS NO ERROR IN THE ORDER OF THE CIT(APPEALS) IN DELETI NG THE PENALTY. THE APPEAL OF THE REVENUE IS DISMISSED BEING DEVOI D OF MERIT. ORDER PRONOUNCED ON MONDAY, THE 16 TH JUNE, 2014 AT CHENNAI. SD/- SD/- ( . . . ) ( ! ) (DR. O.K. NARAYANAN) (VIKAS AWAS THY) / VICE PRESIDENT ! / JUDICIAL MEMBER '# /CHENNAI, $ /DATED: 16 TH JUNE, 2014 TNMM #% & '( )#( /COPY TO: 1. *+ /APPELLANT 2. &,*+ /RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. (01 & 2 /DR 6. 13 4 /GF