DCIT CC 23, MUMBAI V. RUNWAL DEVELOPERS P., LTD, MUMBAI

ITA 5457/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55435 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 02-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SUBRAMANIAN
• Assessee Lawyers: C G K NAIR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI D BENCH BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER & SHRI T.R.SOOD, ACCOUNTANT MEMBER I.T.A.NO.5722/MUM/2010 A.Y 2005-06 M/S. DAYA BUILDERS, 181, 1 ST NEW LANE, MANGALDAS MARKET, PRINCESS STREET, MUMBAI 400 002. PAN: AAAFD 0979 K VS. ASST. COMMISSIONER OF I.T. 14(3), MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M. SUBRAMANIAN. RESPONDENT BY : SHRI C.G.K.NAIR. DATE OF HEARING: 20-09-2011 DATE OF PRONOUNCEMENT: 23/09/2011 O R D E R PER T.R.SOOD, AM: IN THIS APPEAL, VARIOUS GROUNDS HAVE BEEN RAISED B UT THE ONLY DISPUTE IS REGARDING THE CONFIRMATION OF LEVY OF PE NALTY U/S.271(1). 2. AFTER HEARING BOTH THE PARTIES, WE FIND THAT DUR ING THE ASSESSMENT PROCEEDINGS ASSESSEE HAS SHOWN ADVANCES FROM THREE PARTIES WHICH ARE AS UNDER: 1. JAGDESHCHANDRA S. THAKUR. RS. 7,00,000/- 2. PRASHANT GOWDA. RS.10,37,000/- 3. RAJESH BAHL. RS.17,01,000/- ON GOING THROUGH THE REGISTERED SALE AGREEMENT, IT WAS FOUND THAT SALE AGREEMENT HAS BEEN REGISTERED IN F.Y 2004-05 AND, T HEREFORE, THE TRANSFER HAS TAKEN PLACE IN THE RELEVANT ASSESSMENT YEAR I.E. A.Y 2005- 06. THE ASSESSEE HAD SHOWN THIS TRANSFER IN A.Y 200 6-07 ON THE BASIS ITA NO.5722 OF 2010 2 THAT POSSESSION HAD NOT BEEN GIVEN AND FULL CONSIDE RATION HAD NOT BEEN RECEIVED BECAUSE FROM ONE SHRI JAGDISCHANDRA J. THA KUR, AGAINST THE TOTAL CONSIDERATION OF RS.7,17,960/- INCLUDING SHAR E MONEY AND SECURITY DEPOSIT, ASSESSEE HAD RECEIVED ONLY RS.7,00,230/-. SIMILARLY, FROM SHRI RAJESH BAHL AGAINST THE TOTAL CONSIDERATION OF RS .17,70,360/-, HE HAS PAID A SUM OF RS.17,39,130/- AND SHRI PRASHANT GOWD A HAD PAID A SUM OF RS.10,37,000/- AGAINST THE TOTAL AMOUNT OF RS.10 ,81,560/-. HOWEVER, IN VIEW OF THE OBSERVATION OF THE AO ASSES SEE REVISED THE RETURN AND INCLUDED THESE SALES IN THE CURRENT YEAR AND PAID THE TAXES ACCORDINGLY. ON THE BASIS OF THIS ADDITIONS, PENALT Y PROCEEDINGS WERE INITIATED. THE CONTENTION THAT POSSESSION WAS GIVEN IN THE NEXT YEAR WAS NOT ACCEPTED BECAUSE SAME WAS HELD TO BE ONLY A PLOY BY THE ASSESSEE TO DEFER THE PAYMENT OF TAXES. 3. ON APPEAL, THE ACTION OF THE AO WAS CONFIRMED BY THE LD. CIT(A). 4. BEFORE US, SUBMISSIONS MADE BEFORE THE AO AND TH E LD. CIT(A) WERE REITERATED. IT WAS EMPHASISED THAT ASSESSEE HA S ACCEPTED THE OBSERVATION OF THE AO AND INCLUDED THE SALE TRANSAC TION IN THIS YEAR. THE ASSESSEE HAD A BONA FIDE BELIEF THAT SINCE POSS ESSION WAS GIVEN IN THE NEXT YEAR, THEREFORE, SALE WOULD BE COMPLETED O NLY IN THE NEXT YEAR. THE RECEIPTS OF PAYMENTS WERE ALREADY REFLECT ED IN THE ACCOUNT AS ADVANCES AND, THEREFORE, IT CANNOT BE SAID THAT SOMETHING HAS BEEN CONCEALED FROM THE DEPARTMENT AND HENCE THE LEVY OF PENALTY IS UNJUSTIFIED. ITA NO.5722 OF 2010 3 5. ON THE OTHER HAND, LD. DR STRONGLY SUPPORTED THE ORDER OF THE CIT(A) AND POINTED OUT THAT WHEN REGISTRATION OF SA LE AGREEMENT HAS TAKEN PLACE DURING THE YEAR, THEN ASSESSEE HAD NO R EASON FOR NOT OFFERING THE SALE CONSIDERATION AS ITS SALE AND, AC CORDINGLY, LEVY OF PENALTY WAS JUSTIFIED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND THAT ALL THE PARTICULARS OF PAYMENTS HAVE DULY BEEN DISC LOSED AND PAYMENTS HAVE BEEN SHOWN AS ADVANCES, WHICH MEANS ALL THE PA RTICULARS HAVE BEEN DISCLOSED BY THE ASSESSEE. FURTHER, ASSESSEE H AD ALSO DISCLOSED THE SALES IN THE NEXT YEAR BECAUSE POSSESSION WAS G IVEN IN THE NEXT YEAR. THEREFORE, AT BEST IT IS A CASE OF BONA FIDE CLAIM THAT SALES HAVE NOT TAKEN DURING THE YEAR AND, ACCORDINGLY, THIS IS NOT A FIT CASE FOR LEVY OF PENALTY. THEREFORE, WE SET ASIDE THE ORDER OF TH E LD. CIT(A) AND DELETE THE PENALTY. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 23/9/2011. SD/- SD/- (N.V.VASUDEVAN) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 23/9/2011. P/-* ITA NO.5722 OF 2010 4