NEETA K, PAREKH, MUMBAI V. ITO 1(1)(3), MUMBAI

ITA 5583/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3719 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-10-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 01-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANUJ KISHADWALA
• Keywords: Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO . 5583/MUM/2011 ASSESSMENT YEAR: 2006-07 MRS. NEETA K. PAREKH A-59, MIDC INDUSTRIAL AREA, MAROL, ANDHERI (E), MUMBAI- 93 PAN: AAZPP 0468 J VS. ITO-1(1)(3) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANUJ KISHADWALA RESPONDENT BY : SHRI MOHIT JAIN DATE OF HEARING : 04.04.2013 DATE OF PRONOUNCEMENT : 08.05.2013 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF THE ORDER OF THE LD.CIT(A) -1, MUMBAI DATED 12.11.2010 CONFIRMING THE PENALTY LEVI ED BY THE AO U/S 271(1) (C) OF THE ACT TO THE TUNE OF RS.1,19,097/- FOR THE A.Y. 2 006-07. 2. BRIEFLY STATED, THE ASSESSEE, AN INDIVIDUAL WAS A DIRECTOR IN THE ENPEE CREDIT AND CAPITAL LTD HAD CLAIMED LONG TERM CAPITAL LOSS ON SALE OF EQUITY SHARES OF M/S. NATIONAL PLASTICS INDUSTRIES LTD., AMOUNTING TO RS. 47,18,943/- AND THE SAME WAS SET- OFF AGAINST THE LONG TERM CAPITAL GAINS ON SALE OF HOUSE PROPERTY AMOUNTING TO RS.46,96,325/- DURING THE UNDER YEAR CONSIDERATION. THE ASSESSEE ACQUIRED THE 452700 EQUITY SHARES ON 2.11.1994 CONSIDERING THE T OTAL COST OF RS.47,27,000/-. OUT OF 4,52,700 EQUITY SHARES, THE ASSESSEE HAS SOLD 4, 50,000 EQUITY SHARES TO KETAN V. PAREKH (HUF) FOR CONSIDERING SALE PRICE OF RS.45,00 ,000/- ON 16.03.2006. WHILE DETERMINE THE INDEXATION COST OF ACQUISITION, THE A SSESSEE HAS TAKEN A COST OF ITA NO . 5583/MUM/2011 MRS. NEETA K. PAREKH A.Y. 2006-07 2 ACQUISITION OF RS.45,26,000/- INSTEAD OF RS.45,00,0 00/- AND CONSIDERED THE COST INFLATION INDEX FOR 244 INSTEAD OF 259. IN THE ASSE SSMENT COMPLETED U/S 143 THE AO HAD WORKED THE ACTUAL INDEXED COST OF ACQUISITION A ND COMPLETED THE ASSESSMENT BY HOLDING THAT THE ASSESSEE HAD CLAIMED LONG TERM CAP ITAL LOSS OF RS.5,83,808/- [(471843-4135135) OR (9218943-8635135)] IN EXCESS A ND THEREBY DISALLOWED THE EXCESS ADDED THE SAME TO THE TOTAL INCOME OF THE AS SESSEE AS UNDER: COST OF ACQUISITION OF 4,50,000 SHARES RS.45 ,00,000/- YEAR OF ACQUISITION F.Y. 1994-95 INDEX FOR THE YEAR 259 INDEXED COST OF ACQUISITION= 4500000X 497 = RS.86,35,135/- 259 HENCE THE LTCG IS= SALE PROCEEDS-INDEXED COST OF AC QUISITION RS.45,00,000-RS.86,35,135= LOSS OF RS.41,35,135/- CONSEQUENT UPON THE ASSESSMENT COMPLETED, IN THE PE NALTY PROCEEDINGS, THE AO IMPOSED A PENALTY OF RS.1,19,097/- AS 100% OF THE T AX TO BE EVADED BY CONCEALING AN INCOME OF RS.5,83,808/-. ON APPEAL, THE LD.CIT(A ) CONFIRMED THE ACTION OF THE AO. AGGRIEVED BY THE IMPUGNED ORDER, THE ASSESSEE I S IN APPEAL BEFORE US. 3. BEFORE US, THE LD. AR HAS STATED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS OBTAINED THE CERTIFIC ATE FROM A PRACTICING COMPANY SECRETARY CERTIFYING THE DATE OF ALLOTMENT OF SHARE S AS 2 ND NOVEMBER, 1994 AND VOLUNTARILY FILED BEFORE THE AO. IT IS ONLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS REALISED HER BONA FID E ERROR OF CONSIDERING THE YEAR OF ALLOTMENT AS 1993-94 AS AGAINST ACTUAL YEAR OF ALLO TMENT OF 1994-95 AND THE COST OF RS.45,00,000/- AS AGAINST RS.45,26,000/- CLAIMED IN THE RETURNS OF INCOME. THE ASSESSEE VIDE HER AUTHORIZED REPRESENTATIVES LETTE R DATED 28 TH NOVEMBER, 2008 VERY CLEARLY HAS BROUGHT OUT THE FACTS AND PLACED ON REC ORD. THE ASSESSEE, VIDE HER AUTHORIZED REPRESENTATIVES LETTER DATED 26 TH DECEMBER, 2008 HAS ALSO FILED THE COPIES OF THE APPLICATION MADE FOR ACQUIRING THE IN VESTMENT AND ALSO SUBMITTED THE DETAILS OF PAYMENTS MADE. THE AO IN THE ASSESSMENT FRAMED U/S 143(3), ASSESSED THE LONG TERM CAPITAL GAIN IN RESPECT OF THE SALE O F 4,50,000 SHARES OF M/S. NATIONAL PLASTIC INDUSTRIES LTD. AT RS.41,35,135/- AS AGAINS T RS.47,18,943/- RETURNED BY THE ITA NO . 5583/MUM/2011 MRS. NEETA K. PAREKH A.Y. 2006-07 3 ASSESSEE. HENCE, THERE IS NO CONCEALMENT ON THE PAR T OF THE ASSESSEE AND THE IMPUGNED PENALTY IS TO BE DELETED. ON THE OTHER HAN D, THE LD. DR HAS RELIED ON THE ORDERS OF THE AO & LD.CIT(A) IN SUPPORT OF THE CASE OF THE REVENUE. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. CONSIDERING THE FACT THAT THE ASSESSEE DUE TO HER B ONA FIDE ERROR OF CONSIDERING THE YEAR OF ALLOTMENT AS 1993-94 AS AGAINST ACTUAL YEAR OF ALLOTMENT OF 1994-95 CLAIMED IN THE RETURN OF INCOME ON THE BASIS OF WHICH ADDIT IONS ARE MADE, THE ASSESSEE LETTER DATED 28 TH NOVEMBER 2008 WHICH ESTABLISHES THE RELEVANT FACTS THEREOF AND ALSO THE LD.ARS HAS FILED THE COPIES OF THE APPLICATION MAD E FOR ACQUIRING THE INVESTMENT VIDE LETTER DATED 26 TH DECEMBER, 2008 BEFORE THE AO SUBMITTING THE DETAIL S OF PAYMENTS MADE, WE ARE OF THE CONSIDERED OPINION THA T THE LOWER AUTHORITIES ARE NOT JUSTIFIED IN THEIR FINDINGS THAT THE ASSESSEE HAS C ONCEALED THE INCOME. IN VIEW OF THAT MATTER WE DELETE THE IMPUGNED PENALTY. ACCORDINGLY, THE GROUND IS ALLOWED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF MAY, 2013. SD/- SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER (DR. S.T.M. PAVALAN) JUDICIAL MEMBER MUMBAI, DATED: 08.05.2013. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH //TRUE COPY// ITA NO . 5583/MUM/2011 MRS. NEETA K. PAREKH A.Y. 2006-07 4 BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.