SHRI RAMESH CHAND MITTAL, Indore V. THE DCIT 1(1), Indore

ITA 577/IND/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5848 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 06-09-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJEEV JAIN
• Assessee Lawyers: C P RAWKA
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 50C; 2; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T.GARASIA, HON'BLE JUDICIAL MEMBER AN D SHRI N.S. SAINI, HONBLE ACCOUNTANT MEMBER ITA NO. 577/IND/2013 (ASST. YEAR : 2008-09) SHRI RAMESH CHAND MITTAL, 1/5, NEW PALASIA, GEET, INDORE VS. DCIT, 1(1), INDORE. PAN NO. ABZPM1785C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C.P.RAWKA, C.A. DEPARTMENT BY : SHRI RAJEEV JAIN, DR DATE OF HEARING : 13/07/2016. DATE OF PRONOUNCEMENT : 13/07/2016. O R D E R PER N.S.SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, INDORE, DA TED 10.07.2013. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT TH E LD. CIT(A) HAS ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271(1)(C ) OF THE INCOME-TAX ACT, 1961, OF RS. 11,42,026/.- 3 . THE BRIEF FACTS OF THE CASE ARE THAT DURING THE Y EAR UNDER CONSIDERATION THE ASSESSEE HAD SOLD IMMOVABLE PROPE RTY FOR RS. 4,50,000/-. THE ASSESSEE AFTER COMPUTING THE INDEX COST U/S 48(2) OF 2 RAMESH CHAND MITTAL V. DCIT,1(1),INDORE THE ACT AT RS. 4,87,316/- RETURNED LONG TERM CAPIT AL LOSS AT RS. 37,316/-. THE AO OBSERVED THAT THE STAMP DUTY AUTHO RITIES DETERMINED THE FAIR MARKET VALUE OF THE IMMOVABLE PROPERTY AT RS. 12,92,000/- AND ,ACCORDINGLY, THE AO AFTER REDUCING THE INDEX COST OF RS. 4,87,316/- OF THE PROPERTY ASSESSED LONG TERM CAPITAL GAIN OF THE ASSESSEE AT RS. 8,04,684/-. 4. THE AO FURTHER NOTED THAT THE ASSESSEE HAD SOLD IMMOVABLE PROPERTY FOR RS. 42,10,000/- AND THE COST OF ACQUIS ITION OF THE SAME AT RS. 42,66,520/-. THE ASSESSEE HAD SHOWN SHORT TERM CAPITAL LOSS OF RS. 56,520/-. THE AO OBSERVED THAT THE STAMP DUTY AUTHO RITY DETERMINED FAIR MARKET VALUE OF THE PROPERTY AT RS. 65,05,000/ - AND, THEREFORE, HE COMPUTED THE SHORT TERM CAPITAL GAIN AT RS. 22,38,4 80/-. 5. FURTHER, THE AO OBSERVED THAT THE ASSESSEE HAS S HOWN CREDIT OF RS. 2,22,893/- IN THE CAPITAL ACCOUNT. THE ASSESSEE EXPLAINED THAT IT WAS OUT OF FUND SHIFTED ON ACCOUNT OF DIFFERENCE IN COMPUTATION OF CAPITAL GAINS. THE AO DID NOT ACCEPT THE EXPLANATIO N OF THE ASSESSEE AND MADE THE ADDITION OF RS. 2,22,893/- U/S 68 OF T HE ACT. THEREAFTER, THE AO LEVIED PENALTY OF RS. 11,42,026/- ON ACCOUNT OF CONCEALMENT OF INCOME BY THE ASSESSEE. 6. ON APPEAL, THE LD. CIT(A) CONFIRMED THE LEVY OF PENALTY. 7. BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CONTENDED THAT FOR COMPUTING CAPITAL GAIN BY APPLYI NG SECTION 50-C, IT DOES NOT AMOUNT TO FURNISHING OF INACCURATE PARTICU LARS OF INCOME OR CONCEALMENT OF INCOME FOR LEVY OF PENALTY U/S 271(1 )(C) OF THE ACT. FOR 3 RAMESH CHAND MITTAL V. DCIT,1(1),INDORE THIS, HE PLACED RELIANCE ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. FORTUNE HOTELS AND ESTATES PRIV ATE LIMITED, (2014) 90 CCH 0126 (MUM.HC). FURTHER, HE RELIED ON THE DEC ISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. MADAN TH EATERS LIMITED, (2013) ITRV H.C. AOL 073. HENCE, HE PRAYED THA T THE PENALTY LEVIED FOR COMPUTING HIGHER LONG TERM CAPITAL GAIN BY APPLYING SECTION 50C OF RS. 8,04,684/- AND RS. 22,38,480/- SHOULD BE DELETED. 8. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHE R HAND, SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE ISSUE IS NO L ONGER RES INTEGRA. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF FORTUNE HO TELS AND ESTATE (SUPRA) HAS HELD THAT NON OFFERING OF STAMP DUTY/DV O VALUE AS CONSIDERATION FOR CAPITAL GAINS, DOES NOT ATTRACT P ENALTY. RESPECTFULLY FOLLOWING THE SAME, WE DELETE THE LEVY OF PENALTY O N ADDITION OF RS. 8,04,684/- AND RS. 22,38,480/- U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. 5. REGARDING THE ADDITION U/S 68 OF THE INCOME-TAX AC T, 1961, FOR RS. 2,22,893/- , THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FAIRLY CONCEDED THAT THE ASSESSEE WAS EXIGIBLE TO PENALTY U/S 271(1)(C) ON THIS AMOUNT. THEREFORE, WE CONFIRM THE LEVY OF PENA LTY OF RS. 2,22,893/- AND DISMISS THE PART OF THE GROUND OF TH E ASSESSEE. 4 RAMESH CHAND MITTAL V. DCIT,1(1),INDORE 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING ON WEDNESDAY, THE 13 TH DAY OF JULY, 2016 AT INDORE. SD/- SD/- (D.T.GARASIA) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 13 TH JULY, 2016. CPU COPY TO: 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R. 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., INDORE