Diljit Singh, Mohali V. ITO, Mohali

ITA 578/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5196 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 03-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Keywords: Revised return
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.578/CHD/2017 ASSESSMENT YEAR: 2008-09 DILJIT SINGH VS. THE ITO C/O CAPT. GURDEV SINGH WARD 6(3) H.NO. 2668, PHASE 11 MOHALI MOHALI PAN NO. BNYPS2807M (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. JASPAL SHARMA DEPARTMENT BY : SMT. CHANDRAKANTA DATE OF HEARING : 12/12/2017 DATE OF PRONOUNCEMENT : 08/03/2018 ORDER PER DR. B.R.R. KUMAR, A.M: THE ABOVE APPEALS HAVE BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. CIT(A)-2, CHANDIGARH DT. 02/01/2017. 2. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GRO UNDS OF APPEAL : 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT(A) HAS ERRED IN HAVING HELD THAT THE CAPITAL GAINS EVEN ON THE ACTU AL AMOUNT RECEIVED, HAVE NOT BEEN DISCLOSED IN THE RETURN OF INCOME. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT(A) HAS ERRED IN HAVING HELD THAT THE ASSESSEE IS LIABLE FOR PENALTY UNDER SECTION 271(1)(C) AT 100% ON THE ACTUAL AMOUNT OF CONSIDERATION RECEIVED BY T HE APPELLANT. 3. BRIEF FACTS OF THE CASE ARE THAT A HOUSING SOCIETY, NAMED AS THE DEFENCE SERVICES CO-OPERATIVE HOUSE BUILDING SOCIETY LTD., MOHALI (HEREINAFTER REFERRED TO AS 'SOCIETY') CONSISTING OF 207 MEMBERS WAS FORMED, WHICH WAS THE OWNER OF 27.3 ACRES OF LAND IN VILLAGE KANSAL, DISTRICT MOHALI. T HIS SOCIETY ENTERED INTO A TRIPARTITE DEVELOPMENT AGREEMENT (HEREINAFTER REFER RED TO AS 'AGREEMENT') ON 27.04.2007 WITH LIFE HASH BUILDERS PVT. LTD., CHANDIGARH (HEREINAFT ER REFERRED TO AS 2 'HASH') AND M/S TATA HOUSING DEVELOPMENT COMPANY LTD., MUMBAI (HEREINAFT ER REFERRED TO AS THDC), BY VIRTUE OF WHICH THE SOCIETY WOULD TRANSFER ITS LAND FOR DEVELOPMENT IN LIEU OF MO NE TARY CONSIDERATION AND ALSO CONSIDERATION IN KIND TO THE MEMBERS OF THE SOCIETY. THE ASSESSEE WAS ALSO A MEMBER OF THE SAID SOCIETY OWNING 500 SQ. YARDS PLOT OF LAND. THIS ARRANGEMENT MADE BY WAY OF JOINT DEVELOPMENT AGREEMENT CONSTITUTED TRANSFER OF CAPIT A! ASSET. THE TOTAL CONSIDERATION WAS SETTLED AT RS. 80,00,000/- AS MON ETARY CONSIDERATION AND FURNISHED FLAT OF 2250 SQ. FEET AS CONSIDERATION IN KIND. THE TOTAL COST OF THE FURNISHED FLATS COMES TO APPROXIMATELY RS, 1,01,25, 000/- @ 4500 PER SQ. FEET AND THUS TOTAL CONSIDERATION ACCRUING TO THE ASSESSEE W AS TAKEN BY THE ASSESSING OFFICER AT RS. 1,81,25,000/-. AFTER ALLOWING THE CO ST OF ACQUISITION, THE LONG TERM CAPITAL GAINS WERE COMPUTED AT RS. 1,78,25,000/-. PENALTY OF AN AMOUNT OF RS. 40,39,145/- WAS LEVIED ON THE AMOUNT OF RS. 1,78,25,000/- DEEMED TO HAVE BEEN CONCEALED BY THE ASSESSEE. 4. IN THE QUANTUM PROCEEDINGS THE ADDITION MADE BY THE ASSESSING OFFICER STANDS DELETED, LEAVING THE ISSUE AS TO WHETHER THE LEVY OF CONCEALMENT OF PENALTY ON THE DECLARATION OF LONG TERM CAPITAL GAI N AT RS. 29,76,424/- WHICH WAS CALCULATED ON THE BASIS OF SALE CONSIDERATION A CTUALLY RECEIVED I.E. RS. 32 LACS IS VALID IN LAW OR NOT. 5. BEFORE US THE LD. AR ARGUED THAT ORIGINAL RETURN WAS FILED ON 23/09/2008 AND THE REVISED RETURN WAS FILED ON 13/11/2009. THE TAXES PERTAINING TO THE LONG TERM CAPITAL GAIN WAS PAID ON 11/11/2009. THE NOTIC E UNDER SECTION 148 WAS ISSUED ON 26/10/2009 AND ASSESSMENT WAS COMPLETED O N 09/12/2010. PENALTY NOTICE WAS ISSUED ON 09/12/2010 AND SERVED THROUGH AFFIXTURE. THE LD. AR ARGUED THAT THERE WAS NO INTENTION ON TH E PART OF THE ASSESSEE TO CONCEAL THE PARTICULAR OF INCOME AND THE TAXES HAVE BEEN ALREADY PAID BEFORE THE ISSUE OF THE NOTICE UNDER SECTION 148 RECEIPT O F WHICH WAS DISPUTED BY THE ASSESSEE. 6. WE ALSO FIND THAT THE ASSESSING OFFICER HAS VERI FIED ON 29/11/2010 FROM THE SOCIETY OFFICE AND FOUND THAT THE ASSESSEE WAS RESI DING AT USA. BEFORE THE LD. CIT(A) THE ASSESSEE HAS SHOWN EVIDENCES REGARDING T HE REVISED RETURN FILED BY THE ASSESSEE DECLARING THE CAPITAL GAIN ON THE BASI S OF ACTUAL RECEIPT BY THE ASSESSEE I. E. RS. 32 LACS IN LIEU OF TRANSFER OF C APITAL ASSET IS IN CONSONANCE WITH THE DECISION OF THE JURISDICTIONAL HIGH COURT I.E. HON'BLE PUNJAB & HARYANA HIGH 3 COURT IN THE CASE OF C.S. ATWAL AND OTHERS VS. CIT( 2015)59 TAXMANN.COM 35. IT IS ALSO IN DISPUTE AS TO WHICH YEAR THE CAPITAL GAINS ARISE IN THE HANDS OF THE ASSESSEE. IT IS A FACT ON RECORD THAT THE TRIPARTIT E AGREEMENT HAS FELL THROUGH AND FURTHER ADHERENCE TO THE PROJECT ENVISAGED HAS NOT TAKEN PLACE. THE MATTER TRAVELLED UPTO THE HONBLE SUPREME COURT AS TO HOW TO DETERMINE THE CAPITAL GAIN TAXABLE WHICH GOES TO PROVE THAT A MAJOR QUEST ION OF LAW IS INVOLVED AND THERE ARE TWO OPINIONS ON THE ISSUE. THE PENALTY NO TICE WAS NOT SERVED ON THE ASSESSEE AS THE ASSESSEE IS IN USA AS PER THE OBSER VATION OF THE ASSESSING OFFICER IN HIS ORDER. HENCE KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE IT CANNOT BE SAID THAT ASSESSEE HAS CONCEA LED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULAR OF INCOME INTENTIONALLY. THE EXPLANATION GIVEN BY THE ASSESSEE CAN BE TREATED AS BONAFIDE IN THE PECULIAR FACTS OF THE CASE. HENCE THE PENALTY LEVIED IS HERE BY DIRECTED TO BE DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (DR. B.R.R. KUM AR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 08/03/2018 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR