V,H, GUPTA, MUMBAI V. ITO 18(3)(4), MUMBAI

ITA 5950/MUM/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3735 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 25-10-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 09-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P PEERYA
• Assessee Lawyers: ASHOK L SHARMA
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C; 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, F, MUMBAI BEFORE SHRI S V MEHROTRA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 5950/MUM/2009 (ASSESSMENT YEAR 2003-04) SHRI V H GUPTA, SARTHAK VIJAY BLDG 461/462 PITAMBER LANE MAHIM, MUMBAI-400016 PAN: ADVPG5478L . APPELLANT VS INCOME TAX OFFICER WARD 18(3)(4) PIRAMAL CHAMBERS 2 ND FL, PAREL, MUMBAI-400012 ..RESPONDENT APPELLANT BY : SHRI ASHOK L SHARMA RESPONDENT BY : SHRI P PEERYA O R D E R PER VIJAY PAL RAO,JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 31.08.2009 OF THE LEARNED CIT(A)-, ARI SING FROM THE PENALTY ORDER PASSED UNDER SECTION 271(1)( C ) OF THE ACT FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE RAISED VARIOUS GROUNDS IN THIS APPE AL, HOWEVER, THE ONLY ISSUE ARISES FOR OUR CONSIDERATIO N AND ADJUDICATION IS WHETHER IN THE FACTS AND CIRCUMSTAN CES OF THE ITA NO. 5950/MUM/2009 (ASSESSMENT YEAR 2003-04) 2 CASE, THE CIT(A) IS JUSTIFIED IN CONFIRMING THE PEN ALTY OF RS.93,942/- LEVIED U/S 271(1)(C) OF THE ACT. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO REVISED THE LONG TERM CAPITAL GAINS AT RS.4,94,909/ - INSTEAD OF CAPITAL LOSS CLAIMED BY THE ASSESSEE. THE ASSESSEE CLAIMED THE CAPITAL LOSS ON SALE OF PROPERTY OF RS.3,30,99 0/- BY SHOWING THE SALE VALUE OF THE PROPERTY OF RS.26,50, 000/-. THE AO APPLIED THE PROVISIONS OF SECTION 50C AND AS PER THE STAMP VALUING AUTHORITY, THE PROPERTY WAS VALUED AT RS.43 ,48,500/-. THOUGH THE VALUATION OF THE PROPERTY WAS REFERRED T O THE DISTRICT VALUATION OFFICER WHO HAS DETERMINED THE V ALUE OF THE PROPERTY AT RS.45,83,000/- BUT THE AO ADOPTED THE VALUE AS PER THE STAMP VALUATION AUTHORITY AT RS.43,48,500 /- AND ACCORDINGLY WORKED OUT THE CAPITAL GAIN AT RS.13,67 ,010/-. 4. ON APPEAL, THE CIT(A) HAS GIVEN THE RELIEF TO T HE EXTENT OF RS.8,72,101/- BEING THE SHARES OF THE WIFE AND SISTERS OF THE ASSESSEE. ACCORDINGLY, THE CIT(A) CONFIRMED T HE ADDITION TO THE EXTENT OF RS.4,95,200/-. THE AO INITIATED T HE PENALTY PROCEEDINGS U/S 271(1)( C) WITH RESPECT TO THE ADD ITION CONFIRMED BY THE APPELLATE AUTHORITY AND LEVIED THE PENALTY OF RS.93,942/- VIDE ORDER DATED 25.3.2009. ITA NO. 5950/MUM/2009 (ASSESSMENT YEAR 2003-04) 3 5. THE ASSESSEE HAS CHALLENGED THE LEVY OF PENALTY BEFORE THE CIT(A) WHO HAS CONFIRMED THE PENALTY VIDE IMPU GNED ORDER. 6. BEFORE US, THE LEARNED AR OF THE ASSESSEE HAS SU BMITTED THAT THE ADDITION FOR CAPITAL GAIN WAS MADE BY THE AO BY APPLYING THE DEEMING PROVISIONS OF SECTION 50C. THE REFORE, NO PENALTY IS WARRANTED WHERE THE ADDITIONS ARE MADE BY APPLYING THE DEEMING PROVISIONS. HE HAS FURTHER SU BMITTED THAT EVEN OTHERWISE, THE ASSESSEE WAS ENTITLED FOR DEDUCTION U/S 54F IN RESPECT OF THE INVESTMENT OF RS.250000/ - MADE BY THE ASSESSEE IN PURCHASES OF THE NEW FLAT. THOUGH THIS CLAIM WAS NOT MADE BY THE ASSESSEE DURING THE ORIGINAL AS SESSMENT PROCEEDINGS. HOWEVER, WHEN THIS FACT HAS BEEN BROUG HT TO THE NOTICE OF THE AO, THE AO SHOULD HAVE BEEN CONSIDERE D THIS MATTER. 7. THE LD. AR HAS FURTHER CONTENDED THAT THE PROPER TY WAS A OLD CHAWL AND DUE TO VARIOUS REASONS FAIR MARKET V ALUE WAS LESS IN COMPARE TO THE OTHER PROPERTIES. THE ASSE SSEE HAS SHOWN THE SALE VALUE WHICH WAS ACTUALLY RECEIVED BY THE ASSESSEE AND RECORDED IN THE SALE AGREEMENT, THEREF ORE, IT DOES NOT AMOUNT TO FURNISHING OF INACCURATE PARTICU LARS OF INCOME AND CONCEALMENT OF PARTICULARS OF INCOME, EV EN IF THE ITA NO. 5950/MUM/2009 (ASSESSMENT YEAR 2003-04) 4 SALE CONSIDERATION WAS ADOPTED AS PER THE STAMP VA LUATION AUTHORITY. HE HAS RELIED UPON THE DECISION OF THE HON. SUPREME COURT IN THE CASE OF DILIP N. SHROFF 291 I TR 519 (SC) AND THE DECISION OF THE CHENNAI BENCH OF THIS TRIBUNAL IN THE CASE OF ACIT V/S MRS.N MEENAKSHI REPORTED IN 125 TTJ 856 AND THE ORDER OF THE JODHPUR BENCH OF THIS TRI BUNAL IN THE CASE OF PRAKASHCHAND NAHAR V/S ITO REPORTED IN 110 TTJ 886. 8. ON THE OTHER HAND, THE LEARNED DR SUBMITTED THA T THE ASSESSEE WAS AWARE ABOUT THE DEEMING PROVISIONS AND STAMP DUTY VALUATION OF THE PROPERTY. THE ASSESSEE HAS FAILED TO DISCLOSE CORRECT INCOME WHICH IS CHARGEABLE TO TAX BY DEEMING PROVISIONS. THEREFORE, IT WOULD AMOUNT TO CONCEALMENT OF INCOME AND THE PENALTY U/S 271(1)(C ) IS LEVIABLE. HE HAS RELIED UPON THE DECISION OF THE CIT(A). 9. WE HAVE HEARD THE LEARNED AR AS WELL AS THE LEAR NED DR AND CONSIDERED THE RELEVANT RECORD. IT IS NOT THE CASE OF THE AO THAT THE ASSESSEE HAS SUPPRESSED THE SALE CONSID ERATION SHOWN IN THE RETURN OF INCOME. THE ASSESSEE HAS AD MITTED THE SALE CONSIDERATION AS PER THE SALE DOCUMENTS, THE AO HAS APPLIED THE PROVISIONS OF SECTION 50C AND ADOPTED THE FULL VALUE OF CONSIDERATION AS VALUED BY THE STAMP VALU ING ITA NO. 5950/MUM/2009 (ASSESSMENT YEAR 2003-04) 5 AUTHORITY. THUS, IT IS CLEAR THAT. THERE IS NO FI NDING BY THE AO THAT THE SALE CONSIDERATION ADMITTED BY THE ASSE SSEE WAS NOT ACTUAL CONSIDERATION RECEIVED BY THE ASSESSEE. THE ADDITION WAS MADE BY APPLYING THE DEEMING PROVISI ONS OF THE ACT. AT THE OUTSET WE NOTE THAT BY APPLYING DEEM ING PROVISIONS OF SECTION 50C RESULTING THE ADDITION IN THE CAPITAL GAIN DOES NOT AMOUNT TO CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. W HEN THE AO HAS NOT DOUBTED THE SALE CONSIDERATION ACTUALLY REC EIVED BY THE ASSESSEE. EVEN OTHERWISE, THE VALUATION U/S 50 C (1) BEING THE VALUATION FOR THE PURPOSE OF STAMP DUTY IS NOT FINAL AND CONCLUSIVE AND AGAIN SUBJECT TO THE VALUATION BY T HE DVO, AS PER THE SUB-SECTION (2) OF THE SECTION 50C. THUS, THE VALUATION OF THE PROPERTY FOR THE PURPOSE OF CAPITAL GAIN IS HIGHLY SUBJECTIVE IN NATURE AND VARIES FROM PERSON TO PE RSON. IN THE ABSENCE OF ANY FINDING THAT THE ASSESSEE RECEIVED T HE SALE CONSIDERATION MORE THAN WHAT WAS ADMITTED IN THE RE TURN OF INCOME AS WELL AS IN THE SALE DOCUMENT, MERE ADDITI ON BY APPLYING THE DEEMING PROVISIONS DOES NOT AMOUNT TO CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. ACCORDINGLY, IN THE FACTS AN D CIRCUMSTANCES OF THE CASE, THE PENALTY IS NOT WAR RANTED AND THE SAME IS DELETED. ITA NO. 5950/MUM/2009 (ASSESSMENT YEAR 2003-04) 6 10. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.11.2010 SD S D (S V MEHROTRA ) (VIJAY PAL R AO) ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI, DATED 10 TH NOV 2010 SRL:81110 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI