RAJESH G. KAPADIA, MUMBAI V. ASST CIT RG 11(3), MUMBAI

ITA 6189/MUM/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9372 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 22-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUM BAI BEFORE S/SHRI B.R.BASKARAN (AM) AND SANJAY GARG, ( JM) . . , , ./I.T.A.NO.6189/MUM/2013 ( / ASSESSMENT YEAR : 2008-09) SHRI RAJESH G KAPADIA, C/O RAJESH G KAPADIA AND ASSOCIATES, 6F, 6 TH FLOOR, COURT CHAMBERS, 35, NEW MARINE LINES, MUMBAI-400020 / VS. ASSTT.COMMISSIONER OF INCOME TAX -11(3), 4 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ( / APPELLANT) .. ( / RESPONDENT) ./ ! ./PAN/GIR NO. :AGKPK1402G ' / APPELLANT BY SHRI JITENDRA SANGHAVI # ' / RESPONDENT BY SHRI LOVE KUMAR $ % # &' / DATE OF HEARING : 10.3.2015 () # &' /DATE OF PRONOUNCEMENT :10.3.2015 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 7.8.2013 PASSED BY LD CIT(A)-20, MUMBAI AND IT RELA TES TO THE ASSESSMENT YEAR 2008-09. ITA. NO.6189MUM/2013 2 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD. CIT(A) IN CONFIRMING THE PENALTY OF RS.1,20,503/- LEVIED BY THE AO UND ER SECTION 271(1)( C ) OF THE INCOME TAX ACT, 1961( THE ACT). 3. THE LD. COUNSEL APPEARING FOR THE ASSESSEE SUBMI TTED THAT THE ASSESSEE HAS SOLD TWO PROPERTIES AND DECLARED CAPIT AL GAINS ARISING THEREON AS HIS INCOME. THE AO NOTICED THAT THE MARKET VALU E ADOPTED BY THE SUB- REGISTRAR FOR STAMP DUTY PURPOSE WAS MORE THAN THE SALE CONSIDERATION SHOWN IN THE CONVEYANCE DEED. ACCORDINGLY, BY INVO KING THE PROVISIONS OF SECTION 50C OF THE ACT, THE AO ADOPTED THE VALUE, A S DETERMINED BY THE SUB-REGISTRAR FOR STAMP DUTY PURPOSES, AS THE SALE CONSIDERATION AND ACCORDINGLY COMPUTED THE LONG TERM CAPITAL GAINS (LTCG). THE SAME HAS RESULTED IN AN ADDITION OF RS.5,46,250/- TO THE TOTAL INCOME, ON WHICH THE AO LEVIED PENALTY U/S 271(1)(C OF THE ACT. 4. THE LD. COUNSEL SUBMITTED THAT THE ADDITION MADE UNDER SECTION 50C OF THE ACT WOULD NOT GIVE RISE TO THE CHARGE OF EIT HER CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME AND HENCE, THE TAX AUTHORITIES ARE NOT JUSTIFIED IN LEV YING THE PENALTY U/S 271(1)(C) OF THE ACT. IN THIS REGARD, THE LD.AR P LACED RELIANCE ON THE FOLLOWING CASE LAWS: A) CIT V/S MADAN THEATRES LTD -44 TAXMANN.COM 382 ( CAL. HIGH COURT) B) RENU HINGORANI V/S ACIT -ITA NO.2210/MUM/2010 (MUMBAI TRIBUNAL) C) SHRI CHIMANLAL MANILAL PATEL V/S ACIT- ITA NO.50 8/AHD/2010 (AHMD TRIBUNAL) ITA. NO.6189MUM/2013 3 D) ACIT V/S M/S SUNLAND METAL RECYCLING-ITA NO.6454 /MUM/2010 (MUMBAI TRIBUNAL) 5. ON THE CONTRARY, THE LD. DR STRONGLY SUPPORTED T HE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD . WE NOTICE THAT THE CO-ORDINATE BENCH OF THE MUMBAI TRIBUNAL IN TH E CASE OF RENU HINGORANI V/S ACIT IN ITA NO.2210/MUM/2010 AY2006-0 7) DATED 22.12.2010 HAS CONSIDERED AN IDENTICAL ISSUE AND HE LD THAT THE ADDITION MADE BY INVOKING THE PROVISIONS OF SECTION 50C OF T HE ACT WOULD NOT GIVE RISE PENALTY U/S 271(1)(C) OF THE ACT. FOR THE SAK E OF CONVENIENCE, WE EXTRACT BELOW THE OPERATIVE PORTION OF THE ORDER PA SSED BY THE TRIBUNAL IN THE ABOVE SAID CASE: 8. WE HAVE CONSIDERED THE RIVAL CONTENT IONS AND R ELEVANT RECORD. WE FIND THAT THE AO HAD MADE ADDITION OF RS.9,00,82 4/ - BEING DIFFERENCE BETWEEN THE SALE CONSIDERATION AS PER SA LE AGREEMENT AND THE VALUATION MADE BY THE STAMP VALUATION AUTHO RITY. THUS, THE ADDITION HAS BEEN MADE BY THE AO BY APPLYING THE PR OVISIONS OF SECT ION 50C OF THE ACT. IT IS EVIDENT FROM THE ASSESSME NT ORDER THAT THE AO HAS NOT QUESTIONED THE ACTUAL CONSIDERATION RECE IVED BY THE ASSESSEE BUT THE ADDITION IS MADE PURELY ON THE BAS IS OF DEEMING PROVISIONS OF THE INCOME TAX ACT , 1961. THE AO HAS NOT GIVEN ANY FINDING THAT THE ACTUAL SALE CONSIDERATION IS MORE THAN THE SALE CONSIDERATION ADMITTED AND MENTIONED IN THE SALE AG REEMENT . THUS IT DOES NOT AMOUNT TO CONCEALMENT OF INCOME OR FURN ISHING INACCURATE PARTICULARS OF INCOME. IT IS ALSO NOT TH E CASE OF THE REVENUE THAT THE ASSESSEE HAS FAILED TO FURNISH THE RELEVANT RECORD AS CAL LED BY THE AO TO DISCLOSE THE PRIMARY FACTS. THE ASSESSEE HAS FURNISHED ALL THE RELEVANT FACTS, DOCUMENTS/MATERIA L INCLUDING THE SALE AGREEMENT AND THE AO HAS NOT DOUBTED THE GENUI NENESS AND VALIDITY OF THE DOCUMENTS PRODUCED BEFORE HIM AND T HE SALE CONSIDERATION RECEIVED BY THE ASSESSEE. UNDER THESE FACTS AND ITA. NO.6189MUM/2013 4 CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT FURNISHED CORRECT PARTICULARS OF INCOME. MERELY BECAUSE THE A SSESSEE AGREED FOR ADDITION ON THE BASIS OF VALUATION MADE BY THE STAMP VALUATION AUTHORITY WOULD NOT BE A CONCLUSIVE PROOF THAT THE SALE CONSIDERATION AS PER THIS AGREEMENT WAS INCORRECT AND WRONG. ACCO RDINGLY THE ADDITION BECAUSE OF THE DEEMING PROVISIONS DOES NOT IPSO FACTO ATTRACT THE PENALTY U/S 271(1) (C ). HENCE IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V/S RE LIANCE PETROPRODUCTS PVT .LTD (SUPRA), THE PENALTY LEVIED U/S 271(1)( C ) IS NOT SUSTAINABLE. THE SAME IS DELETED. 7. IN THE INSTANT CASE ALSO THE IMPUGNED ADDITION H AS ARISEN ON ACCOUNT OF APPLICATION OF PROVISIONS OF DEEMING SEC TION 50C OF THE ACT. ACCORDINGLY, CONSISTENT WITH THE VIEW TAKEN BY THE CO-ORDINATE BENCH OF THE TRIBUNAL (REFERRED SUPRA), WE HOLD THAT THE PEN ALTY LEVIED U/S 271(1)(C) OF THE ACT IN THE INSTANT CASE IS LIABLE TO BE DELE TED. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD.CIT(A) ON THIS ISSUE AND DIRE CT THE AO TO DELETE THE PENALTY. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED ACCORDINGLY IN THE OPEN COURT ON 10TH M ARCH, 2015 IN THE PRESENCE OF BOTH THE PARTIES. () $ * + ,-10TH MARCH, 2015 ) # % 2 SD SD ( / SANJAY GARG ) ( . . / B.R. BASKARAN) / JUDICIAL MEMBER / ACCOUNTANT MEMBER * $ % MUMBAI:10TH MARCH,2015. . . ./ SRL , SR. PS ITA. NO.6189MUM/2013 5 !'#$% &%'# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. $ 5& ( ) / THE CIT(A)- CONCERNED 4. $ 5& / CIT CONCERNED 5. 67 &8 , ' 8 , * $ % / DR, ITAT, MUMBAI CONCERNED 6. 9% / GUARD FILE. : $ / BY ORDER, TRUE COPY ; (ASSTT. REGISTRAR) ' 8 , * $ % /ITAT, MUMBAI