MADHU DAULAT LALWANI, MUMBAI V. ITO (IT) WD WD 4(1), MUMBAI

ITA 6329/MUM/2011

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2444 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 28-04-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 14-09-2011
• Court: TRIBUNAL
• Assessee Lawyers: V P KOTHARI
• Keywords: Cost of acquisition

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI BEFORE SHRI R.C.SHARMA , A M & SHRI AMARJIT SINGH , J M ./ ITA NO . 6329 / MUM/20 1 1 ( / ASSESSMENT YEAR : 20 0 1 - 20 02 ) SMT . MADHU DAULAT LALWANI, C/O MEHTA KOTHARI & CO. CHARTERED ACCOUNTANTS A/2, HIRA ANAND, 17, SWASTIK SOCIETY, ROAD NO.2, JVPD SCHEME, VILE PARLE (WEST), MUMBAI - 400056 VS. ITO(IT), WARD - 4(1), MUMBAI ./ ./ PAN/GIR NO. : A CFPL 2469 P ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI V.P.KOTHARI /REVENUE BY : SHRI AIRIJU JAIKARAN / DATE OF HEARING : 0 4 / 11 / 2015 / DATE OF PRONOUNCEMENT 18/11 /2015 / O R D E R PER R.C.SHARMA (A.M) : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), MUMBAI , DATED 10 - 6 - 2011 , FOR THE ASSESSMENT YEAR 200 1 - 02 , IN THE MATTER OF IMPOSITION OF PENALTY U/S.271(1)(C) OF THE I.T.ACT , AMOUN TING TO RS.4,30,000/ - . 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. ACCORDING TO THE FACTS MENTIONED IN THE ASSESSMENT ORDER, THE ASSESSEE BECAME OWNER OF FLAT NO.23 AT VALENCIA, JUHU, MUMBAI FOR RS.45,00,000/ - ON 9 - 6 - 1997. SUBSEQUENTLY, ON 01 - 06 - 2000, THE ASSESSEE SOLD THIS FLAT FOR RS.67,50,000/ - . WHILE ACQUIRING THE FLAT, THE ASSESSEE HAS PAID ITA NO. 6329 /M/1 1 2 RS.1,00,000/ - ON 6 - 5 - 1999 AND THE BALANCE OF RS.44,00,000/ - WAS PAID ON 9 - 6 - 1997. IN THE RETURN OF INCOME FILED, THE ASSESSEE HAS SHOWN CAPITAL GAIN AS UNDER : - CAPITAL GAINS LONG TERM SALE OF FLAT AT JUHU 67,50,000 LESS: INDEXED COST (45,00,000 X 406/(244)(74,87,705) LESS : STAMP DUTY PAID (F.Y.2000 - 01) (2,06,700) (76,94,405) LESS CARRIED FORWARD (9,44,405) HOWEVER, THE AO COMPUTED LONG TER M CAPITAL GAINS AT RS.8,89,564/ - INSTEAD OF LOSS OF RS.9,44,405/ - . AT THE TIME OF ORIGINAL ASSESSMENT, THE ASSESSEE DID NOT FURNISH THE NECESSARY DOCUMENTS IN SUPPORT OF CAPITAL LOSS AS SHOWN. THE AO DISALLOWED THE DEDUCTIONS ON ACCOUNT OF COST OF IMPROVEM ENT. THE ORDER TRAVELLED TO ITAT, WHEREIN THE TRIBUNAL VIDE ORDER DATED 31.32008 RESTORED THE MATTER BACK TO THE FILE OF AO FOR DECIDING AFRESH. THEREAFTER THE AO AGAIN REPEATED THE ADDITION AND ALSO LEVIED PE NALTY U/S.271(1)(C) OF THE ACT ON ACCOUNT OF WR ONG COMPUTATION OF CAPITAL GAINS. 3. LD. AR PLACED ON RECORD ORDER PASSED IN THE CASE OF HUSBAND OF THE ASSESSEE SHRI DAULAT LALWANI, WHEREIN UNDER SIMILAR FACTS MATTER WAS RESTORED BACK TO THE FILE OF AO IN QUANTUM APPEAL, THEREAFTER THE TRIBUNAL VIDE ITS ORDER DATED 5 - 9 - 2012 IN ITA NO.6330/M/2011 DELETED THE PENALTY IMPOSED U/S.271(1)(C) WITH RESPECT TO WRONG COMPUTATION OF CAPITAL GAINS, AFTER HAVING THE FOLLOWING OBSERVATIONS : - 9. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND HAVE PERUSED THE OR DERS OF THE REVENUE AUTHORITIES ON THE IMPUGNED ISSUE. IT IS APPARENT, THAT THERE HAS BEEN A CALCULATION MISTAKE OF THE LTCG / LTCL, BUT THERE HAD NOT BE ANY WILLFUL MISCARRIAGE OF ITA NO. 6329 /M/1 1 3 FACTS, WHICH ARE THE PRIMARY REQUISITE OF THE ELIGIBILITY AND EXIGIBILITY O F A PENAL PROCEEDINGS. IN THE CASE AT HAND, AT NO STAGE, THERE HAD BEEN AN OBJECTION BY ANY REVENUE AUTHORITY THAT ANY PRIMARY FACT HAD BEEN CONCEALED OR WITHHELD. 10. UNDER THESE CIRCUMSTANCES, THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF RELIANC E PETROPRODUCTS PVT. LTD. (SUPRA) COMES TO THE RESCUE OF THE ASSESSEE, WHEREIN THE HON'BLE SUPREME COURT HAS HELD THAT EVEN A WRONGFUL CLAIM OF AN ALLOWANCE SHALL NOT BE GOOD ENOUGH FOR THE LEVY OF PENALTY. 11. RESPECTFULLY FOLLOWING THE DECISION OF THE H ON'BLE SUPREME COURT, WE HOLD THAT THE PENALTY IN SUCH CIRCUMSTANCE, COULD NOT BE LEVIED. 12. IN THESE CIRCUMSTANCE WE SET ASIDE THE ORDER OF THE CIT(A) SUSTAINING THE LEVY OF PENALTY AND CANCEL THE PENALTY LEVIED BY THE AO. 4. AS THE FACTS AND CIRCUMST ANCES IN THE CASE OF THE ASSESSEE, ARE THE SAME TO THE FACTS IN THE CASE OF HER HUSBAND SHRI DAULAT LALAWANI, WHEREIN PENALTY HAS BEEN LEVIED FOR THE VERY SAME GROUND OF WRONG COMPUTATION OF INDEXED COST OF ACQUISITION RESULTING INTO HIGHER CAPITAL GAINS. AFTER HAVING THE OBSERVATION AS INDICATED ABOVE THE TRIBUNAL HAS DELETED THE PENALTY . RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF HUSBAND OF ASSESSEE , HAVING SIMILAR FACTS, WE DELETE THE PENALTY SO IMPOSED BY THE AO. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 18/11 / 201 5 . SD/ - SD/ - ( AMARJIT SINGH ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 18/11 /201 5 . . /PKM , . / PS ITA NO. 6329 /M/1 1 4 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//