Jawahar Lal Jairath, New Delhi V. ITO, New Delhi

ITA 6380/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91314 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 15-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 02-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V R SONBHA DRA SENIOR
• Keywords: Wrong claim

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI I.C. SUDHIR AND SHRI INTURI RAMA RAO ITA NO. 6380/DEL/2013 ASSESSMENT YEAR: 2008-09 JAWAHAR LAL JAIRATH, VS. INCOME-TAX OFFICER, B-102, LAJPAT NAGAR-I, WARD 32(3), NEW DELHI. NEW DELHI. (PAN: AAEPJ6579R) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI K.V.S. G UPTA, ADV. RESPONDENT BY: SHRI V.R. SONBHA DRA, SENIOR DR DATE OF HEARING : 15 .07.2015 DATE OF PRONOUNCEMENT: 17:07.2015 ORDER PER I.C. SUDHIR: JUDICIAL MEMBER THE ASSESSEE HAS QUESTIONED UPHOLDING OF PENALTY OF RS.3,91,850 LEVIED UNDER SEC. 271(1)(C) OF THE INCOME-TAX ACT, 1961. 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY T HE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILA BLE ON RECORD AND THE DECISIONS RELIED UPON. 3. THE ASSESSEE HAS PURCHASED A PROPERTY AT NOIDA O N 21.5.2005 AND THE SAME WAS SOLD ON 29.11.2007. THE ASSESSEE CLAIMED T HE BENEFIT OF LONG TERM CAPITAL GAIN AT RS.10,32,157 WHICH WAS DENIED BY TH E ASSESSING OFFICER ON THE BASIS THAT PERIOD OF HOLDING OF THE PROPERTY WA S LESS THAN THREE YEARS. THE ASSESSING OFFICER ACCORDINGLY MADE ADDITION OF RS.1 1,51,510 ON ACCOUNT OF 2 SHORT TERM CAPITAL GAIN. HE INITIATED PENALTY PROCE EDINGS UNDER SEC. 271(1)(C) OF THE ACT AND LEVIED PENALTY AT RS.3,91,850. THE S AME HAS BEEN UPHELD BY THE LEARNED CIT(APPEALS). 4. THE CONTENTION OF THE LEARNED AR REMAINED THAT A SSESSEE WAS UNDER BONA FIDE BELIEF THAT HOLDING PERIOD IS ONE YEAR FO R THE PURPOSE OF LONG TERM CAPITAL GAIN AND ACCORDINGLY HE MADE THE CLAIM. HE SUBMITTED THAT THE ASSESSEE HAD NEITHER FURNISHED ANY INACCURATE PARTI CULARS OF INCOME NOR HAD CONCEALED THE PARTICULARS OF INCOME. IT WAS ONLY ON THE BASIS OF DETAILS OF THE TRANSACTION OF THE PROPERTY, THE ASSESSING OFFICER ARRIVED AT A CONCLUSION THAT A WRONG CLAIM OF LONG TERM CAPITAL GAIN HAS BEEN MA DE. HE PLACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT IN THE CAS E OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 (S.C). 5. THE LEARNED SR. DR ON THE OTHER HAND TRIED TO JU STIFY ORDERS OF THE AUTHORITIES BELOW AND PLACED RELIANCE ON THE DECISI ON OF HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILES PROCESSORS 306 ITR 277 (S.C) HOLDING THAT PENALTY UNDER SEC. 2 71(1)(C) IS A CIVIL LIABILITY AND WILLFUL CONCEALMENT IS NOT AN ESSENTI AL INGREDIENT FOR ATTRACTING THE CIVIL LIABILITY. 6. CONSIDERING THE ABOVE SUBMISSION, WE FIND THAT I T IS AN ADMITTED FACT OF THE PRESENT CASE THAT ONLY ON THE BASIS OF THE D ISCLOSURE MADE BY THE 3 ASSESSEE AND INFORMATION FURNISHED REGARDING THE TR ANSACTION OF PURCHASE AND SALES OF THE PROPERTY AT NOIDA, THE ASSESSING OFFIC ER CAME TO THE CONCLUSION THAT THE CLAIMED LONG TERM CAPITAL GAIN BY THE ASSE SSEE WAS WRONG INSTEAD IT WAS A CASE OF SHORT TERM CAPITAL GAIN. UNDER THESE FACTS, THERE IS NO REASON TO DOUBT THE EXPLANATION OF THE ASSESSEE THAT LONG TER M CAPITAL GAIN ON THE TRANSACTION WAS CLAIMED UNDER THE BONA FIDE BELIEF THAT HOLDING PERIOD IS ONE YEAR FOR THE PURPOSE OF CLAIMING LONG TERM CAPITAL GAIN. SIMILARLY, UNDER THE ABOVE DISCUSSED FACTS OF THE CASE, IT CANNOT BE ARR IVED ON A DEFINITE CONCLUSION BEYOND DOUBT THAT THE ASSESSEE HAD CONCE ALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS THEREOF TO ATTRACT THE PENAL PROVISIONS UNDER SEC. 271(1)(C) OF THE INCOME-TAX A CT, 1961. THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIAN CE PETRO PRODUCTS PVT. LTD. (SUPRA) IS A LATER DECISION THAN THE DECISION IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILES PROCESSOR (SUPRA). THE HON' BLE SUPREME COURT IN ITS LATER DECISION IN THE CASE OF RELIANCE PETRO PR ODUCTS PVT. LTD. AFTER CONSIDERING ITS EARLIER DECISION INCLUDING THE DECI SION IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILES PROCESSOR, HAS BEEN P LEASED TO HOLD THAT WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OF ERRONEOUS OR FA LSE, THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SEC. 271(1)(C) OF THE AC T. THUS, IN A PRESENT CASE, 4 MAKING A MERE CLAIM BY THE ASSESSEE ON THE BASIS OF DISCLOSED FACTS WHICH TURNS OUT AS A WRONG CLAIM IS NOT CONCEALMENT OF PA RTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF TO WARRAN T INVOCATION OF PROVISIONS UNDER SEC. 271(1)(C) OF THE ACT TO LEVY PENALTY ON THE DISALLOWANCE OF THE SAID WRONG CLAIM. WE THUS RESPECTFULLY FOLLOWING T HE RATIOS LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RE LIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) HOLD THAT UNDER THE ABOVE DISCUSS ED FACTS AND CIRCUMSTANCES OF THE PRESENT CASE WHEN THERE IS NO ALLEGATION THA T THE ASSESSEE HAD NOT DISCLOSED ALL THE NECESSARY FACTS RELATING TO THE T RANSACTION ON THE BASIS OF WHICH THE ASSESSING OFFICER HELD THE CLAIM OF THE A SSESSEE AS WRONG, PENALTY UNDER SEC. 271(1)(C) OF THE INCOME-TAX ACT, 1961 IS NOT LEVIABLE. WE THUS WHILE SETTING ASIDE THE ORDERS OF THE AUTHORITIES B ELOW, DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY OF RS. 3,91,850. THE GROUND IS ACCORDINGLY ALLOWED. 7. IN RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON .07.2 015 ( INTURI RAMA RAO ) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: /07/2015 MOHAN LAL 5 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR DATE DRAFT DICTATED ON COMPUTER 16.07.2015 DRAFT PLACED BEFORE AUTHOR 16.07.2015 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 23.07.201 5 KEPT FOR PRONOUNCEMENT ON 17.07.2015 FILE SENT TO THE BENCH CLERK 23.07.2015 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.