DCIT 7(2), MUMBAI V. SUPRESSA GRAPHICS P.LTD, MUMBAI

ITA 6445/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92386 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2015
• Appeal Filed By: Department
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 01-11-2013
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: RA JEEV WAGLAY
• Keywords: Sale consideration of property below Jantri Value; Question of law
• Section: 50C; 115JB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI . . , , BEFORE SHRI R.C.SHARMA , A M & SHRI SANJAY GARG , J M ./ ITA NO . 6445 / MUM/20 1 3 ( / ASSESSMENT YEAR : 200 9 - 10 ) DCIT - 7(2), MUMBAI - 400020 VS. M/S SUPRESSA GRAPHICS PVT. LTD., 259 A TO Z IND USTRIAL ESTATE, GANPATRAO KADAM MARG, LOWER PAREL, MUMBAI - 400013 ./ ./ PAN/GIR NO. : A A A C S 823 7 J ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI NEIL PHILIP /ASSESSEE BY : SHRI RAJEEV WAGLAY / DATE OF HEARING : 24 /03/2015 / DATE OF PRONOUNCEMENT 17/04 /2015 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 26 - 8 - 2013 FOR THE A.Y. 2009 - 2010 IN THE MATTER OF IMPOSITION OF PENALTY U/S.271(1)(C) OF THE I.T.ACT . 2. RIVAL CONTENTIONS HA VE BEEN HEARD AND RECORD PERUSED. IN THIS CASE, THE ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT ON 17.12.201] ON A LOTAL INCOME OF RS.14,40,695/ - AS AGAINST THE RETURNED LOSS OF RS.56,07,247/ - .WHILE COMPLETING THE ASSESSMENT, IT WAS OBSERVED THAT THE A SSESSEE HAD SOLD A RESIDENTIAL FLAT SITUATED AT PLANET GODREJ, BYCULLA, ITA NO. 6445 / 1 3 2 MUMBAI FOR A SALE CONSIDERATION OF RS. 2,65,00,000/ - TO ONE SHRI. ISHWARI PRASAD BAGARIA AND SMT. UMA ISHWARI PRASAD BAGARIA. HOWEVER, ON VERIFICATION OF THE REGISTERED SALE DEED, IT W AS SEEN THAT THE SUB REGISTRAR HAD VALUED THE PROPERTY AT RS. 3,30,69,803/ - FOR CHARGING STAMP DUTY. AS THE VALUE ADOPTED BY THE SUB REGISTRAR WAS MORE THAN THAT DECLARED BY THE ASSESSEE, THE VALUE OF SALE CONSIDERATION AS ADOP TED BY THE SUB REGISTRAR AT R S. 3,30,69,803/ - WAS ADOPTED AS SALE CONSIDERATION IN VIEW OF THE PROVISIONS OF SECTION 50 C OF THE I T ACT AND ACCORDINGLY THE LONG TERM CAPITAL GAINS WAS WORKED OUT. THIS RESULTED IN AN ADDITION OF RS.6 5,69,803/ - IN T HE TOTAL INCOME OF THE ASSESSEE. ON THE ADDITION SO MADE, THE AO ALSO LEVIED PENALTY U/S.271(1)(C). 3. BY THE IMPUGNED ORDER, THE CIT(A) DELETED THE PENALTY AFTER HAVING FOLLOWING OBSERVATION : - I HAVE GONE THROUGH THE FACTS IN THE CASE AND THE PENALTY ORDER PASSED BY AO, AS WELL SUBMISSIONS M ADE BY THE APPELLANT. THE FA.CTS IN THE CASE ARE THAT RETURN OF INCOME WAS FILED WITH LOSS OF RS.56,07,247/ - . HOWEVER, THE APPEL LANT HAS OFFERED THE INCOME FOR TAX AS PER PROVISIONS OF SECTION 115JB OF I.T. ACT AT RS. 2,14,36,940/ - . DURING THE COURSE OF AS SESSMENT PROCEEDINGS, THE AO HAS MADE AN ADDITION UNDER THE HEAD 'LONG TERM CAPITAL GAIN' AS PER PROVISION OF SECTION 50 C OF THE ACT FOR AN AMOUNT OF RS. 65,69,803/ - THOUGH, THE INCOME OF APPELLANT REMAINED UNCHANGED IN VIEW OF SECTION 115JB. SUBSEQUENTLY, A.O. HAS LEVIED PENALTY U/S. 271(1.)(C). A READING OF ASSESSMENT ORDER MAKES IT CLEAR THAT THE A. O . HAS OPINED THAT BY NOT TAKING STAMP DUTY VALUATION TO WORKOUT LONG TERM CAPITAL GAIN, THE ASSESSEE HAS FURNISHED INACCURATE PARTICUL ARS AND CONSEQUENTLY PE NALTY U/ S. 271(1)(C) WAS LEVIED BY THE A.O. 6.1. AFTER GOING THROUGH THE FACTS IN THIS CASE, IT IS CLEAR THAT FIRSTLY INCOME OF THE APPELLANT HAS NOT UNDER GONE ANY CHANGE DUE TO ADDITION MADE AS PER PROVISIONS OF SECTION 50 C. FURTHER, ADDITION MADE U/ S . 50C BEING A TECHNICAL ADDITION DUE TO EXISTING PROVISIONS OF THAT SECTION, I AM OF THE CONSIDERED VIEW THAT PENALTY IN SUCH CASE IS NOT SUSTAINABLE FOR THE REASON THAT APPELLANT HAS NEITHER CONCEALED THE INCOME NOR HAS FILED INACCURATE PARTICULARS. AS TH E SALE VALUE OR THE PROPERTY FOR THE PURPOSE OF SEC. 50 C WAS ALREADY ITA NO. 6445 / 1 3 3 AVAILABLE IN THE AGREEMENT OF SALE OF THE PROPERTY AGAINST THE SALE VALUE TAKEN FOR THE CAPITAL GAIN AS TAKEN AND FILED WITH THE RETURN OF INCOME. I FIND THAT APPELLANT'S CASE IS SQUARELY COVERED IN THEIR FAVOUR BY THESE DECISIONS. ON THE IDENTICAL FACTS RECENTLY IN THE CASE OF MADAN THEATRES LTD. (2013) 88 DTR (CAL) 217 HON'BLE COURT HAS DECIDED AS UNDER: 'PENALTY UNDER S. 271(1 )(C) . CONCEALMENT - COMPUTATION OF CAPITAL GAINS BY INVOKING THE PROVISIONS OF S.50C - ASSESSEE SOLD A PROPERTY FOR RS . 2,51,50,000/- WHICH WAS VALUED AT RS. 5,19,77,000 FOR THE PURPOSE OF STAMP DUTY - ASSESSEE DISCLOSED THE SALE PRICE AT RS. 2,51, 50 , 000/ - FOR COMPUTATION OF CAPITAL GAINS - AO WORKED OUT THE CAPITAL GAIN BY INVOKING THE PROVISIONS OF S.50C(1) - ASSESSEE DID NOT. CONTEST THE SAME UNDER S.50C (2) AS IT WOULD NOT HAVE MADE ANY DIFFERENCE IN THE TAX LIABILITY BECAUSE THE CAPI TAL GAIN STILL REMAINED A LOSS- REVENUE HA S FAILED TO PRODUCE ANY IOTA OF EVIDENCE TO T HE EFFEC T THAT THE ASSESSEE HAS ACTUALLY RECEIVED MORE AMOUNT THAN THAT SHOWN BY IT - PENALTY UNDER S.271 (1)(C) RIGH T LY CANCELLED - NO SUBSTANTIAL QUESTION OF LAW, ARISES FOR CONSIDERATION '. 6.2 RESPECTIVELY FOLLOWING THE ABOVE DECISIONS PENALTY LEVIED M TH IS CASE OF RS. 14,88,700/ - IS DELETED HEREWITH. 4. AGAINST THE ABOVE ORDER OF CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE CONSIDERED RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT PE NALTY WAS LEVIED WITH RESPECT TO ADDITION MADE U/S.50C OF IT ACT. EVEN AFTER MAKING THIS ADDITION, TOTAL INCOME WAS ASSESSED AT RS.14,40,695/ - , HOWEVER, IN VIEW OF THE PROVISIONS OF SECTION 115JB, THE TOTAL INCOME WAS FINALLY ASSESSED AT RS. 2,14,41,079/ - U /S.115JB. JUDICIAL PRONOUNCEMENTS IN THE CASE OF RENU HINGORANI VS. ACIT, DECIDED BY THE ITAT MUMBAI VIDE ORDER DATED 20 - 12 - 2010 IN ITA NO. 2210/MUM/2010 FOR THE ASSESSMENT YEAR 2006 - 07 AS WELL AS THE DECISION OF HONBLE KOLKATA HIGH COURT IN THE CASE OF CI T VS. MADAN THEATERS LTD., 260 CTR 75, SUPPORTS THE FINDING OF CIT(A) TO THE EFFECT THAT NO PENALTY IS IMPOSABLE FOR SUCH ADDITION. ITA NO. 6445 / 1 3 4 ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE PENALTY IMPOSED WITH RESPECT TO ADDITION M ADE U/S.50C OF THE IT ACT. 6 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 17/04 / 201 5 . SD/ - SD/ - ( ) ( SANJAY GARG ) ( . . ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 17/04 /201 5 . . /PKM , . / PS / 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//