Ghanshyambhai Kanubhai Desai, Ahmedabad V. ITO, Ward-6(1)(4), Ahmedabad

ITA 645/AHD/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5531 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 14-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R R MAKWANA
• Assessee Lawyers: S N DIVATIA
• Keywords: Rule of consistency; Deemed to accrue or arise in india; Set aside
• Section: 271(1)(c); 69C; 143(3); 142(1); 69B; 201; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH (CONDUCTED THROUGH VIRTUAL COURT) BEFORE: SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEM BER GHANSHYAMBHAI KANUBHAI DESAI 64, PRERNAPARK SOCIETY, NR. GOR NA KUVA, MANINAGAR, AHMDEDABAD-380008 PAN: AFFPD7958C (APPELLANT) VS THE ITO, WARD-6(1)(4), AHMEDABAD (RESPONDENT) REVENUE BY: SHRI R.R. MAKWANA, SR. D.R. ASSESSEE BY: SHRI S.N. DIVATIA, A.R . DATE OF HEARING : 06-09-2021 DATE OF PRONOUNCEMENT : 21-09-202 1 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS ASSESSEES APPEAL FOR A.Y. 2014-15, ARISES FRO M ORDER OF THE CIT(A)-6, AHMEDABAD DATED 12-02-2018, IN PROCEEDIN GS UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961; IN SHORT TH E ACT. 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE DECISION OF LD. CIT(A) IN SUSTAINING THE PENALTY LE VIED U/S. 271(1)(C) OF THE ACT OF RS. 5,45,725/- ITA NO. 645/AHD/2018 ASSESSMENT YEAR 2014-15 I.T.A NO. 645/AHD/2018 A.Y. 2014-15 PAGE NO GHANSHYAMBHAI KANUBHAI DESAI VS. ITO 2 3. IN THE CASE OF THE ASSESSEE, ASSESSMENT U/S . 143(3) OF THE ACT FOR THE YEAR UNDER CONSIDERATION WAS FINALIZED ON 24-11-201 6. AT THE TIME OF ASSESSMENT, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS INTRODUCED CAPITAL AS A IMMOVEABLE PROPERTY OF RS. 1,14,72,000 /- IN THE PARTNERSHIP FIRM NAMELY JAI CORPORATION . THE SAID PROPERTY W AS PURCHASED JOINTLY WITH FOUR OTHER CO-OWNERS AT RS. 4,14,35,000/- IN F.Y. 2 012-13 WHEREIN ASSESSEES SHARE WAS OF 25%. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS NOT SHO WN THE AFORESAID INVESTMENT IN THE LAND IN HIS RETURN OF INCOME. TH EREFORE, SHARE OF THE ASSESSEE IN THE LAND @ 25% WAS DETERMINED AT RS. 1, 04,75,147/- ON WHICH SHORT TERM CAPITAL GAIN OF RS. 9,96,853/- WAS COMPU TED. BECAUSE OF NOT FURNISHING ANY EXPLANATION, THE SAME WAS ADDED TO T HE TOTAL INCOME OF THE ASSESSEE. THE ASSESSING OFFICER HAS ALSO LEVIED PE NALTY U/S. 271(1)(C) OF RS. 3,40,851/- FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 4. DURING THE COURSE OF APPELLATE PROCEEDINGS BE FORE US AT THE OUTSET, THE LD. COUNSEL CONTENDED THAT ON IDENTICAL FACTS AND S IMILAR ISSUE PENALTY LEVIED IN THE CASE OF CO-OWNER WAS DELETED BY THE DECISION OF CO-ORDINATE BENCH OF THE ITAT IN THE CASE OF PRAVINBHAI KANUBHAI DESAI V S. ACIT VIDE ITA NO. 646/AHD/2018 DATED 01-06-2020. THE LD. DEPARTMENTA L REPRESENTATIVE HAS NOT DISPUTED THE FACT THAT ON SIMILAR ISSUE AND FAC TS THE ITAT VIDE ABOVE CITED ORDER HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT PART OF THE DECISION OF THE CO-ORDINATE BENCH OF THE ITA T IS REPRODUCED AS UNDER:- 16. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ADMITTEDLY THE NOTICE UNDER SECTION 143( 2) WAS ISSUED DATED 20 SEPTEMBER 2015 AND NOTICE UNDER SECTION 142(1) WAS ISSUED UPON THE ASSESSEE DATED 27TH OF MAY 201 6. HOWEVER THE I.T.A NO. 645/AHD/2018 A.Y. 2014-15 PAGE NO GHANSHYAMBHAI KANUBHAI DESAI VS. ITO 3 ASSESSEE HAS FILED THE REVISED COMPUTATION OF INCOM E AND PAID THE TAXES OF RS. 2,69,732/- VIDE . A.Y. 2014-15 CHALLAN DATED 31ST DECEMBER 2015. THUS WHAT IS TRANSPIRED IS THIS THAT THE ASSESSEE HAS DISCLOSED THE INCOME BEFORE THE DETECTION OF TH E SAME BY THE AO IN THE ASSESSMENT PROCEEDINGS. 17. NOW THE FIRST CONTROVERSY BEFORE US ARISES SO A S TO ADJUDICATE WHETHER THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME BY NOT D ISCLOSING THE INCOME UNDER THE HEAD CAPITAL GAIN AND BY CLAIMING THE EXCESS INTEREST EXPENSES. THE TERM INACCURATE PARTICULAR OF INCOME HAS NOT BEEN DEFINED UNDER THE PROVISIONS OF SECTION 27 1(1)(C) OR ELSEWHERE IN THE ACT THE ACT. HOWEVER, THE MEANING OF THE TERM INACCURATE HAS BEE N DISCUSSED BY THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P) LTD REPORTED IN 189 TAXMAN 322 WHEREIN IT WAS HELD THAT THE TERM 'INACCURATE' SIGNIFIES DELIBERATE ACT OR O MISSION ON THE PART OF THE ASSESSEE. AS SUCH, THE DETAILS/INFORMATION CONTAINED IN THE RETURN OF INCO ME /FINANCIAL STATEMENTS /AUDIT REPORT WHICH ARE NOT CORRECT ACCORDING TO TRUTH, AND WERE FURNISHED BY THE ASSESSEE WITH THE DISHONEST INTENT SHALL BE TREATED AS INACCURATE PARTICULARS. IN HOLDING SO , WE FIND SUPPORT AND GUIDANCE FROM THE JUDGEMENT OF HON'BLE SUPREME COURT IN THE CASE OF R ELIANCE PETROPRODUCTS (P) LTD (SUPRA). WE ARE NOT CONCERNED IN THE PRESENT CASE WITH THE M ENSREA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A MATTER OF FACT, THE ASSE SSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTER'S DICTIONARY, THE WORD 'INACCURATE' HAS BEE N DEFINED AS :-- 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT.' WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTI CULARS' IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, THEY MUST MEAN TH E DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING T O TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT AN Y DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. 18. NOW, IF WE ANALYSES THE FACTS OF THE PRESENT CA SE IN THE LIGHT OF THE ABOVE STATED DISCUSSION, WE FIND THAT THE ASSESSEE HAS OFFERED INCOME BY FILING THE REVISED COMPUTATION OF INCOME WHICH WAS ACCEPTED BY THE REVENUE. THE ASSESSEE HAS FILED SUC H REVISED COMPUTATION OF INCOME BEFORE THE DETECTION BY THE REVENUE ABOUT SUCH ADDITIONS MADE DURING THE ASSESSMENT PROCEEDINGS. THUS IT CAN BE INFERRED THAT THE ASSESSEE HAS NOT DISCLOSE THE INCOME WITH ANY DISHONEST INTENT. ACCORDINGLY, IN OUR CONSIDERED VIEW THE ASSESSEE CA NNOT BE VISITED WITH THE PENALTY UNDER SECTION 271 (1)(C) OF THE ACT. 19. WE ARE ALSO CONSCIOUS TO THE FACT THAT THE ADDI TION IN THE PRESENT CASE UNDER THE HEAD CAPITAL GAIN HAS BEEN MADE UNDER THE PROVISIONS OF SECTION 45(3) OF THE ACT, REPRESENTING THE SUCH ADDITION DURING THE ASSESSMENT PROCEEDINGS BEING DE EMED INCOME DOES NOT AUTOMATICALLY ATTRACT THE PENALTY PROVISIONS AS ENVISAGED UNDER THE PROVI SIONS OF SECTION 271(1)(C) OF THE ACT. AS SUCH, THE ONUS, IN THE CASE OF DEEMED INCOME AS SPECIFIED UNDER SECTION 45(3) OF THE ACT, LIES ON THE REVENUE TO PROVE THAT SUCH DEEMED INCOME IS THE REA L INCOME OF THE ASSESSEE IN ORDER TO ATTRACT THE PENALTY PROVISIONS SPECIFIED UNDER SECTION 271( 1)(C) OF THE ACT. IN HOLDING SO WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HON'BLE GUJARAT H IGH COURT IN THE CASE OF CIT VS. BARODA TIN WORKS BOX REPORTED IN 221 ITR 661 WHEREIN IT WAS HE LD AS UNDER: SECTIONS 68, 69, 69A, 69B AND 69C ARE ALL PART OF T HE SAME SCHEME WHERE CERTAIN AMOUNTS THOUGH NOT PROVED TO BE THE INCOME OF THE ASSESSEE OF THE PREVIOUS YEAR CONCERNED ARE FOR THE PURPOSE OF CHARGING TO TAX ARE DEEMED TO BE SO BY CREATING LEG AL FICTION ABSOLVING THE DEPARTMENT FROM ITS INITIAL DUTY TO PROVE THAT ANY SUCH IS THE INCOME O F THE ASSESSEE. BUT FOR THESE PROVISIONS, IT WAS FO R THE REVENUE TO PROVE THAT ANY SUM, NOT DISCLOSED BY THE ASSESSEE BUT WHICH IS SOUGHT TO BE TAXED AS I.T.A NO. 645/AHD/2018 A.Y. 2014-15 PAGE NO GHANSHYAMBHAI KANUBHAI DESAI VS. ITO 4 INCOME OF THE ASSESSEE, IS THE INCOME OF THE ASSESS EE FOR THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR. 20. IN VIEW OF THE ABOVE, WE HOLD THAT THE ASSESSEE HAS NOT DELIBERATELY UNDISCLOSED THE INCOME UNDER THE HEAD CAPITAL GAIN AND CLAIMED EXCESSIVE I NTEREST EXPENSES. AS SUCH THE ASSESSEE HIMSELF SUO-MOTO REVISED THE COMPUTATION AND PAID THE TAXES BEFORE ANY FINDING FROM THE AO. ACCORDINGLY, IN SUCH A SITUATION THE PENALTY PROVISIONS CANNOT B E ATTRACTED. HENCE, WE SET ASIDE THE FINDING OF THE LEARNED CIT (A) AND DIRECT THE AO TO DELETE THE PENALTY IMPOSED BY HIM. THUS THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. SINCE ON IDENTICAL ISSUE AND SIMILAR FACT THE PENAL TY LEVIED U/S. 271(1)(C) AS CITED ABOVE HAS BEEN DELETED BY THE ITAT, AHMEDABAD IN THE CASE OF OTHER CO-OWNER I.E. PRAVINBHAI KANUBHAI VS. ACIT, THEREFO RE, FOLLOWING THE PRINCIPLE OF CONSISTENCY AND FINDING OF THE CO-ORDI NATE BENCH, THE APPEAL OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21-09-2021 SD/- SD/- (MAHAVIR PRASAD) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 21/09/2021 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,