ITO, New Delhi V. M/s. Jawa Plastics Pvt. Ltd., New Delhi

ITA 6604/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3902 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 26-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANNY JAIN
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: BENCH D NEW DELHI BEFORE SRI G.D.AGRAWAL, HON BLE PRESIDENT AND SMT. BEENA A PILLAI, JM ITA NO. 6604 /DEL/201 6 A.Y. 20 10 - 11 ITO, WARD 13(3) VS. M/S JAWA PLASTICS PVT.LTD. ROOM NO.324 M 158, G.K. II C.R.BLDG. NEW DELHI 110 048 NEW DELHI PAN: AAACJ0203B (APPELLANT) (RESPONDENT) APPELLANT BY: SRI AMIT JAIN, SR.D.R. RESPONDENT BY: SH. SANNY JAIN, CA DATE OF HEARING : 16.01.2018 DATE OF PRONOUNCEMENT : 19.01.2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER T HE PRESENT PENALTY APPEAL HAS BEEN FILED BY REVENUE AGAINST ORD ER DATED 04.10.2 016 PASSED BY LD.CIT(A) - 5, DELHI FOR ASSESSMENT YEAR 2010 - 11 ON THE FOLLOWING GROUNDS OF APPEAL: 1 . LD.CIT(A) HAS ERRED IN LAW IN GRANTING RELIEF TO THE ASSESSEE AND DELETING THE PENALTY OF RS.31,73,363/ - , IMPOSED U/S 271(1)(C) ITA 6604/DEL/2016 ASSESSMENT YEAR: 2010 - 11 ITO VS. JAWA PLASTICS PVT.LTD. 2 OF THE INCOME TAX ACT, ON ACCOUNT OF CONCEALED INCOME/INACCURATE PARTICULARS, ADDED TO THE INCOME OF ASSESSEE, U/S 50C OF THE ACT. 2 . LD.CIT(A) HAS ERRED IN LAW AND FACTS BY DELETING THE PENALTY AMOUNTING TO RS.31,73,363/ - IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT, WHEN THE ADDITION OF THE A.O. IN THIS CASE, FOR SUBJECT A.Y. HAS BEEN CONFIRMED BY LD.CIT(A). 3 . THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 4 . THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DIS POSED OFF. 2. BRIEF FACTS OF THE CASE ARE AS UNDER: A SSESSEE FILED ITS ORIGINAL RETURN ON 01/10/10 DECLARING A TOTAL INCOME OF RS.12,01,826/ - . THE ASSESSMENT PROCEEDINGS WAS COMPLETED VIDE ORDER DATED 11/01/ 20 13 AT A TOTAL INCOME OF RS.1,47,90,830/ - . LD. AO MADE ADDITION UNDER SECTION 50C ON SALE OF LEASEHOLD LAND AND UNDER SECTION 14 A READ WITH R ULE 8D FOR THE YEAR UNDER CONSIDERATION. ACCORDINGLY PENALTY PROCEEDINGS UNDER SECTION 271(1)(C ) OF THE A CT WAS INITIATED. IN THE MEANWHILE ASSESSEE PREFERRED APPEAL BEFORE LD.CIT(A) AGAINST ASSESSMENT ORDER. LD. C IT(A) CONFIRMED ADDITIONS MADE BY LD. AO , A GAINST WHICH ASSESSEE PREFERRED APPEAL BEFORE THIS T RIBUNAL. IT HAS BEEN SUBMITTED THAT THIS T RIBUNAL IN ITA NO. 2590/DEL/2014 FOR THE YEAR UNDER C ONSIDERATION V IDE ORDER DATED 15/02/17 DELETED ADDITION MADE BY LD. AO UNDER SECTION 50 C OF THE A CT, BY OBSERVING AS UNDER: 5. IN SO FAR AS THE FACTS ARE CONCERNED THERE IS NO DISPUTE AND THEY STOOD ADMITTED. THE ENTIRE DISPUTE REVOLVES AROUND THE APPL ICABILITY OF SECTION 50 C OF THE ACT TO THE CAPITAL GAINS DERIVED ON TRANSFER OF ITA 6604/DEL/2016 ASSESSMENT YEAR: 2010 - 11 ITO VS. JAWA PLASTICS PVT.LTD. 3 RIGHTS. IN ATUL G. PURANIK CASE (SUPRA) THE QUESTION FOR CONS IDERATION WAS WHETHER SECTION 50 C OF THE A C T APPLIES TO THE TRANSFER OF LEASEHOLD RIGHTS IN LAND. A COORDINATE BE NCH OF MUMBAI TRIBUNAL HELD THAT SECTION 50 C OF THE ACT APPLIES ONLY TO A CAPITAL ASSET, BEING LAND OR BUILDING NR BOTH AND IT HAS NO APPLICATION TO LE ASE RIGHTS IN A LAND. THIS DECISION IN ATUL G. PURANIK CASE WAS APPROVED AND UPHELD BY T H E HON'BLE MUMB AI HIGH COURT IN THE CASE OF M/ S HEATEX PRODUCTS PRIVATE LIMITED (SUPRA) AND M/S GREENFIELD HOTELS AND ESTATES PRIVATE LIMITED (SUPRA). IN VIEW OF THESE LATEST DECISIONS OF THE HON'BLE MUMBAI HIGH COURT COVERING THE ISSUE INVOLVED IN THIS MATTER, WE FIND IT DIFFICULT TO UPHOLD THE FINDING OF THE L D. CIT(A). WHILE RESPECTFULLY F OLLOWING T HE DECISION OF THE HON'BLE MURNBAI HIGH COURT, WE HOLD T HAT THERE IS NO JUSTIFICATION FOR THE ASSESSING OFFICER IN INVOKING SECTION 50C OF THE ACT IN RESPECT OF THE TRAN SFER OF THE LEASEHOLD RIGHTS AND ALSO FOR THE LD.CIT ( A) TO SUSTAIN THE SAME. WE, THEREFORE, QUASH THE IMPUGNED ORDER AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITIONS MADE ON ACCOUNT OF TRANSFER OF LE ASEHOLD RIGHTS UNDER SECTION 50 C OF THE ACT. 2.1. LD. AR SUBMITTED THAT PENALTY HAS BEEN INITIATED ONLY ON THE ADDITION MADE BY LD.AO UNDER SECTION 50C OF THE A CT. HE SUBMITTED THAT AS QUANTUM HAS BEEN DELETED BY THIS T RIBUNAL, PENALTY APPEAL DESERVES TO BE DISMISSED. 3. WE HAVE PERUSED THE SUBMISSIO NS ADVANCED BY BOTH THE SIDES IN THE LIGHT OF THE RECORDS PLACED BEFORE US AND THE ORDER PASSED BY THIS T RIBUNAL IN ASSESSEE S OWN CASE IN QUANTUM APPEAL FOR THE YEAR UNDER CONSIDERATION. ITA 6604/DEL/2016 ASSESSMENT YEAR: 2010 - 11 ITO VS. JAWA PLASTICS PVT.LTD. 4 3.1. AS THE ADDITION HAS BEEN DELETED BY THIS T RIBUNAL, PENALTY CANN OT BE LEVIED AND ACCORDINGLY THE GROUNDS RAISED BY THE REVENUE STANDS DISMISSED. 4. IN THE RESULT APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 9 T H JANUARY, 2018. S D / - S D / - (G.D.AGRAWAL) (BEENA A PILLAI) PRESIDENT JUDICIAL MEMBER DT. 1 9 T H JANUARY, 2018 *MV COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES ITA 6604/DEL/2016 ASSESSMENT YEAR: 2010 - 11 ITO VS. JAWA PLASTICS PVT.LTD. 5 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON DRAGON 16.01.2018 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 17.01.2018 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 1 9 . 0 1 . 2 0 1 8 SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER