Smt. Dayawanti Devi, New Delhi V. ACIT, New Delhi

ITA 6769/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98096 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 23-09-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 27-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A .NO.6769/DEL/2013 ASSESSMENT YEAR-2001-02 DAYAWANTI DEVI, THROUGH SMT. SUNITA GUPTA, A-2/14A, MODEL TOWN-I, NEW DELHI. (PAN: AADPD6869P) (APPELLANT) VS ACIT, CENTRAL CIRCLE-15, NEW DELHI. (RESPONDENT) APPELLANT BY SHRI ANIL JAIN, CA RESPONDENT BY SHRI K.K. JAISWAL, SR. DR ORDER PER I.C. SUDHIR, JM THE ASSESSEE HAS QUESTIONED THE VALIDITY OF PENALT Y LEVIED U/S 271(1)(C) OF THE ACT AT RS. 2,50,082 SUSTAINED BY THE LD. CIT(A) . 2. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVAN CED BY THE PARTIES IN VIEW OF THE ORDERS OF THE AUTHORITIES BELOW, MATERI AL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON. DATE OF HEARING 23.09.2015 DATE OF PRONOUNCEMENT 11.12.2015 I.T.A. NO. 6769/DEL/2013 ASSESSMENT YEAR 2001-02 2 3. THE FACTS IN BRIEF ARE THAT THE ASSESSING OFFICE R OBSERVED THAT THE ASSESSEE, ALONG WITH THREE OTHER FAMILY MEMBERS, HA D MADE INVESTMENT OF RS. 15 LAKH AND SHARE OF THE ASSESSEE WAS RS.3,75,000/- IN AGRICULTURE LAND AT NARELA. ON FURTHER INQUIRY, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD ACQUIRED A FARMHOUSE WITH BOUNDARY WALLS. THE ASSE SSING OFFICER CONCLUDED THAT THE COST OF LAND HAS BEEN UNDERVALUED AND HE E STIMATED THE COST AT RS. 91,65,000 AS AGAINST RS.15,00,000/- DISCLOSED BY TH E ASSESSEE. HE ACCORDINGLY MADE ADDITION OF RS.76,65,000 AND 1/4 TH SHARE OF THE ASSESSEE THEREIN RESULTED INTO AN ADDITION OF RS.19,16,250 IN THE HANDS OF TH E ASSESSEE. LD. CIT(A) REDUCED THE ADDITION TO RS.4,66,250. 4. THE ASSESSING OFFICER ALSO MADE ADDITION OF RS. 22,94,326/- BY ADOPTING GP RATE OF 15%. LD. CIT(A) FOUND IT REASONABLE TO APPLY GP RATE AT 12% AND, THUS, ADDITION TO THE EXTENT OF RS.2,69,025/- WAS S USTAINED. WE THUS FIND THAT IN TOTAL, THE ADDITION OF RS. 7,35,275/- WAS SUSTAINED BY THE LD. CIT(A). THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND LEVIED PENALTY OF RS.3,87,123/- @150% OF THE TAX SO UGHT TO BE EVADED. LD. CIT(A) HAS REDUCED THE SAME TO RS.2,58,082 BY APPLY ING THE RATE OF 100% OF THE TAX SOUGHT TO BE EVADED. 5. IN SUPPORT OF THE GROUND, LD. AR SUBMITTED THAT THERE WAS NO CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE P ARTICULARS THEREOF ON THE PART OF ASSESSEE TOWARDS THE ADDITIONS. BOTH THE ADDITI ONS I.E. THE ADDITION ON I.T.A. NO. 6769/DEL/2013 ASSESSMENT YEAR 2001-02 3 ACCOUNT OF TRADING RESULT AND THE ADDITION ON ACCOU NT OF VALUE OF INVESTMENT IN PROPERTY ARE BASED ON ESTIMATION. HE FURTHER SUBMI TTED THAT BOOKS WERE PRODUCED BEFORE THE ASSESSING OFFICER, ONLY BILLS C OULD NOT BE PRODUCED AND, THUS, ADDITION ON ACCOUNT OF TRADING RESULT WAS MAD E ON ESTIMATE BASIS. THE VALUE OF PROPERTY HAS ALSO NOT BEEN ESTIMATED BY AN EXPERT BUT BY ASSESSING OFFICER HIMSELF. HE CONTENDED FURTHER THAT THE PEN ALTY IN QUESTION IS ALSO NOT MAINTAINABLE SINCE THE PROCEEDINGS WERE INITIATED O N THE ALLEGATION OF INACCURATE PARTICULARS FURNISHED BY THE ASSESSEE WHEREAS IT HA S BEEN LEVIED ON THE ALLEGATION OF CONCEALMENT OF PARTICULARS OF INCOME. 6. LD. DR, ON THE OTHER HAND, TRIED TO JUSTIFY THE ORDER OF THE AUTHORITIES BELOW. 7. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND SUBST ANCE IN THE CONTENTION OF THE ASSESSEE THAT BOTH THE ADDITIONS I.E. ADDITI ON MADE ON ACCOUNT OF UNDER VALUATION OF THE PROPERTY WHERE ASSESSEE ALONG WITH OTHER FAMILY MEMBERS HAD MADE INVESTMENT AND THE TRADING ADDITION HAVE BEEN MADE ON ESTIMATION BASIS AND THUS, PENALTY US/. 271(1)(C) OF THE ACT ON SUCH ESTIMATED ADDITIONS CANNOT BE LEVIED. WE HOLD THAT BEING PENAL IN NATURE, THE PR OVISIONS U/S 271(1)(C) CAN BE INVOKED ONLY WHEN IT HAS BEEN ESTABLISHED BEYOND DO UBT THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE TOWARDS THE ADD ITION ON WHICH PENALTY IS PROPOSED TO BE LEVIED. UNFORTUNATELY, SUCH IS NOT THE CASE BEFORE US AS I.T.A. NO. 6769/DEL/2013 ASSESSMENT YEAR 2001-02 4 ADMITTEDLY BOTH THE ADDITIONS HAVE BEEN MADE ON EST IMATION BASIS AND THE ASSESSING OFFICER HIMSELF IS NOT SURE AS TO WHETHER IT IS A CASE OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS THEREOF ON THE PART OF THE ASSESSEE AS HE HAD INITIATED THE PENALTY PROCEE DINGS WITH THE ALLEGATION THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS O F INCOME BUT HE HAS LEVIED PENALTY ON THE BASIS OF CONCEALMENT OF PARTICULARS OF INCOME ON THE PART OF THE ASSESSEE TOWARDS THE ADDITIONS. WE, THUS, WHILE S ETTING ASIDE THE ORDERS OF THE AUTHORITIES BELOW, DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT AT RS.2,58,082/-. THE GROUNDS INVOLVING THE ISSUE ARE THUS ALLOWED. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.12.2015. SD/- SD/- (L.P. SAHU) (I.C. SUDHIR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11TH DECEMBER, 2015 GS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR