Sh. Chand Rattan Bagri, New Delhi V. DCIT, New Delhi

ITA 6798/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3777 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 16-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K C JAIN

Judgement Text

ITA NO.6798/DEL/2014 ASSESSMENT YEAR: 2009 - 10 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B BENCH NEW DELHI) BEFORE SHRI P.K. BANSAL , VICE PRESIDENT & SHRI AMIT SHUKLA, JUDICIAL MEMBER IN ITA NO. 67 9 8 /DEL/2014 ASSESSMENT YEARS: 200 9 - 1 0 CHAND RATTAN BAGRI, 4318/3, ANSARI ROAD, DARYA GANJ , NEW DELHI VS. DCIT CIRCLE - 3(1), NEW DELHI (APPLICANT) (RESPONDENT) (PAN: A A GPB1216K ) ASSESSEE BY: SHRI K.C. JAIN, ADVOCATE REVENUE BY: SHRI ANSHU PRAKASH, SR. DR DATE OF HEARING 2 1 /09/2017 DATE OF PRONOUNCEMENT 31 / 10 /2017 ORDER PER AMIT SHUKLA, JUDICIAL MEMBER: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST IMPUGNED ORDER DATED 1 2.11 .2014, PASSED BY THE LD. CIT (APPEALS) - V I , NEW DELHI IN RELATION TO THE PENALTY PROCEEDINGS U/S 271(1)(C) FOR THE A.Y. 20 0 9 - 1 0 . IN THE GROUNDS OF APPEAL , ASSESSEE HAS RAISED FOLLOWING GROUNDS: - 1. THE ORDER PASSED BY THE CIT (APPEALS) IS ILLEGAL, INVALID AND BAD IN LAW, IN AS MUCH AS THE SAME HAS BEEN PASSED IN UTTER DISREGARD TO THE DECIDED CASES BROUGHT TO THE NOTICE OF THE LD. CIT (AP PEALS) AT THE TIME OF HEARING. 2. THE LD. CIT (APPEALS) FAILED TO APPRECIATE THAT ALL THE PROPERTIES WERE DECLARED IN THE BALANCE SHEET FILED WITH THE RETURN AND ALL THE PROPERTIES WERE DECLARED IN THE COMPUTATION OF INCOME SHOWING INCOME. THUS, A FULL AND TRUE DISCLOSURE OF PARTICULARS WA S PAGE 2 OF 6 FURNISHED IN THE RETURN ITSELF AND AS SUCH THE IMPOSITION OF PENALTY WAS ITSELF AND LIABLE TO BE CANCELLED. 3. THE LD. CIT (APPEALS) ERRED IN CONFIRMING THE PENALTY OF RS. 43,000 / - IMPOSED UNDER SECTION 271(L)(C) OF THE ACT ON THE FACTS AND CIRCUMSTANCE S OF THE CASE. 4. THE LD. CIT (APPEALS) FAILED TO APPRECIATE THAT THE ORDER CONFIRMING THE PENALTY UNDER SECTION 271(L)(C) OF THE ACT IS BAD IN LAW, INASMUCH, AS THE APPELLANT HAD NEITHER CONCEALED THE PARTICULARS OF INCOME NOR FURNISHED INACCURATE PARTICU LARS OF INCOME AND AS SUCH THE ORDER CONFIRMING THE PENALTY UNDER SECTION 271(L)(C) LIABLE TO BE CANCELLED. 5. WITHOUT PREJUDICE TO THE AFORESAID GROUNDS OF APPEAL, THE LD. CIT (APPEALS) ERRED IN CONFIRMING THE PENALTY OF RS. 43,000/ - AS AGAINST THE CALCUL ATION OF RS. 26,735/ - AS GIVEN IN THE ORDER AT PAGE 6 PARA 3.11 AND AS SUCH THE PENALTY IF LEVIABLE MAY BE RESTRICTED TO RS. 26,735/ - ONLY. 6. THE LD. CIT (APPEALS) HAS RELIED UPON VARIOUS DECISIONS, AS STATED IN THE ORDER WHICH ARE NOT AT ALL RELEVANT TO THE FACTS OF THE CASE AND HAVE BEEN INCORPORATED IN THE ORDER SIMPLY WITH A VIEW TO CREATE CONFUSION. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY ANY GROUND OF APPEAL ANY TIME BEFOR E THE APPEAL IS HEARD. 2. THE BRIEF FACTS QUA THE ISSUE O F LEVY OF PENALTY U/S 271(1)(C) ARE THAT , THE ASSESSEE IS AN INDIVIDUAL AND DERIVES HIS INCOME MAINLY FROM HOUSE PROPERTY AND INTEREST INCOME. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSEE WAS REQUIRED TO FURNISH THE BASIS OF DEDUCTING ALV O F VARIOUS PROPERTIES. IN RESPONSE TO WHICH THE ASSESSEE HAD GIVEN FOLLOWING COMPUTATION OF ALV OF THE PROPERTIES: - DESCRIPTION OF PROPERTY ALV DECLARED (AY 09 - 10) 1 PROPERTY 4318/3, ANSARI ROAD, NEW DELHI 210000/ - 2 PROPERTY 4282/3, ANSARI ROAD, NEW DELHI 596400/ - 3 PROPERTY AT JAIPUR 18000/ - 4 FLAT AT AHMEDABAD 12000/ - 5 FLAT AT VRINDAVAN 3600/ - 6 PROPERTY E - 80, GK - I, NEW DELHI 120000/ - . 7 PROPERTY B - 132, VIVEK VIHAR, NEW DELHI 52800/ - PAGE 3 OF 6 OUT OF THESE PROPERTIES, IT WAS STATED THAT PROPERTIES MENTIONED AT SR. NO. 3, 4, 5, AND 7 WERE VACANT AND WERE NOT BEING USED FOR THE BUSINESS PURPOSES. THE LD. ASSESSING OFFICER DID NOT AGREE WITH THE ALV DECLARED BY THE ASSESSEE AND MADE AN ESTIMATE OF ALL THE AFORESAID FOUR PROPERTIES, WHICH HAS BEEN REDUCED BY THE LEARNED CIT(APPEALS) IN THE FIRST APPEAL FILED BY THE ASSESSEE IN THE QUANTUM PROCEEDINGS. NOW AS A RESULT OF THE FIRST APPELLATE ORDER , THE ALV SHOWN BY THE ASSESSEE AND AS ESTIMATED BY THE LEARNED CIT (APPEALS) ARE AS UNDER: - S. NO DESCRIPTION OF PROPERTY ALV DECLARED ALV ESTIMATED BY THE AO ALV ESTIMATED BY CIT(A) REMARKS 1. PROPERTY AT B - 132, VIVEK VIHAR, NEW DELHI 52,800 2,25,000 50,000 IN APPEAL 2. PROPERTY AT D - 64, SHYAM NAGAR, JAIPUR 18,000 60,000 60,000 IN APPEAL 3. FLAT N0.3554&3555 MSR 23.4SQ.MTRS. ON 2 ND FLOOR, JAMALPUR, AHMEDABAD 12,000 60,000 60,000 IN APPEAL 4. FLAT NO.2, NANDANVAN, VRINDAVAN 3,600 40,000 40,000 IN APPEAL 5. PROPERTY AT E - 80, GK - 1 1,20,000 - - NOT IN 6. 4318/3, DARYAGANJ, DELHI 2,10,000 - - NOT IN DISPUTE 7. 4282/3, DARYAGANJ, DELHI 5,96,400 - - NOT IN DISPUTE 3. NOW THE PENALTY HAS BEEN LEVIED WITH REGA RD TO SUCH DIFFERENTIAL AMOUNT OF ESTIMATE BETWEEN THE ASSESSEE AS WELL AS LEARNED CIT (APPEALS). IN THE PENALTY ORDER THE ASSESSING OFFICER HAS LEVIED PENALTY AFTER INVOKING E XPLANATION 1 OF SECTION 271(1)(C) AND LEV IED PENALTY OF RS. 43,000/ - WITH REGARD TO THE DIFFERENTIAL ADDITION OF RS. 1,38,898/ - , AFTER DISCUSSING THE ENTIRE LAW RELATING TO LEVY OF PENALTY AND CITING VARIOUS JUDGMENTS WITHOUT CONSIDERING WHETHER THEY ARE RELEVANT OR NOT ON THE FACTS OF THE CASE . THE LEARNED CIT (APPEALS ) TOO HAS AGAIN PAGE 4 OF 6 REITERATED THE SAME JURISPRUDENCE RELYING UPON THE CATENA OF DECISIONS WITHOUT E VEN CONSIDERING THE EXPLANATION AND THE MERITS OF THE ISSUES INVOLVED AND IN A BLANKED MANNER HELD THAT THE ASSESSEE HAS NOT FURNISHED THE CORRECT ALV. 3. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF RELEVANT MATERIAL PLACED BEFORE US, WE FIND THAT T HE ASSESSING OFFICER WHILE ESTIMATING THE ALV HAS NOT BEEN REFERRED TO ANY MATERIAL O R HAS GIVEN ANY BASIS AS TO HOW AND ON WHAT BASIS HE HAS DETERMINED THE ALV OF THE FOUR PROPERTIES SHOWN BY THE ASSESSEE. SO FAR AS THE OTHER 3 PROPERTIES WERE CONCERNED T HE ASSESSING OFFICER HAS ACCEPTED THE ALV AS SHOWN BY THE ASSESSEE . HOWEVER, FOR BALANCE 4, HE HAS NOT EXPLAINED AS TO WHY HE HAS MADE HUGE ESTIMATE S OF ALV. IT IS NOT THE ISSUE HERE THAT THE ASSESSEE HAS NOT DECLARED THE ALV OF THE FOUR PROPERTIES IN HIS RETURNED INCOME OR HAS NOT DISCLOSED THE SAID PROPERTIES, ALBEIT THE CHARGE OF THE DEPARTMENT IS THAT THE ALV SHOWN BY THE ASSESSEE IS NOT CORRECT , BUT WHAT IS THE CORRECT AND APPROPRIATE ALV, THE SAME HAS NOT BEEN GIVEN BY THE ASSESSING OFFICER. WE FIND T HAT THE LEARNED CIT (APPEALS) FOLLOWING THE EARLIER YEARS APPELLATE ORDER FOR THE A.Y. 2001 - 02 HAD FURTHER REDUCE D THE ESTIMATE OF ALV ON THE GROUND THAT THE MUNICIPAL RATABLE VALUE WHICH WAS DETERMINED IN A.Y. 2001 - 02 SHOULD BE TAKEN AS A PARAMETER FOR ESTIMAT ING THE ALV. BASED ON THAT , HE HAS ESTIMATED THE ALV ALL THE 4 PROPERTIES AT RS. 2,10,000/ - , INSTEAD OF 3,75, 000/ - MADE BY THE ASSESSING OFFICER. IN THESE FACTS IT WOULD BE VERY DIFFICULT TO PERCEIVE THAT THE ASSESSEE EITHER FURNISHED INACCURATE PARTICULARS OF INCOME OR ANY MATERIAL HAS BEEN FOUND THAT THE ALV SHOWN BY THE ASSESSEE IS NOT CORRECT. THE AUT HORITIES BELOW HAVE MADE THEIR OWN ESTIMATE WITHOUT FINDING ANY FAULT ON THE ESTIMATE SHOWN BY THE ASSESSEE. IN SUCH A SITUATION, THE PENALTY U/S 271(1)(C) IS NOT TENABLE , BECAUSE , FIRSTLY , THE ASSESSEE HAD FURNISHED ALL THE PARTICULARS OF PAGE 5 OF 6 INCOME BY SHOWING THE AL V OF ALL THE FOUR PROPERTIES ; SECONDLY , THERE IS NO MATERIAL ON RECORD TO SHOW THAT THE A LV SHOWN BY THE ASSESSEE HAS BEEN FOUND TO BE INCORRECT ; AND LASTLY, THERE IS A HUGE VARIATION OF ESTIMATES MADE BY THE ASSESSING OFFICER AS WELL AS THE LEARNED CIT(AP PEALS). THUS, THE PENALTY LEVIED BY THE ASSESSING OFFICER AND SUSTAINED BY THE LEARNED CIT (APPEALS) OF RS. 43,000/ - IS DIRECTED TO BE DELETED. 4 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 1 . 1 0 .2017. S D / - S D / - ( P.K. BANSAL ) (AMIT SHUKLA) VICE PRESIDENT JUDICIAL MEMBER DATED: 3 1 / 1 0 /201 7 NARENDER COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI DATE 1. DRAFT DICTATED ON 25 .9.2017 2. DRAFT PLACED BEFORE AUTHOR 26 .9.2017 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 3 1 . 1 0 . 2 0 1 7 PAGE 6 OF 6 6. KEPT FOR PRONOUNCEMENT ON 7. FILE SENT TO THE BENCH CLERK 1 . 1 1 . 2 0 1 7 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.