ITO 22(2)(4), NAVI MUMBAI V. RATANSHI MULJI PATEL, MUMBAI

ITA 6909/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0753 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2015
• Appeal Filed By: Department
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 28-11-2013
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Assessee Lawyers: S C TIWARI; PRIYANKA J MORE
• Keywords: Bonafide belief; Deemed to accrue or arise in india

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D , BENCH MUMBAI . . , , BEFORE : SHRI R.C.SHARMA, AM & SHRI VIJAY PAL RAO , JM ./ ITA NO. 69 0 9 / MUM/20 1 3 ( / ASSESSMENT YEAR : 20 0 8 - 09 ) ITO 22 ( 2 ) - 4, MUMBAI VS. SHRI RATANSHI MULJI PATEL, 11/3 RD FLOOR, A - WING, GOPAL KRISHNA BHUVAN, SHRIMAD RAJACHANDRA MARG, OFF TILAK ROAD, NEAR LIONS GARDEN, GHATKOPAR (E), MUMBAI - 77 ./ ./ PAN/GIR NO. : A A A PP 5976 E ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI LOVE KUMAR /ASSESSEE BY : SHRI S.C.TIWARI & MS. PRIYANKA J. MORE / DATE OF HEARING : 27 / 0 4 /201 5 / DATE OF PRONOUNCEMENT : 10/07 / 2015 / O R D E R PER R.C.SHARMA ( A .M.) : TH IS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 33, MUMBAI , DATED 3 - 9 - 2013 , FOR THE ASSESSMENT YEAR 20 0 8 - 0 9 , IN THE MATTER OF IMPOSITION OF PENALTY U /S. 271(1)(C) OF THE I.T.ACT . 2. IN THIS APPEAL, THE REVENUE IS AGGRIEVED BY ACTION OF THE CIT(A) FOR DELETING PENALTY OF RS. 19,75,159/ - . 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUS ED. FACTS IN BRIEF ARE THAT ASSESSEE CLAIMED EXEMPT ION IN RESPECT OF SALE PROCEED OF AGRICULTURAL LAND ON THE PLEA THAT LAND WAS COVERED U/S . 2(14)(III) OF THE ACT. THE AO DID NOT ACCEPT ASSESSEES CONTENTION AND OBSERVED THAT THE ASSESSEE HAS FAILED TO FUR NISH ANY DOCUMENTARY EVIDENCE IN SUPPORT OF IT A NO. 6909 /20 1 3 2 AGRICULTURAL INCOME EARNED BY HIM. NO DETAILS OF AGRICULTURAL PRODUCTS, PRODUCE AND RAW - MATERIAL USED WERE FURNISHED. FURTHER, THE DETAILS OF CAPITAL ACCOUNTS FURNISHED ALSO REVEALED THAT NO AGRICULTURAL INCOME W AS EARNED BY THE ASSESSEE IN ANY YEAR FROM A. Y .2004 - 05 TO TILL DATE. THIS CLEARLY INDICATES THAT THE ASSESSEES TRANSACTION IS MERE ADVENTURE IN THE NATURE OF TRADE AND THERE IS NO FORCE IN THE ARGUMENT THAT THE LAND IS AN AGRICULTURAL LAND , OR ASSESSEE IS A FARMER. EVEN THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENTS RELATING TO INCOME TAX RETURN, CAPITAL ACCOUNT, BALANCE SHEET OF OTHER CO - OWNER MRS.CHANDRIKA KANTILAL SHAH WHO ALSO HAPPENS TO BE DAUGHTER OF THE ASSESSEE. AFTER TREATING PROFIT ON SALE OF AGRICU LTURAL LAND AS BUSINESS PROFIT, THE AO LEVIED PENALTY U/S.271(1)(C) OF THE ACT AFTER OBSERVING THAT TRIBUNAL HAS UPHELD THE ORDER OF AO. 4. BY THE IMPUGNED ORDER THE CIT(A) DELETED THE PENALTY AFTER OBSERVING AS UNDER : - THE PENALTY U/S. 271(1)(C) IS IMP OSABLE ON TWO COUNTS. FIRST 'CONCEALMENT OF INCOME'. SECOND, SUBMISSION OF 'INACCURATE PARTICULARS OF INCOME'. THE FACTS REMAINS, AS HEREIN - ABOVE DISCUSSED, AT ALL LEVEL OF DIFFERENT PROCEEDINGS, THAT THE CASE OF THE A.O. IS NOT THAT APPELLANT HAS CONCEALE D ANY INCOME. THE INCOME ALLEGED AS TAXABLE IS A GAIN ON SALE TRANSACTION OF AN AGRICULTURAL LAND. IT IS NOT THE MATTER OF DISPUTE. THE DETAILS WERE SUBMITTED IN CONNECTION WITH THE CHARACTERISTIC OF THE LAND, ITS STATUS UNDER REVENUE RECORD AND COMPLIANCE S IN CONNECTION WITH THE CONDITIONS LAID OUT U/S.2(14)(III) OF THE I.T .ACT, 1961 IN THE FORM OF 7X12 EXTRACTS, TAHSILDAR'S CERTIFICATION AND REGISTERED SALE PURCHASE AGREEMENTS. THE GAIN ON SALE AGRICULTURAL LAND IS REFLECTED IN THE RETURN OF INCOME AS IN COME EARNED, OUT OF THE TRANSACTION OF SALE AND PURCHASE OF AGRICULTURAL LAND. THE QUANTUM THEREOF WAS ACCEPTED AT ALL THE STAGES OF THE PROCEEDINGS. ALSO, IT IS NOT THE CASE OF THE A.O. THAT THE APPELLANT HAS CONCEALED THIS INCOME OR PART OF IT. A.O. HAS IMPOSED THE PENALTY ALLEGING THAT 'INACCURATE PARTICULARS OF INCOME' ARE SUBMITTED, ON THE FOOTING THAT THE CLAIM OF THE APPELLANT FOR EXEMPTION OF THE GAIN ON SALE OF AGRICULTURAL LAND IS NOT TENABLE AND THE GAIN IS A DEEMED INCOME. I HAVE ALSO CONSIDERE D THIS CONTENTION OF THE A.O., HOWEVER IT IS DIFFICULT TO AGREE WITH THE NOTION THAT THE INCOME, ALREADY REFLECTED IN THE RETURN OF INCOME AND ALL OTHER RELEVANT DOCUMENTS AS INCOME, IT IS IT A NO. 6909 /20 1 3 3 REQUIRED TO BE TREATED AS DEEMED INCOME AND PARTICULARS THEREOF CAN BE TREATED AS INACCURATE. THE MUTE QUESTION IS WHETHER THE CLAIM OF THE APPELLANT UJS.2(14)(III) OF THE I.T. ACT FOR EXEMPTION OF THE INCOME, IS TENABLE OR NOT. I HAVE ALSO CONSIDERED THE RECENT AMENDMENT IN SECTION 2(14)(III) W.E.F. 01.04.2014 AS ENACTE D BY THE FINANCE ACT, 2013, WHEREIN THE CONDITIONS FOR LAND BEING QUALIFYING TO BE AN AGRICULTURAL LAND IS AMENDED. THE ASSESSEE HAS CLAIMED THE EXEMPTION UNDER THE OLD PROVISION APPLICABLE TO THE RELEVANT PERIOD. I HAVE CONSIDERED SUBMISSIONS AND VARIOU S CASE LAWS RELIED UPON BY THE AR. IT IS PERTINENT TO NOTE T.HAT TIME AND AGAIN IN THESE CASES THE MATTER OF 'INACCURATE PARTICULARS OF INCOME' WERE DISCUSSED AND IT IS OBSERVED THAT SOME SILLY MISTAKE OR ERROR, BONAFIDE CLAIM OF DEDUCTION, CLAIM UNDER PRO FESSIONAL ADVICE ETC. ARE NOT TANTA - RNOUNTING TO SUBMISSION OF INACCURATE PARTICULARS OF INCOME. IT IS A FACT THAT THE APPELLANT HAS SUBMITTED VARIOUS DETAILS IN SUPPORT OF HIS CLAIM AND ACTED BONAFIDE IN THAT RESPECT. THE A.O. FOUND NO MISTAKE IN THOSE SU BMISSIONS EVEN. LOOKING AT THE PROVISION IN THE FORM OF SECTION 2(14)(III), UNDER THE I. T.ACT, 1961, IN FORCE ON THE RELEVANT DATES, IT CANNOT BE SAID THAT THE APPELLANT HAS MADE A WRONGFUL CLAIM TO EVADE TAX. THUS THE MATTER OF ALLOWABILITY OF THE CLAIM OF THE APPELLANT HAS REMAINED DEBATABLE. I HAVE CONSIDERED THE CASE OF YOGESH DESAI (2010) 002 ITR (TRIB) 0267, ITAT MUMBAI 'G' BENCH, CASE OF UNI DESIGN JEWELLERY P. LTD. (2010) 0006 ITR (TRIB) 0010 ITAT MUMBAI 'F' BENCH. IN THESE CASES : IT IS HELD - 'MERELY BECAUSE AN AMOUNT WAS NOT ALLOWED OR TAXED TO INCOME, IT COULD NOT BE SAID THAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OR CONCEALED ANY INCOME CHARGEABLE TO TAX. EVEN IF SOME DEDUCTION OR BENEFIT WAS CLAIMED BY THE ASSESSEE WRONGLY, BUT B ONAFIDE, THE PENALTY COULD NOT BE LEVIED.' 'IT WAS NOT THE CASE OF THE DEPARTMENT THAT THE CLAIM OF THE DEDUCTION MADE BY THE ASSESSEE WAS FOUND TO BE FALSE OR UNTRUE OR THE ASSESSEE WAS NOT ENTITLED TO CLAIM SUCH DEDUCTION. THUS THERE WAS NO CONCEALMENT ON PART OF THE ASSESSEE. THEREFORE, THE PENALTY IMPOSED BY THE A. O. AND THE CIT(A) WAS NOT SUSTAINABLE IN LAW AND WAS TO BE DELETED 13. IN VIEW OF THE MATTER DISCUSSED ABOVE, I HAVE NO HESITATION TO HOLD THAT MAKING A MISTAKE OF INTERPRETATION OF A DE BATABLE ISSUE UNDER A BONAFIDE BELIEF THAT TOO UNDER PROFESSIONAL ADVICE, CANNOT BE AT PAR WITH CONCEALMENT OR GIVING INACCURATE PARTICULARS OF INCOME, WHICH MAY CALL FOR LEVY OF PENALTY U/S.271(1)(C) OF THE I.T. ACT. AS SUCH THE DECISION OF THE ASSESSING OFFICER TO LEVY THE PENALTY CANNOT BE UPHELD. THE PENALTY LEVIED IS HEREBY DIRECTED TO BE DELETED.. 5. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 6 . WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOUND THAT ASSESSEES CLAIM FOR AGRICULTURAL LAND WAS DECLINED BY THE A.O. AND IT A NO. 6909 /20 1 3 4 CONSEQUENTLY ADDITION WAS MADE BY TREATING THE SAME AS INCOME FROM BUSINESS. IN THE QUANTUM ASSESSMENT, ADDITION MADE BY THE A.O. WAS DELETED BY THE LD. CIT(A). HOWEVER, THE TRIBUNAL HAS UPHELD T HE ADDITION. FROM THE RECORD WE FOUND THAT PENALTY LEVIED FOR SUCH ADDITION WAS DELETED BY CIT(A) AFTER OBSERVING THAT THE ASSESSEE HAS SUBMITTED VARIOUS DETAILS IN SUPPORT OF HIS CLAIM OF AGRICULTURAL LAND AND ACTED BONAFIDE AND THE A.O. FOUND NO MISTAKE IN THOSE DOCUMENTS . IT IS NOT THE CASE OF THE DEPARTMENT THAT THE SAID LAND IS NOT AGRICULTURAL LAND NOR IT IS THE CASE OF THE DEPARTMENT THAT ASSESSEE HAD FILED INACCURATE PARTICULARS WITH REGARD TO LAND. ONLY BECAUSE ASSESSEES CLAIM WAS DECLINED BY TH E ASSESSING OFFICER, IT COULD NOT BE SAID THAT THE ASSESSEE HAS FILED INACCURATE PARTICULAR OF HIS INCOME OR HAS CONCEALED HIS INCOME. MERELY BECAUSE SOME DEDUCTION CLAIMED BONA - FIDE LY BUT NOT ALLOWED BY THE AO, DOES NOT TANTAMOUNT TO BE A CONCEALMENT OR S UBMISSION OF INACCURATE PARTICULAR OF INCOME. THE FINDING RECORDED BY THE LD. CIT(A) FOR DELETING THE PENALTY IMPOSED U/S.271(1)(C) OF THE ACT HAS NOT BEEN CONTROVERTED BY THE REVENUE AND ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT (A) DELETING THE PENALTY IMPOSED BY THE A.O. U/S 271(1)(C) OF THE ACT. 8 . IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10/07/ 201 5 . SD/ - S D/ - ( ) ( VIJAY PAL RAO ) ( . . ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 10/07/ 201 5 . . /PKM , . / PS IT A NO. 6909 /20 1 3 5 / 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//