ACIT, New Delhi V. Sh. Jaswant Rai Aroara, Delhi

ITA 697/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6567 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 29-11-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 07-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UMESH CHAND DUBEY
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: D: NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO. 697/DEL/2014 ASSESSMENT YEAR: 2008-09 A.C.I.T., CIRCLE-34(1), ROOM NO. D-9, D-BLOCK, VIKAS BHAWAN, NEW DELHI. VS. JASWANT RAI ARORA, HCMR COMPLEX, VILLAGE- MANDOLI, DELHI- 110093. PAN:- AAEPA 7084 J APPELLANT RESPONDENT DEPARTMENT BY SHRI UMESH CHAND DUBEY, SR. DR ASSESSEE BY SHRI SANJAY ISSAR, CA DATE OF HEARING 01/12/2016 DATE OF PRONOUNCEMENT 01/12/2016 O R D E R PER: LALIET KUMAR, J.M.: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 29/11/2013 PASSED BY THE LD. CIT(A)-XXVII, NEW DELH I FOR THE A.Y. 2008-09, WHEREIN THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 2 ITA NO. 697 /DEL/2014 ACIT VS JASWANT RAI ARORA 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF THE LD. CIT(A) IS BAD IN LAW AND NOT I N CONSONANCE WITH FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAD ERRED IN DELETING PENALTY OF RS.24,60,258/- @ 300% ON AN ADDITION OF RS. 36,19,091/- UNDER DEEMING PROVISIONS OF SECTION 50C OF THE I.T. ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN RESTRICTING PENALTY TO RS. 19,395/-(100% OF THE TAX SOUGHT TO BE EVADED) OUT OF RS. 58,184/- (300% OF THE TAX SOUGHT TO BE EVADED) IMPOSED BY THE AO ON ACCOUNT OF INTEREST PAID ON CAR LOAN UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN CONSIDERING APPELLANT SUBMISSION THAT DUE TO CLERICAL ERROR INTEREST ON CAR LOAN WAS SHOWN UNDER THE HEAD INCOME FROM HOUSE PROPERTY IN PLACE OF INCOME FROM BUSINESS. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN PASSING THE ORDER WITHOUT CONSIDERING THE ORDER PASSED BY THE AO.' 2. THE ASSESSEE HAD FILED ITS RETURN OF INCOME ON 3 1/07/2008, WHICH WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (I N SHORT THE ACT). LATER ON THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3 ) OF THE ACT AT AN INCOME OF RS. 1,79,04,967/- AS AGAINST THE RETURNED INCOME OF RS. 1,42,03,960/-. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, IT WAS SEEN 3 ITA NO. 697 /DEL/2014 ACIT VS JASWANT RAI ARORA THAT THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN OF RS. 35,98,717/- IN HIS ITR. THE ASSESSEE HAS UNDERVALUED THE SALE CONSIDER ATION AND THEREFORE FOR THE PURPOSE OF SECTION 50C OF THE IT ACT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED AS A RESULT OF SUCH TRANSFER AND IN ACCORD ANCE TO THIS AN ADDITION OF RS. 36,19,091/- WAS MADE U/S 50C OF THE ACT AND ALS O AN ADDITION OF RS. 57,069/- WAS MADE ON INTEREST ON HOUSING LOAN AND T HE SAME WAS ADDED TO THE INCOME OF THE ASSESSEE. THE SAID FINDING IN THE ASSESSMENT ORDER HAS WAS CONFIRMED BY THE LD. CIT(A). SINCE THE ASSESSEE HAD FURNISHED INACCURATE PARTIC ULARS OF ITS INCOME, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE IT ACT WER E INITIATED AT THE TIME OF COMPLETION OF ASSESSMENT PROCEEDINGS. A NOTICE U/S 274/271 WAS ISSUED TO THE ASSESSEE FOR LEVYING PENALTY U/S 271(1)(C) OF T HE ACT ON 30/12/2010 FIXING THE CASE FOR 06/01/2011 AND WAS DULY SERVED UPON THE ASSESSEE. HOWEVER, THE PENALTY PROCEEDINGS WERE KEPT IN ABEYA NCE AS THE ASSESSEE HAD PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHIC H HAS SINCE BEEN DELETED. A FRESH SHOW CAUSE NOTICE WAS ISSUED ON 10 /05/2012 FIXING THE CASE ON 17/05/2012. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE HAD SOUGHT ADJOURNMENT WHICH WAS ACCORDINGLY GRANTED FO R 25/05/2012 AND ON 4 ITA NO. 697 /DEL/2014 ACIT VS JASWANT RAI ARORA THAT DATE, THE ASSESSEE APPEARED AND FILED HIS WRIT TEN SUBMISSIONS, WHICH WAS NOT FOUND CONVINCING TO THE A.O. AND SHE OBSERV ED THAT THE ASSESSEE HAS COMMITTED A BRAZEN VIOLATION OF THE STATUTORY M ANDATE UPON HIM AND IS THEREFORE LIABLE FOR THE MAXIMUM PENALTY OF RS. 25, 18,440/- @ 300%, WHICH IS LEVIED ON THE ASSESSEE. 3. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A), WHO HAD DELETED THE P ENALTY ORDER OF THE A.O. BY FOLLOWING THE DECISION OF THE HONBLE CALCUTTA H IGH COURT IN THE CASE OF CIT VS MADAN THEATRES LTD. IN ITA NO. 62 OF 2013 DA TED 14 TH MAY, 2013 AND HELD THAT IT CANNOT BE HELD THAT THE APPELLANT HAD CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF HI S INCOME BASED ON THE DEEMING PROVISIONS OF SECTION 50C OF THE ACT AS THE RE IS NO FINDING IN THE PENALTY ORDER THAT THE APPELLANT HAD RECEIVED ANY A MOUNT IN EXCESS OF THE SALE CONSIDERATION STATED IN THE SALE DOCUMENT. THE REFORE, PENALTY OF RS. 24,60,258/- LEVIED BY THE A.O. ON THE ADDITION OF R S. 36,19,091/- BASED ON THE DEEMING PROVISIONS OF SECTION 50C IS DELETED. 4. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD. SR.DR HAS VEHEMENTLY RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 5 ITA NO. 697 /DEL/2014 ACIT VS JASWANT RAI ARORA 5. AT THE OUTSET, THE LD AR OF THE ASSESSEE HAS BRO UGHT TO OUR NOTICE THAT THE TRIBUNAL VIDE ORDER DATED 27/1/2016 HAS DE LETED THE QUANTUM ADDITION MADE BY THE A.O. AND THEREFORE, PENALTY IM POSED BY THE LD AO AND CONFIRMED BY THE LD. CIT(A) ARE ALSO REQUIRED TO BE DELETED AS THE SOLE BASIS FOR IMPOSING THE PENALTY WAS THE ADDITION MADE BY T HE A.O. WHILE PASSING THE ASSESSMENT ORDER. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS AN ADMI TTED POSITION THAT THE TRIBUNAL VIDE ORDER DATED 27/1/2016 HAS DELETED THE QUANTUM ADDITION MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A). I N OUR VIEW, THE PENALTY, WHICH WAS IMPOSED BY THE A.O. { DELETED BY THE LD. CIT(A) } IS REQUIRED TO BE DELETED AS THE SOLE BASIS OF IMPOSING THE PENALT Y WAS THE ADDITION MADE BY THE AO UNDER THE DEEMING PROVISIONS OF SECTION 5 0C OF THE ACT. MOREOVER, IN VIEW OF THE JUDGMENT OF THE HONBLE CA LCUTTA HIGH COURT IN THE CASE OF CIT VS. MADAN THEATERS (SUPRA), THE IMPOSIT ION OF PENALTY IS NOT CALLED FOR. BY RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HONBLE CALCUTTA HIGH COURT (SUPRA) AND MORE PARTICULARLY IN VIEW OF THE FACT THAT THE ADDITION HAD ALREADY BEEN DELETED, WE DO NOT FIND A NY GROUND SUSTAINABLE IN 6 ITA NO. 697 /DEL/2014 ACIT VS JASWANT RAI ARORA THE EYES OF LAW BY THE REVENUE, THEREFORE, THE PENA LTY IMPOSED BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) IS DELETED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 01/12/201 6. SD/- SD/- [N.K. SAINI] [LALIET KUMAR] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 01 ST DECEMBER, 2016. *RANJAN COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.