DCIT 23(3), MUMBAI V. THOMAS MARKS ALMEDA, MUMBAI

ITA 732/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7844 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Department
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 03-02-2015
• Court: TRIBUNAL
• Department Lawyers: ARJU GARODIA
• Keywords: Value adopted by valuation officer; Cost of acquisition
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER I.T.A. NO.732/M/2015 (ASSESSMENT YEAR: 2007 - 2008 ) DCIT - 23(3), R.NO.104, MATRU MANDIR, TARDEO ROAD, GRANT ROAD, MUMBAI 400007. / VS. SHRI THOMAS MARKS ALMEDA, 301/302, NEELAM APARTMENTS, PLOT NO.34A, TPS - IV, JUNCTION OF 8 TH AND 9 TH ROAD, BANDRA (W), MUMBAI - 50. ./ PAN : AGZPA6535B ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : MS. ARJU GARODIA, DR / RESPONDENT BY : SHRI ASHOK PATIL / DATE OF HEARING : 08 .03.2017 / DATE OF PRONOUNCEMENT : 31 .03.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT (A) - 34, MUMBAI DATED 28.11.2014. 2. THE SOLITARY ISSUE RAISED BY THE REVENUE IN THIS APPEAL RELATES TO THE CIT (A)S DECISION IN DELETING THE PENALTY OF RS. 13,30,800/ - LEVIED BY THE AO U/S 271(1)(C) OF THE ACT IN RESPECT OF ADDITION OF INTEREST ON SAVINGS BANK OF RS. 2,36,696/ - AND CAPITAL GAIN OF RS. 55,75,228/ - . 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE AO LEVIED PENALTY F OR A COUPLE OF ADDITIONS IN THE ASSESSMENT MADE U/S 143(3) OF THE ACT. IN THE ASSESSMENT AO NOTICED THAT THE ASSESSEE CONCEALED INTEREST INCOME OF RS. 2,36,696/ - . FURTHER, AO ALSO MADE ADDITION ON ACCOUNT OF CAPITAL GAINS AND THE COMPUTATION WAS MADE CON SIDERING THE COST OF ACQUISITION BASED ON THE DVO / REGISTERED VALUERS REPORT OF THE ASSESSEE. 4. BEFORE US, LD COUNSEL FOR THE ASSESSEE RELIED HEAVILY ON THE OF THE ORDER OF THE CIT (A) WHO DELETED THE ENTIRE PENALTY. 5. ON THE OTHER HAND, LD DR FOR THE REVENUE DEMONSTRATED THAT THE INTEREST INCOME WAS DISCOVERED BY THE AO. BRINGING OUR ATTENTION TO PAGE 4, ITEM NO.3 OF 2 THE PAPER BOOK RELATING TO THE EVIDENCES REGARDING VARIOUS INCOMES SHOWN BY YOU , LD COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE SAME CONSTITUTES GENERAL QUERY AND THEREFORE, THE DISCOVERY, IF ANY IS NOT ATTRIBUTABLE TO THE AOS INVESTIGATION. FURTHER, MENTIONING THAT THE ASSESSEES REPLY AT ITEM NO.18 TO THE SAID NOTICE U/S 142(1) REFLECTS THE ASSESSEES VOLUNTARY OFFER OF THE SAID INTEREST INCOME EARNED FROM THE SAVINGS ACCOUNT IN THE BANK. 6. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US, WE FIND, PAGES 1 TO 4 OF THE PAPER BOOK , WITH REGARD TO THE INTEREST INCOME IN GENERAL AND FOR THE SHOW CAUSE NOTICE DATED 27.2.2009 (PAGE 4 OF THE PB) IN PARTICULAR HELPED THE AO IN DISCOVERY OF THE CONCEALED INTEREST INCOME . THE ASSESSEE WOULD NOT HAVE OFFERED THE SAID INTEREST INCOME AMOUNTING TO RS. 2,36,696/ - DURING THE ASSESSMENT PROCEEDINGS BUT FOR THE SAID AOS LETTER TO ASSESSEE . THEREFORE, THE ARGUMENT OF THE LD COUNSEL FOR THE ASSESSEE THAT THE SAME CONSTITUTES VOLUNTARY OFFER OF INCOME STANDS DISMISSED. THEREFORE, WE ARE OF THE OPINION THE PENALTY LEVIED BY THE AO ON THIS PART OF THE ADDITION IS SUSTAINABLE. AO IS DIRECTED ACCORDINGLY. 7. REGARDING THE PENALTY ATTRIBUTABLE TO THE CAPITAL GAINS, IT IS AN ADMITTED POSITION BUT FOR THE DVO REPORT / REGISTERED VALUERS REPORT REGARDING THE COST OF ACQUISITION OF THE ASSETS, THE ADDITION WOULD NOT HAVE BEEN MADE BY THE AO. IN OUR OPINION, THE SAID REPORTS CONSTITUTE A CONCEALED INCOME. IT IS A SETTLED LEGAL POSITION IN THE MATTER BY VIRTUE OF THE JUDGMENT OF THE HONBL E APEX COURT IN THE CASE OF DILIP N SHROFF VS. JCIT [2007] 292 ITR 519 (SC) THAT THE PENALTIES LEVIED ON THE BASIS OF THE REPORT OF THE DVO ARE NOT SUSTAINABLE IN LAW. THEREFORE, IN OUR VIEW, THE DECISION TAKEN BY THE CIT (A) ON THIS PART OF THE PENALTY I S FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. WE AFFIRM THE DECISION OF THE CIT (A) ON THIS ISSUE. 8. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED. ORDER PRONOU NCED IN THE OPEN COURT ON 31 ST MARCH, 201 7 . SD/ - SD/ - (SANDEEP GOSAIN) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 31.03 .201 7 3 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI