MALA M. KEWLANI, MUMBAI V. ITO WD 7(1)(4), MUMBAI

ITA 7359/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1655 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-01-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 27-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DIPAK KUMAR SINHA
• Keywords: Cost of acquisition; Difference of opinion; Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI I.P.BANSAL,JUDICIAL MEMBER & SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO. 7359/MUM/2010(A.Y.2005-06) MALA M. KEWLANI, 903, OM SHANTI HEIGHTS, OPP. ICICI BANK, G.D.AMBEDKAR MARG, WADALA, MUMBAI - 31. PAN:AAHPK 5066B (APPELLANT) VS. THE ITO, WARD 7(1)(4), MUMBAI. (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI DIPAK KUMAR SINHA DATE OF HEARING : 01/01/2013 DATE OF PRONOUNCEMENT : 0 4/01/2013 ORDER PER I.P.BANSAL, J.M THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DI RECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-13 MUMBAI DATED 3/6/2010 FOR A SSESSMENT YEAR 2005- 06. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE R EAD AS UNDER: 1. THE LEARNED CIT(APPEAL) NEITHER GIVEN PROPER O PPORTUNITY OF HEARING NOR CONSIDERED WRITTEN SUBMISSION MADE BEFORE HIM. 2. THE LEARNED CIT(APPEAL) HAS NOT CONSIDERED THE DIFFERENCE BETWEEN INACCURATE PARTICULARS OF INCOME & DISALLOWANCES ON THE BASIS OF DIFFERENCE OF OPINION. THE ASSESSEE HAS SHOWN ALL THE PARTICULARS IN WRITTEN OF INCOME BUT THE LEARNED ITO HAS DISALLOWE D CERTAIN EXPENSES. 2. THE ASSESSEE SOLD A BUNGALOW AT VERSOVA FOR A SU M OF RS.35.00 LACS ON 16/4/2004. THE ASSESSEE CLAIMED THAT THE COST OF A CQUISITION OF THE SAID BUNGALOW WAS A SUM OF RS.30,24,522/-, WHICH INCLUDE THE COST OF ACQUISITION ITA NO. 7359/MUM/2010(A.Y.2005-06) 2 OF LAND OF RS.5,73,674/-. FROM THE DETAILS THE AO NOTICED THAT FOLLOWING AMOUNTS COULD NOT BE CONSIDERED AS A COST CLAIMED BY THE ASSESSEE. (AMOUNT RS.) 1) PAYMENT MADE ON 19/5/1998 FOR INSECTICIDE TREAT MENT TO WATER SUPPLY & SEWERAGE DEPT. 8,993/- 2) PAYMENT MADE ON 31/12/1988 TO M/S.STAR SECURIT Y 2,600/- 3) -DO- ON 15/12/1988 2,600/- 4) PROPERTY TAXES PAID ON 15/03/1999 23,204/- 5) PROPERTY TAX PAID ON 22/6/1999 11,528/- 6) SECURITY DEPOSIT PAID TO BSES ON 18/11/1999 1,650/- 7) PROPERTY TAXES PAID TO MUNICIPALITY ON 20/11/19 99 11,528/- 8) PROPERTY TAXES PAID ON 08/06/2000 13,812/- 9) PROPERTY TAXES PAID ON 11/11/2000 13,812/- 10) LEASE RENT PAID TO MHADA 14/03/2001 33,947/- 1,23,67 4/- ====== == THE AO, THEREFORE, REDUCED THE AFOREMENTIONED AMOU NT AND THUS CALCULATED LONG TERM CAPITAL GAIN AT RS.1,73,746/- IN PLACE OF LOSS SHOWN BY THE ASSESSEE AT RS.3,77,496/-. THE CONCEALMENT PENALTY HAS BEEN IMPOSED ON THE ABOVE MENTIONED AMOUNT OF RS.1,23,674/-, WHICH HAS NOT BE EN CONSIDERED BY THE AO AS COST OF ACQUISITION AND IN THIS MANNER COST OF I NDEXATION BENEFIT ALSO HAS NOT BEEN PROVIDED. IT IS ON THIS DIFFERENCE CONC EALMENT PENALTY HAS BEEN LEVIED. IN REPLY TO SHOW CAUSE NOTICE IT WAS SUBMI TTED BY THE ASSESSEE TO THE AO THAT DIFFERENCE IN ASSESSABLE INCOME IS ONLY ON ACCOUNT OF REWORKING OF LONG TERM CAPITAL GAIN. THE ASSESSEE AT NO GIVEN P OINT HAS CONCEALED OR WRONGLY CLAIMED ANY UNRECORDED EXPENDITURE. THUS, THERE IS NO CONCEALMENT. HOWEVER, AO DID NOT ACCEPT SUCH SUBMISSION OF THE A SSESSEE ON THE GROUND THAT WHAT HAS BEEN CLAIMED AS THE COST OF ASSET IS NOT IN THE NATURE OF CAPITAL AS THOSE ITEMS PERTAINED STATUTORY PAYMENTS MADE BY THE ASSESSEE TO THE LOCAL AUTHORITIES. THE AO HAS CALCULATED CONCEALME NT PENALTY @100% OF THE TAX SOUGHT TO BE EVADED AT A SUM OF RS. 1,10,248/-. THE PENALTY LEVIED BY THE ITA NO. 7359/MUM/2010(A.Y.2005-06) 3 AO HAS BEEN SUSTAINED BY LD. CIT(A). LD. CIT(A) HA S CONFIRMED THE PENALTY ON THE GROUND THAT ASSESSEE HAS FURNISHED INACCURATE P ARTICULARS OF INCOME AND, THEREFORE, HAS CONCEALED THE INCOME. 3. NOTICE OF HEARING WAS SENT TO THE ASSESSEE. HOW EVER, NONE WAS PRESENT ON THE FIXED DATE OF HEARING. AS IT IS A SMALL AP PEAL, WE PROCEEDED TO DECIDE THE APPEAL AFTER HEARING LD. D.R. 4. LD. DR AFTER NARRATING THE FACTS AND RELYING UPO N THE ORDER OF AO AND CIT(A) PLEADED THAT PENALTY HAS RIGHTLY BEEN CONFIR MED BY LD. CIT(A) AND HIS ORDER SHOULD BE UPHELD 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSION OF L D.DR. WE HAVE ALSO CAREFULLY GONE THROUGH THE ASSESSMENT ORDER, PENALT Y ORDER AND THE ORDER PASSED BY LD. CIT(A). THE ASSESSEE DID NOT PREF ER QUANTUM APPEAL AGAINST THE ADDITION AND IN THE WRITTEN SUBMISSION FILED BE FORE LD. CIT(A) VIDE A LETTER SUBMITTED ON 9/12/2009, THE ASSESSEE HAD CONTENDED THAT ALL THE FACTS AND PARTICULARS WERE MENTIONED, THEREFORE, THERE IS NO FURNISHING OF INACCURATE PARTICULARS ; THERE IS NO CONSCIOUS BREACH OF LAW; PENALTY CANNOT BE IMPOSED IN A CASE WERE ASSESSEE HAS FILED ITS RETURN DISCLOSI NG ALL MATERIAL FACTS OF THE CASE AND IF AO TAKES A VIEW CONTRARY TO THAT EXPRES SED BY THE ASSESSEE, IT DOES NOT PER-SE MEAN THAT ASSESSEE HAD ADOPTED ILLEGAL D EVICE FOR REDUCING ITS TAX LIABILITY [ T.ASHOK PAI VS. CIT, 292 ITR 11(SC) ; D ILIP AND SHRROF VS. ACIT, 295 ITR 519]. HOWEVER, LD. CIT(A) HAS CONSIDERED NONE OF THESE SUBMISSIONS OF THE ASSESSEE AND HAS HELD THAT ASSESSEE HAS FURNISHED I NACCURATE PARTICULARS OF HER INCOME. IT IS NOT THE CASE OF REVENUE THAT ASS ESSEE DID NOT FILE ALL DETAILS AND PARTICULARS IN THE RETURN OF INCOME ITSELF. TH EREFORE, IT IS NOT THE CASE OF FURNISHING INACCURATE PARTICULARS OF INCOME.. ACCO RDING TO THE VIEW ADOPTED BY THE ASSESSEE, IMPUGNED ITEMS COULD CONSTITUTE COST OF ACQUISITION OF THE PROPERTY. ACCORDING TO AO THOSE EXPENDITURE ARE N OT IN THE NATURE OF CAPITAL. IT IS ALSO NOT THE CASE OF REVENUE THAT AFOREMENTIO NED AMOUNTS WERE CLAIMED BY ITA NO. 7359/MUM/2010(A.Y.2005-06) 4 THE ASSESSEE AS REVENUE EXPENDITURE IN RESPECTIVE YEARS. KEEPING IN VIEW ALL THESE FACTS, WE ARE OF THE OPINION THAT IT WAS A DE BATABLE ISSUE ON WHICH THERE COULD BE TWO OPINIONS. ACCORDING TO WELL SETTLED LAW CONCEALMENT PENALTY CANNOT BE IMPOSED ON AN ISSUE ON WHICH TWO VIEWS A RE POSSIBLE. THEREFORE, IN OUR OPINION, IT IS NOT A FIT CASE WHERE LEVY OF CON CEALMENT PENALTY CAN BE HELD TO BE JUSTIFIED. THEREFORE, WE DELETE THE PENALTY AND ALLOW THE APPEAL FILED BY THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 4 TH DAY OF JAN.2013 SD/- SD/- (RAJENDRA ) (I.P.BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 4 TH JAN.2013 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.R B BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM.