JAYARAJ A DOSHI, MUMBAI V. ASST CIT 19(2), MUMBAI

ITA 7377/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79555 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 28-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 13-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S S PHADKAR
• Keywords: Cost of acquisition; Wrong claim
• Section: 143(3); 54

Judgement Text

, ,, , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MU MBAI . . ! , ' #$% & & & & '&& &( , ) #$% #* #* #* #* BEFORE, SHRI N.K.BILLAIYA, AM AND SHRI VIVEK VARMA, JM # ./ I.T.A. NO. 7377 /MUM/2012 ( ) ( ) ( ) ( ) ( &+( &+( &+( &+( / ASSESSMENT YEAR : 2008-09) SHRI JAYRAJ A.DOSHI, 601, TULSI VILLA, BASENT RAOD, SANTACRUZ(W), MUMBAI-400054 / VS. ASST. CIT19(2), PIRAMAL CHAMBERS, PAREL, LALBAUG, MUMBAI-400012 %, ' # ./ PAN : AHCPD5271D ( ,- / APPELLANT ) .. ( ./,- / RESPONDENT ) ,- 0 1 # / APPELLANT BY : SHRI S.S. PHADKAR ./,- 0 1 # / RESPONDENT BY : DURGA DUTT # & 0 2' / DATE OF HEARING : 28 /07/2014 34+ 0 2' / DATE OF PRONOUNCEMENT : 28 /07/2014 $5 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE CIT(A)-30, MUMBAI DATED 12/10/2012, A.Y.2008-09 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASSESSMENT ORDER DATED 2 0/12/2010 MADE U/S 143(3) OF THE ACT. WHILE SCRUTINIZING THE RETURN, THE AO NOTICED THAT THE ASSESSEE HAS SURRENDERED TENANCY RIGHTS FOR A CONSI DERATION OF RS.1.30 CRORES. THE AO FURTHER NOTICED THAT THE ENTIRE CAP ITAL GAIN ARISING THERE FROM WAS INVESTED IN PURCHASE OF TWO FLATS IN RIDHI SIDHI TOWER, FILM CITY 2 ITA NO.7377/MUM/2012 SHRI JAYRAJ A.DOSHI ROAD, MALAD (E), MUMBAI. THE ENTIRE CAPITAL GAIN A RISING FROM SURRENDER OF THE TENANCY RIGHTS WAS CLAIMED AS EXEMPT U/S 54 OF THE ACT. THE ASSESSEE FILED REVISED COMPUTATION OF INCOME ON 20/ 05/2010 BY WHICH THE ASSESSEE WITHDREW THE CLAIM OF EXEMPTION IN RESPECT OF ONE OF THE TWO FLATS AMOUNTING TO RS.56.38 LAKHS. THE ASSESSMENT WAS CO MPLETED ON THE REVISED INCOME AT RS.91.26 LAKHS. THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR FILING INACCURATE PART ICULARS OF INCOME. 3. DURING THE COURSE OF THE PENAL PROCEEDINGS, THE ASS ESSEE CONTENDED THAT INITIALLY HE CLAIMED EXEMPTION U/S 5 4 ON THE PURCHASE COST OF TWO FLATS, SUBSEQUENTLY BEING ADVISED ON THE DEC ISION OF THE TRIBUNAL IN THE CASE OF MRS. SUSHILA M. JHAVERI V/S ITO 107 ITD 327 . THE ASSESSEE WITHDREW THE CLAIM IN RESPECT OF ONE OF THE TWO FLA TS. THE ASSESSEE FURTHER CONTENDED THAT IT WAS NOT A FALSE CLAIM THEREFORE T HE FACTS ARE COVERED BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF M/S RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 198. THE EXPLANAT ION/SUBMISSION OF THE ASSESSEE DID NOT FIND FAVOUR WITH AO WHO WENT ON LE VY OF PENALTY U/S 271(1)(C) OF THE ACT READ WITH EXPLANATION 1. 4. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESSES. 5. AGGRIEVED, THE ASSESSEE IS BEFORE US. THE LD. COUNS EL FOR THE ASSESSEE REITERATED THAT THE CLAIM U/S 54 IN RESPEC T OF TWO FLATS WAS A GENUINE CLAIM BUT BECAUSE OF THE DECISION OF THE TR IBUNAL, THE CLAIM WAS REVISED. THEREFORE, IT IS NOT A FIT CASE FOR THE L EVY OF PENALTY U/S 271(1)(C) OF THE ACT. PER CONTRA THE LD. DR STRONGLY SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES. 6. WE HAVE CAREFULLY PERUSED THE ORDER OF THE AUTHORIT IES BELOW. IT IS NOT IN DISPUTE THAT INITIALLY THE ASSESSEE CLAIMED EXEMPTION U/S 54 OF THE ACT FOR INVESTMENT IN TWO FLATS. IT IS ALSO NOT IN DISPUTE THAT SUBSEQUENTLY 3 ITA NO.7377/MUM/2012 SHRI JAYRAJ A.DOSHI THERE ARE MANY JUDICIAL DECISIONS WHEREIN INVESTMEN T IN TWO FLATS HAVE BEEN ACCEPTED FOR THE CLAIM OF DEDUCTION U/S 54/54F OF THE ACT, WHICH SHOWS THAT TWO VIEWS ARE POSSIBLE. WHERE TWO VIEWS ARE POSSIBLE FOR CLAIM OF DEDUCTION/EXEMPTION AND IF THE ASSESSEE HAS TAKE N ONE POSSIBLE VIEW PENALTY CANNOT BE LEVIED U/S 271(1)(C) OF THE ACT. WE THEREFORE SET-ASIDE THE FINDINGS OF THE CIT(A) AND DIRECT THE AO TO DEL ETE THE PENALTY SO LEVIED U/S 271(1)(C) OF THE ACT. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/07/2014 $5 0 34+ ' 6$ 28/07/2014 , 4 0 7 SD/- (VIVEK VARMA) SD/- (N.K.BILLAIYA) ) #$% / JUDICIAL MEMBER ' #$% / ACCOUNTANT MEMBER MUMBAI; 6$ /DATED : 28 TH JULY, 2014. F{X~{TA F{X~{TA F{X~{TA F{X~{TA P.S. P.S. P.S. P.S. $5 $5 $5 $5 0 00 0 .)28' .)28' .)28' .)28' 9'+2 9'+2 9'+2 9'+2 / COPY OF THE ORDER FORWARDED TO : 1. ,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. : ( ) / THE CIT- , MUMBAI. 4. : / CIT(A)- , MUMBAI 5. '&;7 .)2) , , / DR, ITAT, MUMBAI 6. 7<( = / GUARD FILE. $5 # $5 # $5 # $5 # / BY ORDER, #/'2 .)2 //TRUE COPY// > >> > / #? #? #? #? (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI