Manju Agarwal, Lucknow V. Income Tax Officer, Lucknow

ITA 740/LKW/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9109 (ITAT-LUCKNOW)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-12-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 22-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K C MEENA
• Keywords: Bonafide belief; Reasonable cause

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.740/LKW/2014 ASSESSMENT YEAR:2007 - 08 INCOME TAX OFFICER, RANGE - 1(2), LUCKNOW. VS MANJU AGARWAL, A - 430, INDIRA NAGAR, LUCKNOW. PAN:ABLPA0337J (RESPONDENT) (APPELLANT) SHRI H. P. SINGH, ADVOCATE APPELLANT BY SHRI K. C. MEENA, D. R. RESPONDENT BY 11/12/2014 DATE OF HEARING 23 /01/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - I, LUCKNOW DATED 26/06/2014 FOR THE ASSESSMENT YEAR 2007 - 2008. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) SHOULD NOT HAVE PASSED AN EX - PARTE ORDER DISMISSING THE APPEAL AS THE APPELLANT'S COUNSEL HAD BEEN PREVENTED BY SUFFICIENT CAUSE IN ATTENDING THE HEARING ON 24.06.2014, THE DATE OF ORDER. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE IMPOSITION OF PENALTY OF RS.80,219/ - U/S 271(1)(C) OF THE ACT WITHOUT APPRECIATING THAT THE ASSESSING OFFICER HAD LEVIED THE PENALTY WITHOUT CONSIDERING THE APPELLANT'S REPLY FILED ON 12.02,2013. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN LAW AND FACTS OF THE CASE IN APPRECIATING THAT THE 2 INCOME OF RS.3,53,625/ - ON ACCOUNT OF CAPITAL GAIN HAD BEEN SURRENDERED BY THE APPELLANT VOLUNTARILY WITHOUT ANY SPECIFIC NOTICE FR OM THE DEPARTMENT. 4. IN ANY CASE, THE PENALTY IMPOSED IS EXCESSIVE IN VIEW OF THE FACT THAT HON'BLE TRIBUNAL GAVE RELIEF TO THE APPELLANT IN RESPECT OF ADDITION ON ACCOUNT OF MAINTENANCE CHARGES HELD BY THE ASSESSING OFFICER AS INCOME FROM OTHER SOURCES. 3. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT TWO ADDITIONS WERE MADE FOR WHICH PENALTY HAS BEEN IMPOSED. FIRST ADDITION IS THAT THE ASSESSEE HAS RECEIVED LEASE RENT AND MAINTENANCE CHARGES SEPARATELY. THE INCOME OF MAINTENANCE CHARGES OF R S.1,40,800/ - WAS TREATED BY THE ASSESSING OFFICER AS INCOME FROM OTHER SOURCES WHEREAS THE SAME WAS CONSIDERED BY THE ASSESSEE AS INCOME FROM HOUSE PROPERTY AND STATUTORY DEDUCTION WAS CLAIMED FOR THIS. IT IS SUBMITTED THAT FOR SUCH DIFFERENT TREATMENT OF INCOME, ADDITION MAY BE THERE BUT PENALTY IS NOT JUSTIFIED. REGARDING SECOND ADDITION OF RS.3,53,625/ - , IT WAS SUBMITTED THAT THE ASSESSEE ENTERED INTO AN AGREEMENT WITH M/S ANJANI BUILDERS FOR CONSTRUCTION OF FIVE STOREYED COMPLEX , LOWER GROUND FLOOR, U PPER GROUND FLOOR, FIRST FLOOR, SECOND FLOOR AND THIRD FLOOR. AS PER THE AGREEMENT WITH THE BUILDERS, THE LGF, FIRST FLOOR AND SECOND FLOOR WAS TO BE THE BUILDERS PORTION AND UGF, THIRD FLOOR AND TERRACE WAS ALLOCATED TO THE ASSESSEE. THE ASSESSEE DID N OT DECLARE ANY CAPITAL GAIN FOR THIS TREATMENT BECAUSE THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT THIS TRANSACTION IS NOT ATTRACTING ANY CAPITAL GAIN. HE FURTHER SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHEN A QUERY WAS MADE, THE ASSESS EE ADMITTED THE SAME AND CALCULATED THE CAPITAL GAINS AND DEPOSITED THE TAX. HE SUBMITTED THAT FOR THIS ADDITION ALSO , PENALTY IS NOT JUSTIFIED. 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 3 5. WE HAVE CONSIDERED THE RIVA L SUBMISSIONS. WE FIND FORCE IN THE SUBMISSIONS OF LEARNED A.R. OF THE ASSESSEE THAT THERE WAS REASONABLE CAUSE FOR NOT INCLUDING THESE TWO INCOMES IN THE RETURN OF INCOME BY THE ASSESSEE AND IN SPITE OF ADDITION, UNDER THESE FACTS, PENALTY IS NOT JUSTIFI ED. WE ARE OF THE VIEW THAT RECEIPT OF MAINTENANCE CHARGES IS ALSO PART AND PARCEL OF RENTAL INCOME IN A GIVEN CASE AND THEREFORE, ASSESSING THE SAME INCOME UNDER DIFFERENT HEAD DOES NOT AMOUNT TO CONCEALMENT OF INCOME. REGARDING NON DECLARING OF INCOME ON ACCOUNT OF CAPITAL GAIN, WE FIND THAT NO CONSIDERATION WAS RECEIVED IN MONEY TERMS. THERE WAS AN AGREEMENT OF THE ASSESSEE WITH M/S ANJANI BUILDERS FOR CONSTRUCTION OF FIVE STOREYED COMPLEX. AS PER THE AGREEMENT WITH THE BUILDERS, THE LGF, FIRST FLOO R AND SECOND FLOOR WAS TO BE THE BUILDERS PORTION AND UGF, THIRD FLOOR AND TERRACE WAS ALLOCATED TO THE ASSESSEE. THE AREA OF UPPER GROUND FLOOR AND THIRD FLOOR WAS CONSIDERED AS RECEIPT OF THE ASSESSEE AND SAME WAS VALUE D AT RS.6,000/ - PER SQ. MTR. IN OUR CONSIDERED OPINION, FOR SUCH ADDITION, IT CANNOT BE SAID THAT THERE IS ANY CONCEALMENT OF INCOME IN THE FACTS OF THE PRESENT CASE AND THEREFORE, PENALTY IS NOT JUSTIFIED. WE, THEREFORE, DELETE THE PENALTY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23 /01/2015 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR