GOKULDHAM AGRICOM LTD, MUMBAI V. DCIT RG 8(1), MUMBAI

ITA 7424/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0764 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2005-2006
• Appeal Filed On: 17-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N V NADKARNI
• Keywords: Sale consideration of property below Jantri Value; Depreciation; Wrong claim
• Section: 143(3); 50C

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G , MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.7424/MUM/2013 ASSESSMENT YEAR: 200 5 - 06 M/S. GOKULMANI AGRICOM LTD. (FORMERLY KNOWN AS GOKULMANI REAL ESTATE DE. PVT. LTD.) AKHANDANAND, 38, MAROL CO - OP. INDUSTRIAL ESTATE OFF M.V. ROAD, SAKINAKA ANDHERI (E), M UMBAI 400 059 P.A. NO.AABCG5860C / VS. DCIT, RANGE - 8(1) AAYAKAR BHAVAN MUMBAI 400 020 / APPELLANT / RESPONDENT / REVENUE BY SHRI N.V. NADKARNI / ASSESSEE BY SHRI MADHUR AGARWAL / DATE OF HEARING : 2 7 /05/2015 / DATE OF ORDER : 04 / 06 /2015 2 M/S. GOKULMANI AGRICOM LTD. / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 30 TH SEPTEMBER 2013, OF THE LEARNED FIRST APPELLATE AUTHORITY, MUMBAI, CONFIRMING PENALTY OF RS.2,07,403, IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) ON DEPRECIATION CLAIMED AT RS.5,66,789. 2. DURING THE HEARING OF THIS APPEAL, THE L EARNED COUNSEL FOR THE ASSESSEE, SHRI MADHUR AGARWAL, CONTENDED THAT NEITHER THERE IS CONCEALMENT OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME BY EXPLAINING THAT PART OF THE DEPRECIATION WAS ALLOWED BY THE LEARNED CIT(A) AND SHORT TERM CAPITAL GAIN WAS DELETED. IT WAS PLEADED THAT THE QUANTUM WAS NOT CHALLENGED BEING THE ADDITION WAS SMALL AND THE AO AS WELL AS THE LEARNED CIT(A) DID DISPUTE THE STAND OF THE ASSESSEE. OUR ATTENTION WAS INVITED TO THE SUBMISSIONS MADE BEFORE THE AO AS WE LL AS THE LEARNED CIT(A) ALONG WITH OTHER PAGES OF THE PAPER BOOK BY CONTENDING THAT THE MOU WAS PRODUCED BEFORE THE AO AS WELL AS BEFORE THE LEARNED CIT(A). OUR ATTENTION WAS ALSO INVITED TO PAGES 121 (AGREEMENT), 135 (RECEIPT) BY EXPLAINING THAT ALL THE DETAILS WERE DULY FURNISHED BEFORE THE AO AS WELL AS BEFORE THE LEARNED CIT(A) AND THE TRANSACTION WAS MADE BY CHEQUE IN THE YEAR 1997. THE CRUX OF THE ARGUMENT IS THAT THE ASSESSEE FILED THE NECESSARY DETAILS, THUS, IT IS NOT A CASE OF PENALTY. ON THE OTH ER HAND, MRS. N.V. NADKARNI, LEARNED D.R. DEFENDED THE IMPOSITION AS WELL AS CONFIRMATION OF 3 M/S. GOKULMANI AGRICOM LTD. PENALTY BY CONTENDING THAT NECESSARY DETAILS WERE NOT FILED BY THE ASSESSEE, THEREFORE, IT IS A CLEAR CASE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSELS, IF KEPT IN JUXTAPOSITION AND ANALYZED, WE FIND THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS LEASING AND WAREHOUSING, ETC. THE ASSESSEE DECLARED LOSS OF RS.18,62,455, ON 26 TH OCTOBER 2005, AND THE ASSESSMENT W AS COMPLETED U/S 143(3) OF THE ACT, ASSESSING THE INCOME AT RS.2,61,167 (ERRONEOUSLY STATED AS RS.2,67,160 IN THE ORDER) . THE AGGRIEVED ASSESSEE CHALLENGED THE ASSESSMENT ORDER IN APPEAL BEFORE THE LEARNED CIT(A) WHEREIN VIDE ORDER DATED 20 TH AUGUST 2010, THE ADDITION OF DEPRECIATION OF RS.5,66,789, AND SHORT TERM CAPITAL GAIN OF RS.5,89,364, WAS AFFIRMED. THEREAFTER, THE A.O. IMPOSED PENALTY U/S 271(1)(C) OF THE ACT @ 100% ON THE ADDITIONS WHICH WAS CONFIRMED BY THE LEARNED CIT(A). THE ASSESSEE IS IN APPEA L BEFORE THE TRIBUNAL. 3.1 WE FIND THAT WHILE DEALING WITH THE QUANTUM ADDITION AND EVEN PENALTY PROCEEDINGS, PART RELIEF WAS GIVEN TO THE ASSESSEE BY THE LEARNED FIRST APPELLATE AUTHORITY. THE FACT REMAINS THAT THE ASSESSEE FILED THE NECESSARY DETAILS OF SALES AND THE TRANSACTION WAS MADE BY CHEQUE IN THE YEAR 1997 MEANING THEREBY , THE 4 M/S. GOKULMANI AGRICOM LTD. NECESSARY DETAILS WERE DUL Y FILED BEFORE THE A.O. AS WELL AS BEFORE THE LEARNED CIT(A). INS OFAR AS THE DEEMING FICTION AND ALLEGED FAILURE OF THE ASSESSEE IS CONCERNED, WE ARE OF THE VIEW THAT SINCE THE ASSESSEE HAS DULY DECLARED THE DETAILS OF SALES RIGHT FROM THE ASSESSMENT STAGE , THEREFORE, EVEN IF PART RELIEF IS GIVEN TO THE ASSESSEE, THE FACT REMAINS THAT THE ASSESSEE NEITHER CONCEALED ITS INCOME NOR FURNISHED INACCURATE PARTICULARS, THEREFORE, THE DECISION FROM THE HONBLE SUPREME COURT IN RELIANCE PETROPRODUCTS PVT. LTD., 322 ITR 158 (SC) COMES TO THE RESCUE OF THE ASSESSEE. THE VASHI PROPERTY, HELD BY THE ASSESSEE, BELONGED TO JAYANT GROUP OF COMPANIES UP TO 2002 AND AFTER THE PARTITION IN THE GROUP, THE ASSESSEE COMPANY WAS GIVEN THE PROPERTY INITIALLY BELONGING TO JAYANT OI L MILLS PVT. LTD., THE OTHER GROUP. THE PROPERTY UP TO PARTITION WAS HELD AS STOCK - IN - TRADE IN THE BOOKS OF M/S. JAYANT OIL MILLS PVT. LTD., AND SUBSEQUENTLY, THE ASSESSEE TREATED THIS PROPERTY IN ITS BOOKS AS FIXED ASSETS. A UNIT OF THE SAID PROPERTY WAS SOLD TO MRS. KAVITA PATIL, AS PER SALE AGREEMENT DATED 23 RD APRIL 2004. THE LEARNED A.O. CONSIDERED RS.27,28,500, AS SALE CONSIDERATION, AS PER THE SALE AGREEMENT FOR CALCULATING CAPITAL GAINS OF THIS UNIT OUT OF VASHI PROPERTY. M/S. JAYANT OIL MILLS LTD., EARLIER OWNER OF THE VASHI PROPERTY, OFFERED THE AMOUNT TO TAX. ON PARTITION WITH M/S. JAYANT OIL MILLS, THE VASHI PROPERTY WAS TRANSFERRED TO THE ASSESSEE COMPANY WHO RECEIVED THE BALANCE CONSIDERATION OF RS.5 LAKHS AND AS PER THE COPY OF AGREEMENT WITH MRS. KAVITA PATIL, THE SALE PRICE WAS PAID AS PER THE AGREEMENT. THE DETAILS OF PAYMENT / CHEQUE DETAILS RECORDED IN THE AGREEMENT HAVE BEEN REPRODUCED AT PAGE - 4 (PARA - 3.2 OF THE IMPUGNED ORDER). 5 M/S. GOKULMANI AGRICOM LTD. THE LEARNED CIT(A) IN PARA - 3.3 (PAGE - 7) HAS MENTIONED THAT THIS CANNOT BE SAID TO BE A BONA FIDE CLAIM, EVEN THOUGH ALL PARTICULARS WERE FURNISHED BEFORE THE A.O. RATHER FAVOURS THE ASSESSEE BECAUSE IT HAS BEEN ADMITTED THAT ALL PARTICULARS WERE FURNISHED BEFORE THE A.O. PRESUMABLY, EVEN IF, THE DEPRECIATION HAS BEEN INCORRECTLY WORKED OUT, IT CANNOT BE SAID THAT THE NECESSARY DETAILS WERE NOT FILED BY THE ASSESSEE. IT WAS THE DUTY OF THE A.O. TO TAKE A VIEW ON THE BASIS OF INFORMATION FILED BY THE ASSESSEE . IN VIEW OF THESE FACTS, WE ARE SATISFIED THAT THE ASSES SEE NEITHER CONCEALED ITS INCOME NOR FURNISHED INACCURATE PARTICULARS OF INCOME WHICH ARE THE MAIN INGREDIENTS FOR IMPOSING PENALTY U/S 271(1)(C) OF THE ACT. OUR VIEW IS FORTIFIED BY THE DECISION OF THE HONBLE SUPREME COURT IN RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA). IT IS ALSO NOT THE CASE THAT CONCEALMENT, IF ANY, WAS DETECTED BY THE DEPARTMENT AND THEREAFTER, THE ASSESSEE FILED THE DETAILS. THE NECESSARY DETAILS WERE ALREADY AVAILABLE WITH THE A.O. AND THE LAPSES, IF ANY, WERE DETECTED THEREAFTER I.E., DURING THE SCRUTINY PROCEEDINGS BUT THE FACT REMAINS THAT THE NECESSARY DETAILS WERE ALREADY AVAILABLE ON RECORD. THE LEARNED CIT(A) OBSERVED THAT THE PERSON WHO MAKES A FALSE CLAIM SHOULD NOT GET AWAY WITH THE LIABILITY. HOWEVER, THE HONBLE APEX COURT, AS MENTIONED EARLIER, HAS HELD THAT MERE MAKING A FALSE CLAIM BY ITSELF CANNOT BE SAID THAT THE ASSESSEE CONCEALED ITS INCOME AND PER - SE CANNOT LEAD TO IMPOSITION OF PENALTY. AT PAGE - 9 OF THE IMPUGNED ORDER, THE LEARNED CIT(A) HAS MENTIONED AS UNDER: - I N THE PRESENT CASE, THE APPELLANT DID FILE AN EXPLANATION TO SUPPORT ITS CLAIM, BUT THE SAME WAS NOT FOUND ACCEPTABLE AS 6 M/S. GOKULMANI AGRICOM LTD. THE CLAIM WAS NOT ALLOWABLE AND IT WAS NOT A BONA FIDE CLAIM AS HAS BEEN BROUGHT OUT ABOVE. IN THESE CIRCUMSTANCES, THE EXPLANATION OF THE ASSESSEE THAT SINCE ALL MATERIAL FACTS WERE DISCLOSED AND THE CLAIM IS BONA FIDE, DOES NOT MERIT ACCEPTANCE. THE PENALTY LEVIED BY A.O. ON THIS DISALLOWANCE OF DEPRECIATION IS ACCORDINGLY CONFIRMED . THE ABOVE OBSERVATION OF THE ASSESSEE HAS ALREADY BEEN ANSWERED BY THE HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA), THEREFORE, THE ASSESSEE IS HAVING MERIT IN ITS CONTENTION. 3.2 INSOFAR AS THE ENHANCEMENT OF LONG TERM CAPITAL GAINS AND LEVY OF PENALTY WITH RESPECT TO THE A DDITION SO MADE TAKING THE VALUE OF SALE CONSIDERATION ADOPTED BY THE STAMP VALUATION AUTHORITY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT IS CONCERNED, WE NOTE THAT THE ADDITION HAS BEEN MADE ON THE BASIS OF DEEMING PROVISIONS OF THE ACT. NO EVIDEN CE HAVE BEEN PRODUCED BY THE REVENUE THAT THE ASSESSEE ACTUALLY RECEIVED A HIGHER AMOUNT THAN WHAT WAS DISCLOSED IN THE SALE DEED. THE LEARNED CIT(A) FOLLOWED RENU HINGORANI CASE PASSED BY THE TRIBUNAL AND DELETED THE ADDITION , WE APPRECIATE THE REASONING CONTAINED THEREIN. TOTALITY OF FACTS CLEARLY INDICATE THAT THE ASSESSEE NEITHER CONCEALED THE INCOME NOR FURNISHED INACCURATE PARTICULARS OF INCOME, THEREFORE, IT IS NOT A FIT CASE FOR IMPOSING PENALTY U/S 271(1)(C) OF THE ACT, THEREFORE, WE DIRECT THE A.O . TO DELETE THE PENALTY. 7 M/S. GOKULMANI AGRICOM LTD. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CO NCLUSION OF THE HEARING ON 27 TH MAY 2016 . SD/ SD/ ( N.K. BILLAIYA ) (JOGINDER SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 04 /06 /2015 S.K , P.S/. . . / PRADEEP CHOWDHURY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT, MUMBAI. 4. / CIT(A) - , MUMBAI 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI