ASST CIT 18(3), MUMBAI V. ANKUR ANANT KEER, MUMBAI

ITA 7533/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0644 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 24-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Keywords: Capital asset; Gift; Cost of acquisition; Wrong claim; Revised return

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO.7533/MUM/2013 / ASSESSMENT YEAR 2008-09 THE ACIT 18(3), ROOM NO.209, 2 ND FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI. / VS. SHRI ANKUR ANANT KEER, FLAT NO.1004, 10 TH FLOOR, SANGHVI MAGESTIC, MANMALA TANK ROAD, MAHIM, MUMBAI 400 016. ./ ./ PAN/GIR NO. : AEOPK 4346R ( / APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY SHRI NEIL PHILIP RESPONDENT BY SHRI R.M.SAVANT ! ' / DATE OF HEARING : 27/05/2015 ! ' / DATE OF PRONOUNCEMENT : 27/05/2015 / O R D E R PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE REVENUE AND IT IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-29, MUMBAI DATED 15/10/2013 F OR ASSESSMENT YYEAR 2008-09. GROUNDS OF APPEAL READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.4,14,253/- IMPOSED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE I.T. ACT, 1961 WITHOU T APPRECIATING THE FACT THAT THE ASSESSEE HAD OFFERED CAPITAL GAINS ON SALE OF PROPE RTY WHEREIN FALSE CLAIM OF INDEXATION WAS MADE FOR THE PERIOD PRIOR TO THE DAT E WHEN THE ASSESSEE ACTUALLY BECAME THE LEGAL OWNER OF THE SAID PROPERTY. . / ITA NO.7533/MUM/2013 / ASSESSMENT YEAR 2008-09 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS4,14,253/- I MPOSED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE I.T. ACT, 1961 WITHOU T APPRECIATING THE FACT THAT THE SAID DISCREPANCY IN THE WORKING OF CAPITAL GAIN WER E BROUGHT ON RECORD ONLY SINCE THE SCRUTINY PROCEEDINGS WERE INITIATED. THAT HAD T HE ASSESSMENT PROCEEDINGS NOT BEEN INITIATED, THE ASSESSEE WOULD HAVE GOT AWAY WI TH THE SAID DISCREPANCY AND THE WRONGFUL CLAIM MADE BY IT TO THE DETRIMENT OF T HE REVENUE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.4,14,253/- IMPOSED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE I.T. ACT, 1961 WITHOU T APPRECIATING THE FACT THAT THE ADOPTION OF DIFFERENT METHOD BY THE ASSESSING OFFIC ER FOR THE WORKING OF THE CAPITAL GAINS HAD RESULTED INTO ENHANCEMENT OF INCO ME BY AN AMOUNT OF RS.18,28,126/- AND THE ASSESSEE HAD NOT PREFERRED A NY APPEAL BEFORE THE CIT(A) AGAINST THE SAID DISALLOWANCE 1 REWORKING OF LONG T ERM CAPITAL GAINS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RSA,14,253/- I MPOSED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE LT. ACT, 1961 WITHOUT APPRECIATING THE FACT THAT IN THE DECISION OF THE DELHI HIGH COURT VIDE ORDER DATED 1 0/08/2013 IN THE CASE OF HCL KALINDEE ARSSPL, IT HAS BEEN HELD THAT DUBIOUS & FA NCIFUL CLAIMS UNDER THE GRAB OF INTERPRETATIONS, ARE A MERE PRETENSE AND NOT BON AFIDE. IT HAS ALSO BEEN HELD THAT 'BONAFIDES HAVE TO BE SHOWN & CANNOT BE ASSUME D AND MERELY BECAUSE THE ASSESSEE COMPLIES WITH THE STATUTORY PROCEDURAL REQ UIREMENT OF FILING SUCH CLAIM CANNOT ABSOLVE THE ASSESSEE OF ITS LIABILITY IF THE ACT OF ATTEMPT IN CLAIMING THE DEDUCTION WAS NOT BONAFIDE 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.4,14,253/ - IMPOSED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE I.T. ACT, 1961 WITHOU T APPRECIATING THE FACT THAT IN THE CASE OF A.M. SHAH & CO. VS. CIT [ 238 ITR 415 (GUJ) ] IT WAS HELD THAT ANY CONCEALMENT OR INACCURACY IN THE PARTICULARS OF INC OME IN THE RETURN OCCURRING AT ANY STAGE UPTO THE INCLUSIVE OF THE ULTIMATE STAGE OF WORKING OUT OF TOTAL INCOME WOULD ATTRACT THE PENALTY U/S. 271(1)(C) OF THE I.T . ACT, 1961. 6 FOR THESE AND OTHER REASONS IT IS SUBMITTED THAT THE ORDER OF THE CIT(A) MAY BE SET ASIDE AND THAT OF THE AO RESTORED.' 2. BY VIRTUE OF TWO WILLS, ONE BY FATHER AND OTHER BY GRANDMOTHER , THE ASSESSEE BECAME OWNER OF A PROPERTY VIZ. ANAND BHUV AN, DILIP GUPTE ROAD, MAHIM, MUMBAI WHICH WAS SOLD BY THE ASSESSEE ON 31/ 12/2007 FOR A CONSIDERATION OF RS.2.20 CRORES, ON WHICH LONG TERM CAPITAL GAIN WAS RETURNED AT RS.87,76,195/-. SUBSEQUENTLY, BY WAY OF REVISED RETURN LONG TERM CAPITAL GAIN WAS SHOWN AT A REDUCED AMOUNT OF RS.31,42,220/ -. WHILE CALCULATING THE . / ITA NO.7533/MUM/2013 / ASSESSMENT YEAR 2008-09 3 CAPITAL GAIN THE ASSESEE TOOK THE VALUE OF COST OF ACQUISITION AS ON 1/4/1981 AT RS.14,38,000/- AND ACCORDINGLY, AFTER CLAIMING C OST INDEXED BENEFIT, THE FINAL COST OF ACQUISITION WAS CALCULATED AT RS.79,23,380/ -. THE AO DID NOT ACCEPT SUCH CALCULATION OF THE ASSESSEE AS ACCORDING TO AO PROPERTY WAS HELD BY GRANDMOTHER WHO DIED ON 2/11/1981 AND WILL WAS DAT ED 19/5/1981 AND THEREAFTER, ON 6/1/1989 ON DEATH OF FATHER OF THE ASSESSEE AS PER WILL DATED 6/1/1989 THE ASSESSEE BECAME OWNER AND THUS, ASSES SEE CANNOT CLAIM COST OF INDEXATION BENEFIT FROM 1/4/1981. SO AO CALCULATED THE COST OF ACQUISITION IN TWO PARTS. ON THE PART INHERITED FROM GRANDMOTHER, THE COST OF ACQUISITION WAS CALCULATED AS ON 22/11/1982 AND ON THE ANOTHER PART THE COST OF INDEXATION BENEFIT WAS GIVEN W.E.F. 6/1/1989 AND IN THIS MANNE R THE COST OF ACQUISITION AS RETURNED BY THE ASSESSEE WAS REDUCED TO RS.60,95,25 4/- IN PLACE OF CLAIM OF THE ASSESSEE OF THE SAME AT RS.79,23,380/-. ON THE DIFFERENCE CONCEALMENT PENALTY HAS BEEN LEVIED. 3. THE IMPUGNED PENALTY HAS BEEN DELETED BY LD. CI T(A) ON THE GROUND THAT MERELY BECAUSE LONG TERM CAPITAL GAIN HAS BEEN REC ALCULATED, WHICH HAS RESULTED INTO THE ADDITION OF INCOME WOULD NOT AUT OMATICALLY LEAD TO LEVY OF CONCEALMENT PENALTY. THERE WAS NO FAILURE ON THE P ART OF THE ASSESSEE TO DISCLOSE FULL PARTICULARS OF HIS INCOME OR THERE W AS NO FAILURE ON THE PART OF THE ASSESSEE TO OFFER EXPLANATION. IN THIS MANNER, LD. CIT(A) HAS DELETED THE PENALTY. THE REVENUE IS AGGRIEVED, HENCE, HAS FILE D THE AFOREMENTIONED GROUNDS OF APPEAL. 4. AFTER NARRATING THE FACTS, RELYING UPON THE PENA LTY ORDER IT WAS SUBMITTED BY LD. DR THAT PENALTY HAS WRONGLY BEEN DELETED B Y LD. CIT(A) AND HIS ORDER SHOULD BE SET ASIDE AND THAT OF AO BE RESTORED. 5. ON THE OTHER HAND, LD. AR SUBMITTED THAT LD. CIT (A) DID NOT COMMIT ANY ERROR IN DELETING THE PENALTY. IT WAS SUBMITTED TH AT THE CLAIM OF THE ASSESSEE TO . / ITA NO.7533/MUM/2013 / ASSESSMENT YEAR 2008-09 4 CALCULATE LONG TERM CAPITAL GAIN IS IN ACCORDANCE W ITH THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MANJULA J. SHAH, 249 CTR 270 (MUM). THUS, IT WAS PLEADED BY LD. AR THAT PENALTY HAS RIGHTLY BEEN DELETED BY LD. CIT(A) AND HIS ORDER SHOULD BE UPHELD. 6. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. AS PER AFOREMENTIONED DECISION OF HON BLE BOMBAY HIGH COURT, WHILE COMPUTING CAPITAL GAIN ARISING ON TRANSFER OF CAPITAL ASSET ACQUIRED BY THE ASSESSEE UNDER GIFT/WILL, THE INDEXED COST OF ACQUISITION HAS TO BE COMPUTED WITH REFERENCE TO THE YEAR IN WHICH THE PR EVIOUS OWNER FIRST HELD THE ASSET AND NOT THE YEAR IN WHICH ASSESSEE BECAME OWN ER OF THE ASSET. THEREFORE, CALCULATION OF THE ASSESSEE OF LONG TERM CAPITAL GAIN WAS IN ACCORDANCE WITH THIS DECISION OF HONBLE BOMBAY HIG H COURT. THE CALCULATION DONE BY AO IS CONTRARY TO THIS DECISION OF HONBLE BOMBAY HIGH COURT. IT IS ANOTHER MATTER THAT ASSESSEE DID NOT CONTEST THE C ALCULATION DONE BY THE AO IN FURTHER APPEAL BUT THAT DOES NOT MEAN THAT THE CALC ULATION OF THE ASSESSEE WAS NOT IN ACCORDANCE WITH THE LAW. MERE ADDITION IN T HE ASSESSMENT ORDER CANNOT JUSTIFY THE LEVY OF CONCEALMENT PENALTY. THE CALCU LATION MADE BY THE AO BEING CONTRARY TO THE PROVISIONS OF LAW CANNOT BE CONSIDE RED TO BE A VALID CALCULATION FOR THE PURPOSE OF LEVY OF CONCEALMENT PENALTY, THE REFORE, WE SEE NO INFIRMITY IN THE ORDER PASSED BY LD. CIT(A) VIDE WHICH THE IMPUG NED PENALTY HAS BEEN DELETED. WE DECLINE TO INTERFERE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/05/201 5 () * + 27/05/2015 SD/- SD/- ( , / RAJENDRA) ( . . / I.P. BANSAL) / ACCOUNTANT MEMBER / JUDICIAL MEMBER ( MUMBAI; * DATED 27/05/2015 . / ITA NO.7533/MUM/2013 / ASSESSMENT YEAR 2008-09 5 ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. .! ( ) / THE CIT(A)- 4. .! / CIT 5. /0 !12 , ' 12 , ( / DR, ITAT, MUMBAI 6. 3 / GUARD FILE. / BY ORDER, /! ! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ( / ITAT, MUMBAI . . ./ VM , SR. PS