Smt. Surinder Kaur, Ludhiana V. ACIT, Ludhiana

ITA 767/CHANDI/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9935 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 25-05-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 14-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Bonafide belief; Cost of acquisition; Difference of opinion

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.767/CHD/2015 (ASSESSMENT YEAR : 2004-05) SMT.SURINDER KAUR, VS. THE A.C.I.T., C/O M/S BIRDI CYCLE INDUSTRIES, CIRCLE-1, B-9, FOCAL POINT, LUDHIANA. LUDHIANA. PAN: ACYPK 5964 H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMAR RESPONDENT BY : SHRI S.K. MITTAL, DR DATE OF HEARING : 25.05.2016 DATE OF PRONOUNCEMENT : 06.06.2016 O R D E R PER RANO JAIN, A.M . : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, LUDHIANA DATED 27.7.2015, RELATING TO ASSESSMENT YEAR 2004-05. 2. THE ONLY ISSUE IN THIS APPEAL IS PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN S HORT THE ACT), LEVIED BY THE ASSESSING OFFICER AMOUNTI NG TO RS.49,421/- ON ACCOUNT OF DISALLOWANCE OF AN AMOUNT OF RS.1,49,760/- MADE BY THE ASSESSING OFFICER OU T OF THE 2 COST OF ACQUISITION DECLARED BY THE ASSESSEE, WHILE COMPUTING SHORT TERM CAPITAL GAIN ON SALE OF PLOT, DECLARED BY ASSESSEE. 3. BRIEFLY, THE FACTS ARE THAT THE SHORT TERM CAPI TAL GAIN ON SALE OF PLOT WAS DECLARED BY THE ASSESSEE A T RS.10,95,240/-. THE ASSESSING OFFICER DISALLOWED A N AMOUNT OF RS.1,49,760/- ADDED BY THE ASSESSEE IN IT S COST OF ACQUISITION, WHICH WAS PAID TO PUDA ON ACCOUNT O F NON- CONSTRUCTION CHARGES. THE ASSESSING OFFICER TREATE D THE SAME AS PENAL IN NATURE AND HENCE INADMISSIBLE. TH E CIT (APPEALS) CONFIRMED THE ADDITION AND THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT B EING 100% OF THE TAX SOUGHT TO BE EVADED. 4. BEFORE THE CIT (APPEALS), THE ASSESSEE CONTENDE D THAT THE ADDITION WAS ONLY ON ACCOUNT OF DIFFERENCE OF OPINION BETWEEN THE ASSESSEE AND THE ASSESSING OFFI CER. THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT THE SAI D PAYMENT IS A PART OF COST OF ACQUISITION. RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETPROPRODUCTS LTD. (2010 ) 322 ITR 158 (SC). THE CIT (APPEALS) DID NOT FIND HIMSE LF IN AGREEMENT WITH THE SUBMISSIONS OF THE ASSESSEE AND CONFIRMED THE PENALTY. 5. AGGRIEVED BY THIS, THE ASSESSEE HAS COME UP IN APPEAL BEFORE US. 3 6. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES, WHILE THE LEARNED D.R. RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHO RITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECO RD. THE ONLY ISSUE IS WITH REGARD PENALTY UNDER SECTION 271(1)(C) OF THE ACT BY THE ASSESSING OFFICER ON AD DITION MADE ON ACCOUNT OF NON-CONSTRUCTION CHARGES PAID BY THE ASSESSEE TO PUDA, WHICH WAS CONSIDERED BY THE ASSES SEE AS A PART OF ITS COST OF ACQUISITION. WE OBSERVE T HAT THIS IS NOT A CASE WHERE THE ASSESSEE HAS CONCEALED ANY INCOME OR FURNISHED ANY PARTICULAR OF INCOME. IN F ACT, ALL THE FACTS AND FIGURES ARE CAPTURED BY THE ASSESSING OFFICER FROM THE INFORMATION SUPPLIED BY THE ASSESSEE ONLY. THIS IS A CASE WHERE THE ADDITION WAS MADE ON ACCOUNT OF DIFFERENCE OF OPINION. THE ASSESSEE WAS UNDER A BO NAFIDE BELIEF THAT THE IMPUGNED AMOUNT WAS A PART OF ITS C OST OF ACQUISITION. CERTAINLY, THIS IS A CASE OF ADDITION TO BE MADE IN QUANTUM PROCEEDINGS, BUT NOT FOR LEVYING PE NALTY UNDER SECTION 271(1)(C) OF THE ACT. THE FACT THAT THE ASSESSING OFFICER DISALLOWED THE AMOUNT HOLDING THE SAME TO BE PENAL IN NATURE IS OF NO RELEVANCE. WE HEREB Y DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY ON THIS COUNT. 4 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF JUNE, 2016. SD/- SD/- (H.L.KARWA) (RANO JAIN) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 6 TH JUNE, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE D R. ASSISTANT REGISTRAR, ITAT, CHANDIGARH