FAKIRCHAND F SACHDEV, MUMBAI V. ACIT 12(1), MUMBAI

ITA 7709/MUM/2012

• Counselvise Citation: 770919914 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2006-2007
• Appeal Filed On: 27-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA KUMAR
• Assessee Lawyers: SHIV PRAKASH
• Keywords: Sale consideration of property below Jantri Value; Question of law
• Section: 50C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI . . , / BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND . , SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER . / ITA NO.7709/MUM/2012 / ASSESSMENT YEAR 2006-07 FAKIRCHAND F. SACHDEV, HAGUE BUILDING, 1 ST FLOOR, 9, SPROTT ROAD, BALLARD ESTATE, MUMBAI 400 001. / VS. THE ACIT 12(1), AAYKAR BHAVAN, MK ROAD, MUMBAI 400 020 ! ./ '# ./ PAN/GIR NO. : AACPS 2121G ( !$ / APPELLANT ) .. ( %&!$ / RESPONDENT ) !$ ' / APPELLANT BY: SHRI SHIV PRAKASH %&!$ ( ' / RESPONDENT BY : SHRI RAJENDRA KUMAR ( ) / DATE OF HEARING : 20/05/2014 *+ ( ) / DATE OF PRONOUNCEMENT : 20/05/2014 , / O R D E R PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DI RECTED AGAINST ORDER PASSED BY LD. CIT(A)-10, MUMBAI DATED 17/10/2012 FO R ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS FILED AMENDED GROUNDS OF APPEAL . CONCEALMENT PENALTY WHICH IS CONTESTED IN THE PRESENT APPEAL INITIALLY WAS LEVIED AT RS.4,42,923/- AND IT HAS BEEN REDUCED TO RS.1,85,400 BY WAY OF RE CTIFICATION ORDER PASSED BY THE AO WHICH IS DATED 14/1/2013 AND COPY OF WHICH I S PLACED ON OUR RECORD. THEREFORE, ACCORDING TO AMENDED GROUNDS OF APPEAL T HE ASSESSEE IN THE PRESENT . / ITA NO.1813/MUM/2012 / ASSESSMENT YEAR 2007-08 2 IS AGITATING THE SUSTENANCE OF PENALTY OF RS.1,85,4 00/- INSTEAD OF AMOUNT OF RS.4,42,923/- AGITATED IN GROUNDS OF APPEAL ORIGINA LLY FILED. THE SOLE ISSUE RAISED IN THE PRESENT APPEAL IS RELATING TO THE GRI EVANCE OF THE ASSESSEE AGAINST SUSTENANCE OF CONCEALMENT PENALTY AT RS.1,85,400/- . 3. THE FACTS LEADING TO LEVY OF CONCEALMENT PENALTY ARE THAT SALE CONSIDERATION SHOWN IN RESPECT OF A PROPERTY FOR WH ICH LONG TERM CAPITAL GAIN WAS DECLARED, THE APPARENT CONSIDERATION WAS A SUM OF RS.2,50,000/-. HOWEVER, FOR THE PURPOSE OF STAMP DUTY VALUATION TH E VALUE WAS ADOPTED AT RS.11,46,244/-. THE COST AS ON 1/4/1981 WAS TAKEN AT RS.3,70,265/- AND THUS, LONG TERM CAPITAL LOSS WAS COMPUTED BY THE AS SESSEE AT A LOSS OF RS.4,90,530/-. AS AGAINST THAT COMPUTATION OF LONG TERM CAPITAL GAIN, SUBMITTED BY THE ASSESSEE THE AO INVOKED SECTION 5 0C OF INCOME TAX ACT, 1961(THE ACT) AND COMPUTED LONG CAPITAL GAIN OF RS. 8,15,487/- AND IT IS ON THE DIFFERENCE OF LONG TERM CAPITAL GAIN RETURNED BY TH E ASSESSEE AND ASSESSED BY THE AO CONCEALMENT PENALTY HAS BEEN LEVIED. 4. AT THE OUTSET IT WAS SUBMITTED BY LD. AR THAT NO SUCH PENALTY COULD BE IMPOSED AS THERE IS NOTHING ON RECORD TO SHOW THAT ASSESSEE IN FACT HAS RECEIVED ANY AMOUNT AS CONSIDERATION OF SALE OF PRO PERTY APART FROM RS.2,50,000/-, WHICH WAS TAKEN FOR THE PURPOSE OF C OMPUTING LONG TERM CAPITAL GAIN. HE SUBMITTED THAT IN ABSENCE OF ANY MATERIAL TO SHOW THAT ANY EXTRA CONSIDERATION WAS RECEIVED BY THE ASSESSEE APART FR OM THE CONSIDERATION STATED IN THE DOCUMENTS, PENALTY LEVIED ON ADDITION MADE ON ACCOUNT OF APPLICATION OF SECTION 50C CANNOT BE SUSTAINED. FOR THIS PURPOSE LD. AR RELIED UPON THE DECISION OF HONBLE CALCUTTA HIGH COURT WHICH IS DA TED 14/05/2013 IN GA 684 OF 2013 AND ITAT NO.62 OF 2013 IN THE CASE OF CIT, CAL.4 VS. MADAN THEATRES LTD, COPY OF THIS DECISION IS PLACED ON OUR RECORD. IN THE SAID CASE THE PROPERTY WAS SOLD FOR A CONSIDERATION OF RS.2,51,50,000/-. HOWEVER, ITS VALUE WAS ESTIMATED TO RS.5,19,77,000/-. ON THE DIFFERENCE C ONCEALMENT PENALTY OF . / ITA NO.1813/MUM/2012 / ASSESSMENT YEAR 2007-08 3 RS.30,09,989/- WAS IMPOSED. THE PENALTY WAS DELET ED BY LD. CIT(A) AND THE ORDER OF LD. CIT(A) WAS CONFIRMED BY THE TRIBUNAL O N THE GROUND THAT THE ADDITION WAS MADE ON ACCOUNT OF APPLICATION OF DEEM ING PROVISIONS OF SECTION 50C. THE REVENUE DID NOT SHOW AS TO HOW THE ASSESS EE COULD BE HELD TO HAVE ACTUALLY RECEIVED THE AMOUNT OF RS.5,19,77,000/-. IT HAS ALSO NOT BEEN SHOWN AS TO WHETHER ANY CORRESPONDING ADDITION HAS BEEN M ADE IN THE HANDS OF THE BUYER AND THE ISSUE REGARDING LEVY OF PENALTY WAS C OVERED BY THE DECISION OF CO-ORDINATE BENCH IN THE CASE OF RENU HINGORANI AN D, THUS, IT WAS HELD THAT PENALTY HAS RIGHTLY BEEN DEALT BY LD. CIT(A). THEI R LORDSHIPS HAVE CONFIRMED THE ORDER OF TRIBUNAL WITH THE FOLLOWING OBSERVATIO NS: MR. NIAUMUDDIN, LEARNED ADVOCATE APPEARING FOR THE REVENUE, CONTENDED THAT THE ASSESSEE HAD A CHOICE TO DISPUTE THE VALUATION ON THE BASIS OF THE DEEMED VALUE, BUT THE ASSESSEE DID NOT TAKE THAT OPPORTUNI TY. THE ASSESSEE HAD A CHOICE OR HE COULD HAVE LITIGATED. THE FACT REMAINS THAT T HE ACTUAL AMOUNT RECEIVED WAS OFFERED FOR TAXATION. IT IS ONLY ON THE BASIS OF TH E DEEMED CONSIDERATION THAT THE PROCEEDINGS UNDER SECTION 271(C) STARTED. THE REVEN UE HAS FAILED TO PRODUCE ANY IOTA OF EVIDENCE THAT THE ASSESSEE ACTUALLY RECEIVE D ONE PAISE MORE THAN THE AMOUNT SHOWN TO HAVE BEEN RECEIVED BY HIM. WE ARE, AS SUCH, OF THE OPINION THAT THERE IS NO SCOPE TO ADMIT THE APPEAL SINCE THE SAM E DOES RAISE ANY QUESTION OF LAW, SUBSTANTIAL OR OTHERWISE. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER PASSED BY LD. CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. IN THE PRESENT CASE ALSO PENALTY HAS B EEN IMPOSED ON THE DIFFERENCE IN COMPUTATION OF LONG TERM CAPITAL GAIN ON THE BASIS OF APPLICATION OF SECTION 50C. THERE IS NO MATERIAL ON RECORD TO SHOW THAT ASSESSEE IN FACT HAS RECEIVED THE AMOUNT MENTIONED IN THE TITLE DEE D. IF IT IS SO, THE RATIO OF AFOREMENTIONED DECISION OF HONBLE CALCUTTA HIGH CO URT WILL BE APPLICABLE TO THE PRESENT CASE. THEREFORE, WE HOLD THAT IN THE F ACTS AND CIRCUMSTANCES OF THE PRESENT CASE PENALTY LEVIED UNDER SECTION 271(1)(C) CANNOT BE SUSTAINED. ACCORDINGLY, THE PENALTY IS DELETED AND THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. . / ITA NO.1813/MUM/2012 / ASSESSMENT YEAR 2007-08 4 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/05/201 4 , ( *+ - ./ 20/05/2014 + ( 0 1 SD/- SD/ - ( . / D.KARUNAKARA RAO ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; . DATED 20/05/2014 , , , , ( (( ( %)2 %)2 %)2 %)2 32 ) 32 ) 32 ) 32 ) / COPY OF THE ORDER FORWARDED TO : 1. !$ / THE APPELLANT 2. %&!$ / THE RESPONDENT. 3. 4 ( ) / THE CIT(A)- 4. 4 / CIT 5. 250 %) , , / DR, ITAT, MUMBAI 6. 0 6 / GUARD FILE. , , , , / BY ORDER, &2) %) //TRUE COPY// 7 77 7 / 8 8 8 8 ' ' ' ' (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . ./ VM , SR. PS