SHAILENDRA P. MITTAL, MUMBAI V. D.C.I.T. CEN.CIR.47, MUMBAI

ITA 7759/MUM/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1441 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 09-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 28-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B S BIST
• Assessee Lawyers: S C TIWARI; RUTUJA PAWAR
• Keywords: Capital asset; Bonafide belief
• Section: 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 7759/MUM/2012 : (A.Y : 2008 - 09) SHRI SHAILENDRA P. MITTAL 16 TH FLOOR, MITTAL TOWERS, 210, NARIMAN POINT, MUMBAI - 21 PAN : AA EPM3836G ( APPELLANT ) VS. DCIT, CC - 47, MUMBAI (RESPONDENT) ASSESSEE BY : SHRI S.C. TIWARI & MS. RUTUJA PAWAR REVENUE BY : SHRI B.S. BIST DATE OF HEARING : 19/12/2016 DATE OF PRONOUNCEMENT : 23 /12/2016 O R D E R PER P.K. BANSAL , AM : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 38, MUMBAI DATED 23.11.2012 BY TAKING THE FOLLOWING EFFECTIVE GROUND OF APPEAL : - 1. LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE DEPUTY COMMISSIONER OF INCOME - TAX IN LEVYING PENALTY OF RS.22,18,495/ - UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT, 1961 ON THE GROUND THAT THE APPELLANT HAS FILED INACCURATE PARTICULARS OF INCOME AND THEREBY CONCEALED TAXABLE CAPITAL GAIN ARISING OUT OF SALE OF LAND SITUATED AT MAHALUNGE, PUNE. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE PENALTY LEVIED OUGHT TO BE DELETED. 2 SHRI SHAILENDRA P. MITTAL ITA NO. 7759/MUM/2012 2. THE FACTS RELATING TO THIS GROUND ARE THAT THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS SUBM ITTED HIS RETURN U/S 139(1) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) SHOWING TOTAL INCOME AT RS.19,41,080/ - ON 31.7.2008. THE ASSESSEE HAD SOLD LAND DURING THE YEAR AND EARNED CAPITAL GAIN. THE ASSESSEE HAD NOT SHOWN CAPITAL GAIN ARISING ON SALE OF LAND AS INCOME AS THE AGRICULTURAL LAND SOLD BY THE ASSESSEE IS NOT AN ASSET U/S 2(14) OF THE ACT. THE ASSESSEE SUBSEQUENTLY REVISED COMPUTATION OF INCOME AND HAS DECLARED TOTAL INCOME AT RS.1,11,14,870/ - AND DEPOSITED THE DIFFERENTIAL TAX ON 20.10.201 0 WHEN THE ASSESSEE CAME TO KNOW THAT DUE TO EXPANSION OF PUNE CITY, THE SAID AGRICULTURAL LAND IN THE YEAR OF TRANSFER WAS FALLING WITHIN 8 KMS. OF MUNICIPAL LIMITS OF PUNE. THUS, THE SAID LAND LOST ITS IDENTITY AS AGRICULTURAL LAND. THE ASSESSING OFFIC ER COMPLETED THE ASSESSMENT AT RS.1,11,14,870/ - , I.E., INCOME AT WHICH THE RETURN WAS REVISED BUT INITIATED PROCEEDINGS U/S 271(1)(C) OF THE ACT BY ISSUING PENALTY NOTICE U/S 271(1)(C) OF THE ACT FOR FILING INACCURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER SUBSEQUENTLY, AFTER GIVING OPPORTUNITY AND CONSIDERING THE EXPLANATION OF ASSESSEE, LEVIED PENALTY U/S 271(1)(C) OF THE ACT BY OBSERVING AS UNDER : - 14) FROM THE ABOVE DETAILED DISCUSSION, I AM SATISFIED THAT THIS IS A FIT CASE FOR LEVY OF PENAL TY AS THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF HIS INCOME AND THEREBY CONCEALED TAXABLE CAPITAL GAINS. THE MINIMUM PENALTY LEVIABLE @ 100% OF THE TAX SOUGHT TO BE EVADED WORKS OUT TO RS.22,18,495/ - . 3 SHRI SHAILENDRA P. MITTAL ITA NO. 7759/MUM/2012 THE MAXIMUM PENALTY LEVIABLE @ 300% OF THE TAX SOUGHT TO BE EVADED WORKS OUT TO RS.66,55,485/ - . BASED ON THE CIRCUMSTANCES OF THE CASE, SINCE THE ASSESSEE HAS AGREED TO PAY THE TAX, THOUGH AT THE END, THE MINIMUM PENALTY IS LEVIED AND THE ASSESSEE IS HEREBY DIRECTED TO PAY RS.22,18,495/ - . 3. WHEN THE MATTER WENT BEFORE THE CIT(A), CIT(A) CONFIRMED THE ORDER OF ASSESSING OFFICER. 4. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONGWITH THE ORDER OF TAX AUTHORITIES BELOW. WE NOTED THAT THE ISSUE INVOLVED IN THIS APPEAL IS DULY COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL IN ITA NO. 418/MUM/2013 DATED 11.4.2014 IN WHICH THIS TRIBUNAL IN THE CASE OF SMT. GEETADEVI MITTAL FOR IDENTICAL REASONS DELETED THE PENALTY BY OBSERVING AS UNDER : - THE DECISION RELIED UPON BY THE LD. DR ARE BASED ON THE FACT THAT THE AMOUNTS SURRENDERED BY THE ASSESSEE WAS IN VIEW OF THE DETECTION MADE BY THE AO AND THEREFORE, THE DECISIONS ARE NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE. IN THE CASE OF CIT VS. MAK DATA (SUPRA) THE HONBLE DELHI HIGH COURT HAS NOTE THE FACT THAT THERE WAS ABSOLUTELY NO EXPLANATION FROM THE ASSESSEE IN RESPECT OF THE AMOUNT SURRENDERED. ONLY WHEN THE AO CALLED UPON THE ASSESSEE TO PRODUCE THE EVIDENCE TO THE NATURE OF THE SOUR CE OF AMOUNT RECEIVED AS SHARE CAPITAL, THE CREDITWORTHINESS OF THE APPLICANTS AND GENUINENESS OF THE TRANSACTIONS THE ASSESSEE SIMPLY FOLDED UP AND SURRENDERED THE SUM. THUS IT IS CLEAR THAT IN THE SAID CASE THE ASSESSEE SURREND E RED THE INCOME WHEN THE AO HAS CONCERNED THE ASSESSEE AND ASKED TO EXPLAIN THE SOURCE, GENUINENESS AND CREDITWORTHINESS OF THE APPLICANT. SIMILARLY, IN THE CASE OF CIT VS. BANSAL ABUSHAN BHANDAR, THE ASSESSEE OFFERED THE UNDISCLOSED INCOME ON BEING CORNERED BY THE DEPARTMENT 4 SHRI SHAILENDRA P. MITTAL ITA NO. 7759/MUM/2012 AND IT WAS FOUND THAT THERE WAS A DELIBERATE ACT OF CONCEALMENT OF INCOME BY THE ASSESSEE. IN THE CASE OF ACIT VS. SMT. MYTHILE (SUPRA), THE TRIBUNAL HAS NOTED THE FACT THAT THE ASSESSEE DID NOT FILED THE RETURN OF INCOME WITHIN TWO YEARS FROM THE END OF THE REL EVANT ASSESSMENT YEAR AS ALLOWED U/S.153(1). AS IT I S CLEAR FROM THE FACTS OF THESE DECISIONS RELIED UPON BY THE LD. DR THAT IN ALL CASES THAT ASSESSEE SURRENDERED THE AMOUNT ONLY WHEN IT WAS DETECTED OR THE INQUIRY WAS MADE BY THE AO IN RESPECT OF A PARTI CULAR CLAIM OF THE ASSESSEE. WHEREAS IN THE CASE OF THE ASSESSEE THERE WAS NO SUCH DETECTION OF CAPITAL GAIN OR ANY INQUIRY MADE BY THE AO WITH RESPECT TO CAPITAL GAIN IN QUESTION. THE ASSESSEE OFFERED THE CAPITAL GAIN PRIOR TO ANY SUCH DETECTION BY THE DE PARTMENT AND EVEN PRIOR TO THE COMPLETION OF ENQUIRY IN THE ASSESSMENT PROCEEDINGS. THEREFORE, THIS ACT AND CONDUCT OF THE ASSESSEE CANNOT BE TERMED AS OFFERING THE INCOME DUE TO APPREHENSION OR BEING CONCERNED BY THE REVENUE. IT IS NOT THE CASE OF DISALLO WANCE OF ANY CLAIM, THEREFORE, THE QUESTION OF BOGUS OR ABSOLUTE INCORRECT CLAIM OF THE ASSESSEE DOES NOT ARISE. WE FIND THAT IN THE PECULIAR FACTS OF THE PRESENT CASE WHERE THE LAND IN QUESTION IS AN AGRICULTURAL LAND AND IT REMAINED AS AN AGRICULTURAL LA ND BUT FOR THE PURPOSE OF INCOME TAX AND DUE TO THE EXPANSION OF THE MUNICIPAL LIMIT OF CITY OF PUNE IT IS EXCLUDED FROM THE EXCLUSION CLAUSE OF SECTION 2(14)(III). THEREFORE, THE EXPLANATION OF THE ASSESSEE THAT SHE WAS UNDER BONAFIDE BELIEF THAT THE CAP I TAL GAIN ARISING FROM THE SALE OF AGRICULTURAL LAND IS NOT T AXABLE AT THE TIME OF FILING OF THE ORIGINAL RETURN IS A BONAFIDE EXPLANATION AND, THEREFORE, DOES NOT FALL UNDER THE EXPLANATION TO SECTION 271(1)(C). SINCE THE ASSESSMENT YEAR UNDER CONSIDERATIO N DOES NOT FALL UNDER THE YEAR IMMEDIATELY PRECEDING TO THE ASSESSMENT YEAR IN WHICH SEARCH WAS CONDUCTED AND, THEREFORE, REFERENCE MADE BY THE AO TO THE RETURN FILED U/S.153A IS NOT RELEVANT. IN VIEW OF THE ABOVE DISCUSSION AS WELL AS CIRCUMSTANCES OF THE CASE, WE DELETED THE PENALTY U/S.271(1)(C). SIMILARLY, THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT WAS ALSO DELETED BY THIS TRIBUNAL IN ITA NO. 442/MUM/2013 IN THE CASE OF SMT. SITADEVI MITTAL VIDE ORDER DATED 3.6.2015, COPY OF WHICH WAS ALSO PLACED BE FORE US FROM PAGE 59 TO 64. IT IS NOTED THAT THE FACTS INVOLVED IN THE CASE OF 5 SHRI SHAILENDRA P. MITTAL ITA NO. 7759/MUM/2012 ASSESSEE ARE SIMILAR TO THE FACTS INVOLVED IN THE CASE OF SMT. GEETADEVI MITTAL AS WELL AS SMT. SITADEVI MITTAL. IN THE IMPUGNED CASE ALSO, ASSESSEE HAS VOLUNTARILY FILED REVI SED COMPUTATION OF INCOME. THOUGH THE ASSESSING OFFICER MADE A REFERENCE TO THE INQUIRIES CONDUCTED BY THE PUNE INCOME TAX AUTHORITIES, IT IS NOT MADE CLEAR AS TO HOW IT HAD PROMPTED THE ASSESSEE TO FURNISH REVISED COMPUTATION OF INCOME AS IN THE ASSESSME NT ORDER T HERE IS NO MENTION ABOUT THE INQUIRY. THE ASSESSING OFFICER HAS MENTIONED ABOUT INQUIRY ONLY IN THE PENALTY ORDER. THE ASSESSEE HAS DULY DISCLOSED THE SALE OF AGRICULTURAL LAND IN THE ORIGINAL RETURN OF INCOME AND AS ALSO STATED THAT IT DOES NO T FALL IN THE DEFINITION OF CAPITAL ASSET MEANING THEREBY THAT ASSESSEE WAS UNDER BONA FIDE BELIEF IN THE MATTER. SINCE THE FACTS AND CIRCUMSTANCES OF THE ISSUE UNDER CONSIDERATION ARE IDENTICAL WITH THE CASE OF SMT. GEETADEVI MITTAL AND SMT. SITADEVI MIT TAL (REFERRED SUPRA), WE SET ASIDE THE ORDER OF CIT(A) , AND ON THE BASIS OF THE AFORESAID IDENTICAL REASONING GIVEN IN THE CASE OF SMT. GEETADEVI MITTAL AND SMT. SITADEVI MITTAL, WE DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. 5. IN THE RESULT, APP EAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 3 R D DECEMBER, 2016. SD/ - SD/ - (PAWAN SINGH) JUDICIAL MEMBER ( P.K. BANSAL ) ACCOUNTANT MEMBER MUMBAI, DATE : 2 3 R D DECEMBER, 2016 * SSL * 6 SHRI SHAILENDRA P. MITTAL ITA NO. 7759/MUM/2012 COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, E BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI