Shri Mukesh B.Shah, Ahmedabad V. The Income tax Officer,Ward-14(4), Ahmedabad

ITA 798/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1699 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-05-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 10-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA.NO.798/AHD/2012 /BLOCK ASSTT. YEAR: 2008-2009 SHRI MUKESH B. SHAH M/267/3200, SUNDERVAN APT., SOLA ROAD AHMEDABAD 380 063. PAN : AHJPS 6892 A VS THE ITO, WARD-14(4) AHMEDABAD. %& / (APPELLANT) '( %& / (RESPONDENT) ASSESSEE BY : SHRI TUSHAR P. HEMANI REVENUE BY : SHRI JAMESH KURIAN, SR.DR / DATE OF HEARING : 04/05/2016 / DATE OF PRONOUNCEMENT: 05/05/2016 )*/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LD.COMMISSIONER INCOME-TAX (APPEALS)-XXI, AHMEDABAD DATED 15.2.2012 PASSED FOR THE ASSTT.YEAR 2008-09. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THELD .CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.4,42,920/- IMPOSED UND ER SECTION 271(1)(C) OF THE INCOME TAX ACT. ITA NO.798/AHD/2012 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WA S SERVING IN M/S.FRIENDS CULTURE GROUP. HE HAS FILED RETURN OF INCOME ON 29 .7.2008 DECLARING TOTAL INCOME AT RS.1,40,029/-. THE INCOME INCLUDES SALAR Y INCOME, SHORT TERM CAPITAL GAIN INCOME AND INCOME FROM OTHER SOURCES. THE ASSESSEE HAD INHERITED 30% SHARES IN A BUNGALOW OWNED BY SMT.SAV ITABEN SHAH. THIS SHARES DEVOLVED UPON THE ASSESSEE BY VIRTUE OF WILL EXECUTED BY LATE SMT.SAVITABEN SHAH. THIS PROPERTY WAS SOLD AND ASS ESSEE HAS RECEIVED RS.19.50 LAKHS. THE ASSESSEE DID NOT INCLUDE THE C APITAL GAIN ON SALE OF THIS PROPERTY IN THE RETURN OF INCOME. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, WHEN THE AO HAS CONFRONTED THE ASSESSE E WITH REGARD TO THIS ISSUE, THE ASSESSEE HAS DECLARED LONG TERM CAPITAL GAIN. ACCORDINGLY, TAXABLE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.20,90,0 30/-. PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WERE INITIATED. 4. IN RESPONSE TO THE SHOW CAUSE NOTICE RECEIVED UN DER SECTION 271(1)(C) R.W. SECTION 274 OF THE INCOME TAX ACT, THE ASSESSE E HAS CONTENDED THAT HE WAS UNDER A BONA FIDE BELIEF THAT HE HAS INHERITED THE PROPERTY UNDER TH E WILL, AND THEREFORE, NO CAPITAL GAIN TAX IS LEVIABLE UPON THE ASSESSEE. IT WAS A BONA FIDE MISTAKE AT THE END OF THE ASSESSEE WHILE FILING TH E RETURN. THE LD.AO WAS NOT SATISFIED WITH THIS EXPLANATION OF THE ASSESSEE . HE IMPOSED PENALTY OF RS.4,42,920/-. 5. APPEAL TO THE LD.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD CAREFULLY. TO OUR MIND CONFUSION OPERATED IN THE MIND OF THE ASSE SSEE WAS A POSSIBLE SITUATION, VIZ., IF THE ASSESSEE HAD INHERITED THE SHARE IN THE BUNGALOW BY ITA NO.798/AHD/2012 3 VIRTUE OF THE WILL OF LATE SMT.SAVITABEN SHAH AND B UNGALOW WAS NOT SOLD DURING THE YEAR, THEN, NO CAPITAL GAIN TAX WOULD BE LEVIABLE. THE SHARE OF THE ASSESSEE IN THE VALUE OF THE BUNGALOW WAS FIXED AT 30%. HE RECEIVED THE CONSIDERATION ON SALE OF BUNGALOW. IN OTHER WORDS, THE TRANSFER OF THE BUNGALOW HAS TAKEN PLACE SUBSEQUENT TO THE EXECUTIO N OF THE WILL, AND THIS GIVES RISE TO THE CONFUSION IN THE MIND OF THE ASSE SSEE. IN OTHER WORDS, IF THE ASSESSEE WAS GIVEN POSSESSION OF 30% SHARES IN THE BUNGALOW, NO CAPITAL GAIN TAX WOULD BE IMPOSABLE ON THE ASSESSEE. IF WE TAKE IT IN DIFFERENT WAY ALSO VIZ., THE BUNGALOW WAS SOLD BY SMT.SAVITABEN SHAH, THEN, OUT OF THE SALE PROCEEDS, 30% WAS GIVEN TO THE ASSESSEE, THEN AGAIN NO CAPITAL GAIN TAX WOULD BE LEVIABLE IN HIS HAND. IT WILL BE LEVIABLE IN TH E HANDS OF SMT.SAVITABEN SHAH. UNDER THIS IMPRESSION, HE DID NOT INCLUDE TH E CAPITAL GAIN ARISING OUT OF THE SALE OF THE BUNGALOW. TO OUR MIND, IT IS A POS SIBLE HUMAN ERROR AT THE END OF THE LAYMAN, WHO HAS ONLY SOURCE OF INCOME FROM S ALARY IN A PRIVATE JOB. THEREFORE, WE ALLOW THE APPEAL OF THE ASSESSEE AND DELETE PENALTY. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 5 TH MAY, 2016 AT AHMEDABAD. SD/- SD/- ( MANISH BORAD ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 05/05/2016