Subhaben Trilokbhai Parikh, Ahmedabad V. The Income tax Officer,Ward-2(2), Ahmedabad

ITA 831/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80218 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-07-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 16-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: J M SHAH
• Keywords: Earning of tax free income
• Section: 143(3); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI KUL BHARA T, J.M.) I.T. A. NO. 831 /AHD/2011 (ASSESSMENT YEAR: 2007-08) SMT. SUDHABEN T. PARIKH C/O. M/S. PARIKH ZALA PRAKASHAN, 617, TANKSHAL KALUPUR AHMEDABAD V/S THE ITO WARD-2(2), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AHWPP7984R APPELLANT BY : SHRI J.M. SHAH A.R. RESPONDENT BY : SHRI DINESH SINGH, SR. D.R. ( )/ ORDER DATE OF HEARING : 24-07-2014 DATE OF PRONOUNCEMENT : 05-08-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF CIT(A)-XVI, AHMEDABAD DATED 17.02.2011 FOR A.Y. 2007-08. 2. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS AN INDIVIDUAL STATED TO BE DERIVING INC OME FROM SALARY, HOUSE PROPERTY, CAPITAL GAINS AND OTHER SOURCES. AS SESSEE FILED HER RETURN OF INCOME FOR A.Y. 07-08 ON 31.08.2007 DECLA RING TOTAL INCOME AT ITA NO 831/ AHD/2011 . A.Y. 2007- 08 2 RS. 6,67,204/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S. 143(3) VIDE ORDER DATED 16.11.2009 AND THE TOTAL INCOME WAS DETERMINED AT RS. 8,01,510/-. DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE FILED REVISED RETU RN OF INCOME ON 30.03.2009 DECLARING TAXABLE INCOME OF RS. 6,66,620 /- BY REVISING THE SHORT TERM CAPITAL GAINS. A.O NOTICED THAT ASSESSEE HAD MADE EXCESSIVE CLAIM OF EXEMPT INCOME UNDER THE HEAD PROFIT FROM S ALE OF AGRICULTURAL LAND AMOUNTING TO RS. 1,34,890/- WHICH WAS PURCHASE D ON 09.01.2004 BUT WAS SHOWN BY ASSESSEE TO HAVE BEEN ON 09.01.2000 AN D ACCORDINGLY THE CAPITAL GAIN WAS CONSIDERED AS LONG TERM AND EXEMPT . A.O AFTER TAKING INTO CONSIDERATION THE CORRECT PURCHASE DATE (I.E. 09.01.2004) CONSIDERED THE PROFIT FROM SALE OF THE TRANSACTION AS SHORT TE RM CAPITAL GAINS. ON THE AFORESAID ADJUSTMENT TO THE CAPITAL GAIN MADE BY TH E A.O, A.O VIDE PENALTY ORDER DATED 11.05.2010 LEVIED PENALTY OF RS . 60,000/-. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATER BEF ORE CIT(A). CIT(A) VIDE ORDER DATED 17,02.2011 DISMISSED THE APPEAL OF THE ASSESSEE BY HOLDING AS UNDER:- 4. I HAVE CONSIDERED THE SUBMISSION MADE BY THE APP ELLANT AND OBSERVATION OF THE AO. THE ASSESSEE HAD CLEARLY FURNISHED INACCURATE PARTICULARS OF INC OME. IT IS NOT AN ISSUE OF SIMPLY WRONG DATE BEING MENTIONED BY THE ACCOUNTANT. EVERY ASSESSEE BY AND LARGE KNOWS HOW OLD THE PROPERTY IS. A PROPERLY WHICH IS LESS THAN 2.5 YEARS OLD CANNOT BE FORGOTTE N BY THE ASSESSEE. THEREFORE CLAIMING OF LONG TERM CAPITAL GAIN IS CLEARLY FURNISHING OF INACCURATE PA RTICULARS THEREBY CONCEALING THE INCOME. IN VIEW OF THE ABOVE, I AGREE WITH THE AO THAT THE ASSESSEE HA D FURNISHED INACCURATE PARTICULARS OF INCOME THEREBY CONCEALING THE INCOME. THE PENALTY LEVIED I S THEREFORE CONFIRMED AND THE GROUND OF APPEAL IS DISMISSED. 4. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS NOW I N APPEAL BEFORE US. 5. BEFORE US, LD. A.R. SUBMITTED THAT DURING THE COURS E OF ASSESSMENT PROCEEDINGS, ASSESSEE NOTICED THAT DUE TO THE INADV ERTENCE OF THE ITA NO 831/ AHD/2011 . A.Y. 2007- 08 3 ACCOUNTANT, THE PURCHASE DATE OF LAND AT KOLAT WAS MENTIONED AS 09.01.2000 INSTEAD OF THE CORRECT DATE BEING 09.1.2 004. HE THEREFORE SUBMITTED THAT IMMEDIATELY ON NOTICING THE MISTAKE, ASSESSEE VOLUNTARILY DISCLOSED THE GAIN AS SHORT TERM CAPITAL GAIN AND R EVISED INCOME. HE THEREFORE SUBMITTED THAT ASSESSEE HAS NOT CONCEALED ANY PARTICULARS OF INCOME NOR HAD FILED ANY INACCURATE PARTICULARS. HE FURTHER SUBMITTED THAT IT IS NOT A CASE WHERE THE REVENUE HAS DETECTED THE CONCEALMENT OR THE EXPLANATION SUBMITTED BY THE ASSESSEE WAS FALSE. HE THEREFORE SUBMITTED THAT THE PENALTY LEVIED U/S. 271(1)(C) BE DELETED. HE ALSO PLACED RELIANCE ON THE DECISION IN THE CASE OF BHAGYODAYA GROUP CO- OP. COTTON SALE GINNING AND PRESS SOCIETY LTD. VS. ACIT (2010) 127 TTJ (AHD) (UO1). THE LD. D.R. ON THE OTHER HAND RELIED ON THE ORDER OF A.O AND CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE HAD REVISED THE CALCULATION OF CAPITAL GAI NS ON ACCOUNT OF WRONG CONSIDERATION OF THE DATE OF PURCHASE. IT IS ALSO A FACT THAT THE CORRECTION POSITION ABOUT THE CAPITAL GAIN WAS BROUGHT TO THE NOTICE OF THE A.O BY THE ASSESSEE. THERE IS NOTHING ON RECORD TO DEMONST RATE THAT THE REVENUE HAD DETECTED CONCEALMENT ON ACCOUNT OF WRONG MENTIO NING OF THE DATE. 7. THE PENALTY UNDER SECTION. 271(L)(C) OF THE ACT IS LEVIABLE IF THE AO IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS UNDER TH E ACT THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURN ISHED INACCURATE PARTICULARS OF SUCH INCOME. ITA NO 831/ AHD/2011 . A.Y. 2007- 08 4 8. THE NECESSARY INGREDIENTS FOR ATTRACTING EXPLN. 1 T O SECTION. 271(L)(C) ARE THAT (I) THE PERSON FAILS TO OFFER THE EXPLANATION, OR (II) HE OFFERS THE EXPLANATION WHICH IS FOUND BY THE AO OR THE CIT(A) OR THE CIT TO BE FALSE, OR (III) THE PERSON OFFERS EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATI ON IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME HAVE BEEN DISCLO SED BY HIM. IF THE CASE OF ANY ASSESSEE FALLS IN ANY OF THESE THREE CATEGOR IES, THEN ACCORDING TO THE DEEMING PROVISION PROVIDED IN EXPLN. 1 TO SECTI ON. 271(L)(C) THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL I NCOME SHALL BE CONSIDERED AS THE INCOME IN RESPECT OF WHICH PARTIC ULARS HAVE BEEN CONCEALED, FOR THE PURPOSES OF CLAUSE. (C) OF S. 27 1(1), AND THE PENALTY FOLLOWS. ON THE OTHER HAND, IF THE ASSESSEE IS ABLE TO OFFER AN EXPLANATION, WHICH IS NOT FOUND BY THE AUTHORITIES TO BE FALSE, AND ASSESSEE HAS BEEN ABLE TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AN D THAT ALL THE FACTS RELATING TO THE SAME HAVE BEEN DISCLOSED BY HIM, TH EN IN THAT CASE PENALTY SHALL NOT BE IMPOSED. 9. IN THE PRESENT CASE THE ASSESSEE HAD DURING THE COU RSE OF ASSESSMENT PROCEEDINGS REVISED THE RETURN OF INCOME AND THE SA ME WAS ACCEPTED BY THE A.O. BEFORE US, NO MATERIAL HAS BEEN BROUGHT ON RECORD TO DEMONSTRATE THAT THE SUBMISSIONS OF THE ASSESSEE WE RE FALSE. WHEN THE ASSESSEE HAS FURNISHED ALL THE MATERIAL FACTS RELEV ANT THERETO, THE DISALLOWANCE OF SUCH CLAIM CANNOT AUTOMATICALLY LEA D TO THE CONCLUSION THAT THERE WAS CONCEALMENT OF PARTICULARS OF HIS IN COME BY THE ASSESSEE OR FURNISHING INACCURATE PARTICULARS THEREOF. WHAT IS TO BE SEEN IS WHETHER THE SAID CLAIM MADE BY THE ASSESSEE WAS BONA FIDE A ND WHETHER ALL THE MATERIAL FACTS RELEVANT THERETO HAVE BEEN FURNISHED AND ONCE IT IS SO ITA NO 831/ AHD/2011 . A.Y. 2007- 08 5 ESTABLISHED, THE ASSESSEE CANNOT BE HELD LIABLE FOR CONCEALMENT PENALTY UNDER S. 271(1) (C) OF THE ACT. IN THE PRESENT CASE SINCE ALL THE NECESSARY FACTS WERE FURNISHED, WE ARE OF THE VIEW THAT SIMPL Y BECAUSE THE ADDITION HAS BEEN MADE IT DOES NOT CALL FOR LEVY OF PENALTY UNDER S. 271(L)(C). WE THUS CANCEL THE PENALTY LEVIED BY THE AO. THEREFORE , THIS GROUND OF ASSESSEE IS ALLOWED. 10. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 05 -08 - 2014. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,A HMEDABAD