ITO, JODHPUR V. Smt. Supriya Kanwar, JODHPUR

ITA 85/JODH/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5217 (ITAT-JODHPUR)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 23-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L MOURYA
• Keywords: Capital asset; Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 85 / JODH /201 5 (ASST. YEAR : 200 7 - 0 8 ) ITO, WARD - 1( 4 ), JODHPUR . VS. SMT . SUPRIYA KANWA R, C/ O ASHAPURNA BUILDCON LTD., MAHAVEER PALACE, NEAR CIRCUIT HOUSE, DIST. JODHPUR (RAJ.) PAN NO. AIPPK 8926 N (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE . DEPARTMENT BY : S HRI S.L. MOURYA - DR DATE OF HEARING : 1 4 / 0 3 /201 6 . DATE OF PRONOUNCEMENT : 1 4 / 03 /201 6 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , JODHPUR , DATED 01 / 12 /201 4 . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED UNDER SEC. 271(1)(C) BY ACCEPTING THE DECISION OF THE ITAT IN ITA NO. 362/JODH/2010 IN ASSESSEES OWN CASE FOR A.Y.2007 - 08 AS FINAL DECISION ON THE ISSUE WHERE TRANSACTIONS OF PURCHASE AND SALE OF LAND IS IN NATURE OF TRADE IS PENDING BEFORE THE HON'BLE HIGH COURT. 2. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR LATER ANY OR ALL THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF APPEAL IS F INALLY HEARD FOR DISPOSAL. 2 ITA NO. 85/JODH/2015 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS IN THE LINE OF BUSINESS OF PURCHASE AND SALE OF LANDS AND 05 PIECES OF AGRICULTURAL LAND AT SHAHAJAHANPUR, WHICH IS MORE THAN 50 0 KM. A WAY FROM HER RESIDENCE , WHICH WERE SITUATED IN THE NCR WHERE A GLOBAL CITY WAS BEING SET UP ON NH - 8 , WERE ALSO PURCHASED WITH A VIEW TO EARN PROFIT ON S ALE OF THE SAME AND WAS CLEARLY PART OF HER ACTIVITY IN THE NATURE OF TRADE. IN FACT, IT IS ONLY WHEN THE HUGE PROFIT OF RS. 1,68,72,453/ - WAS EARNED ON SALE OF THESE 05 PIECES OF AGRICULTURAL LAND , ON WHICH THE TAX LIABILITY OF ABOUT RS. 50 LAC OR SO AROSE, SHE THOUGHT OF DEVIATING FROM HER EARLIER STAND OF DECLARING THE PROFIT EARNED FROM THE ACTIVITY OF PURCHASE AND SALE OF LAND AND DECLARED THE PROFIT EARNED FROM SALE OF THESE LAND UNDER THE HEAD AGRICULTURAL INCOME WITH A CLEAR INTENTION TO EVADE THE LEGITIMATE TAX ON THE PROFIT EARNED FROM THE BUSINESS . TO ESCAPE FROM THE LEGITIMATE TAX LIABILITY SHE HAD FURNISHED INACCURATE PARTICULARS IN THE RETURN OF INCOME FILED. HAD THE ASSESSING OFFICER NOT VIGILANT, THE ASSESSEE WOULD HAVE ESCAPED FROM THE TAX LIABILITY WITH THIS DEVISE AND WOULD HAVE CAUSED IRREPARABLE LO SS TO THE EXCHEQUER. HE , W A S THEREFORE, FULLY SATISFIED THAT THE ASSESSEE DECLARED THE INCOME EARNED FROM SALES OF THESE LAND S AS HER AGRICULTURAL INCOME , INSTEAD OF BUSINESS INCOME , WITH A VIEW TO EVADE THE LEGITIMATE TAX AND THEREFORE, HE L E VIED PENALTY UNDER SEC. 271(1)(C) OF THE ACT BEING 100% OF THE TAX SOUGHT TO BE LEVIED OF RS. 56,19,240/ - . 4 . ON APPEAL , COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE LEVY OF PENALTY ON THE GROUND THAT ON APPEAL FILED BY THE ASSESSEE, THE TRIBUNAL VIDE ITS ORDER D ATED 29/04/2014 HELD THAT THE IMPUGNED LAND WILL NOT F A LL WITHIN THE PURVIEW OF THE CAPITAL ASSET BEING LAND SITUATED BEYOND THE PRESCRIBED MUNICIPAL LIMIT AND THE SALE PROCEEDS THEREOF ARE NOT ASSESSABLE TO TAX. 3 ITA NO. 85/JODH/2015 5. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE ASSESSING OFFICER, WHEREAS NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF NOTICE OF HEARING SENT TO THE ASSESSEE. 6 . WE FIND THAT THE LEVY OF PENALTY ON THE G R OUND OF FURNISHING INACCURATE PARTICULAR OF INCOME BY THE ASSESSEE OF RS. 56,19,240/ - UNDER SEC. 271(1)(C) OF THE ACT WAS DELETED BY THE COMMISSIONER OF INCOME TAX (APPEALS) ON THE GROUND TH A T IN THE QUANTUM APPEAL FILED BY THE ASSESSEE, THE ADDITION MADE WAS DELE TED BY THE TRIBUNAL. WE FIND THAT THE HON'BLE SUPREME COURT IN THE CASE OF K.C. BUILDER S AND ANOTHER VS. ACIT ( 26 5 ITR 562) HELD AS UNDER: - WHERE THE ADDITIONS MADE IN THE ASSESSMENT ORDER ON THE BASIS OF WHICH PENALTY FOR CONCEALMENT IS LEVIED, ARE DELETED, THERE REMAINS NO BASIS AT ALL FOR LEVYING PENALTY FOR CONCEALMENT AND, THEREFORE, IN SUCH A CASE NO PENALTY CAN SURVIVE AND THE PENALTY IS LIABLE TO BE CANCELLED . ORDINARILY, PENALTY CA NNOT STAND IF THE ASSESSMENT ITSELF IS SET ASIDE. HENCE, WE FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON MONDAY , THE 1 4 TH DAY OF MARCH , 201 6 AT JODHPUR . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 1 4 TH MARCH , 201 6 . VR/ - 4 ITA NO. 85/JODH/2015 COPY TO: 1. THE ASSESS E E. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R . 6. GUARD FILE. BY ORDER .