ACIT, Mohali V. Gaurav Raghu, Mohali

ITA 855/CHANDI/2014

• Counselvise Citation: 85521514 RSA 2014
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 10-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: TEJ MOHAN SINGH
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.855/CHD/2014 (ASSESSMENT YEAR : 2008-09) THE A.C.I.T., VS. GAURAV RAGHU, CIRCLE 6(1), S/O SH.D.S.RAGHU, MOHALI. VILLAGE SIALBA MAJRI, MOHALI. PAN: AIDPR2981E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. MITTAL RESPONDENT BY : SHRI TEJ MOHAN SINGH DATE OF HEARING : 29.09.2015 DATE OF PRONOUNCEMENT : 05.10.2015 O R D E R PER RANO JAIN, A.M . : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), CHANDIGARH DATED 26.8.2014 FOR ASSESSMEN T YEAR 2008-09, WHEREBY HE HAS DELETED THE PENALTY AMOUNTING TO RS.29,05,295/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX A CT, 1961 (IN SHORT THE ACT). 2 2. BRIEFLY THE FACTS OF THE CASE ARE THAT, AS PER THE INFORMATION AVAILABLE WITH THE DEPARTMENT, A HOUSIN G SOCIETY, NAMED AS THE DEFENCE SERVICES COOPERATIVE HOUSE BUI LDING SOCIETY LTD. MOHALI CONSISTING OF 207 MEMBERS WAS F ORMED, WHICH WAS THE OWNER OF 27.3 ACRES OF LAND IN VILLAG E KANSAL, DISTRICT MOHALI. THIS SOCIETY ENTERED INTO A TRIPA RTITE JOINT DEVELOPMENT AGREEMENT ON 27.4.2007 WITH M/S HASH BU ILDERS (PVT.) LTD., CHANDIGARH AND M/S TATA HOUSING DEVELO PMENT COMPANY LTD., MUMBAI BY VIRTUE OF WHICH THE SOCIETY WOULD TRANSFER ITS LAND FOR DEVELOPMENT IN LIEU OF MONETA RY CONSIDERATION AND ALSO CONSIDERATION IN KIND TO THE MEMBERS OF THE SOCIETY. THE ASSESSEE WAS ALSO A MEMBER OF THE SAID SOCIETY OWNING 250 SQ. YARDS LAND. THE TOTAL CONSID ERATION WAS SETTLED AT RS. 34,00,000/- PLUS ALLOTMENT OF ON E FLAT OF 1350 SQ. FEET TO THE ASSESSEE, OUT OF WHICH THE ASS ESSEE HAD RECEIVED RS.13,60,000/-. THE ASSESSEE HAD NOT DECLA RED INCOME FROM CAPITAL GAINS EARNED FROM TRANSFER OF L AND AND INCOME TO THAT EXTENT HAVING BEEN HELD AS ESCAPED A SSESSMENT WITHIN THE MEANING OF SECTION 147 OF INCOME TAX ACT , 1961 (IN SHORT THE ACT), THE PROCEEDING UNDER SECTION 147 OF INCOME TAX ACT, 1961 WERE INITIATED AGAINST THE ASSESSEE. 3. THE ASSESSMENT IN THIS CASE WAS COMPLETED UNDER SECTION 143(3)/147 OF THE ACT, ON 16.12.2010 AND TH E INCOME WAS ASSESSED AT RS.87,17,500/- BY TAKING ENTIRE CON SIDERATION COMPRISING OF CASH AMOUNT RECEIVABLE AND THE VALUE OF LAND. THE VALUE OF THE FLAT WAS TAKEN AT RS.4500/- PER SQ .FT., WHICH 3 WAS DERIVED FROM THE AGREEMENT DATED 24.2.2007 MADE BETWEEN HASH AND THDC. THE SHORT TERM CAPITAL GAIN WAS DETERMINED AT RS.86,15,000/-. ACCORDINGLY, ADDITIO N OF RS.86,15,000/- WAS MADE BY THE ASSESSING OFFICER. THE ORDER OF THE ASSESSING OFFICER WAS CONFIRMED BY THE LEARN ED CIT (APPEALS) AND PENALTY PROCEEDINGS UNDER SECTION 271 (1)(C) OF THE ACT WERE INITIATED BY THE ASSESSING OFFICER. T HE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF T HE ACT STATING THAT THE ASSESSEE HAD COMMITTED DEFAULT FOR CONCEALMENT OF PARTICULARS OF INCOME AND FOR FURNIS HING INACCURATE PARTICULARS OF INCOME TO THE TUNE OF RS. 86,15,000/-. PENALTY AMOUNTING TO RS.29,05,295/- WAS LEVIED BY T HE ASSESSING OFFICER BEING 100% TAX SOUGHT TO BE EVADE D. 4. THE ASSESSEE WENT IN APPEAL BEFORE THE LEARNED CIT (APPEALS) AGAINST THE ORDER OF THE ASSESSING OFFICE R LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE LE ARNED CIT (APPEALS) DELETED THE PENALTY STATING THAT THE ASSE SSEE HAD DISCLOSED ALL THE MATERIAL FACTS RELATING TO THE RE CEIPT OF MONEY ON SALE OF PLOT AND WAS UNDER THE IMPRESSION THAT THE AMOUNT RECEIVED WAS ADVANCE MONEY ON SALE OF PLOT A ND CAPITAL GAINS TAX WAS NOT LEVIABLE ON THIS AMOUNT. THE LEARNED CIT (APPEALS) WAS FURTHER OF THE VIEW THAT THE ASSESSEE HAVING DISCLOSED ALL MATERIAL FACTS WHICH WERE REQUIRED TO COMPUTE THE CORRECT CAPITAL GAINS ESTAB LISHES HER BONAFIDE CREDENTIALS. IN VIEW OF THESE, PENALTY W AS DELETED BY THE LEARNED CIT (APPEALS). 4 5. AGGRIEVED BY THE SAID ORDER OF THE LEARNED CIT (APPEALS), THE DEPARTMENT HAS COME UP IN APPEAL BEF ORE US. 6. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSE SSEE STATED THAT THE ADDITION AMOUNTING TO RS.86,15,000/ - MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT (APPEALS) WAS CHALLENGED BY THE ASSESSEE BEFORE THE I.T.A.T. THE I.T.A.T. CONFIRMED THE ORDER OF THE LEARNED CIT (APPEALS), WHICH WAS AGAIN CHALLENGED BY THE ASSESSEE BEFORE T HE HON'BLE PUNJAB & HARYANA HIGH COURT. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN ITA NO.286 OF 2013 (O&M) DATED 22.7.2 015 REFERRING TO THE JUDGMENT IN THE CASE OF C.S.ATWAL VS. CIT, LUDHIANA & ANOTHER IN ITA NO.200 OF 2013 DELETED TH E ADDITION MADE BY THE ASSESSING OFFICER AND FURTHER CONFIRMED BY THE LEARNED CIT (APPEALS) AND I.T.A.T. IN VIEW OF THE FACT THAT THE QUANTUM ON THE BASIS OF WHICH PENALTY WAS LEVIED HAS BEEN DELETED BY THE HON'BLE HIGH COURT, IT WAS SUBM ITTED THAT THE QUESTION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT DOES NOT ARISE. 7. THE LEARNED D.R. COULD NOT CONTROVERT THE SUBMISSIONS MADE BY THE LEARNED COUNSEL FOR THE ASS ESSEE. 8. WE HAVE PERUSED THE JUDGMENT OF THE HON'BLE PUN JAB & HARYANA HIGH COURT IN ASSESSEES OWN CASE IN ITA NO.286 OF 2013 (O&M) DATED 22.7.2015, WHICH HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND CONSEQUENTLY THE ADDITIO N MADE BY THE ASSESSING OFFICER DOES NOT STAND AS ON DATE. IN VIEW OF THE FACT THAT THE QUANTUM ITSELF HAS BEEN DELETED, THE PENALTY 5 UNDER SECTION 271(1)(C) OF THE ACT DOES NOT SURVIVE . . FURTHER, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT (APPEALS) IN DELETING THE PENALTY ON TH E BASIS THAT THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS ON THE PART OF THE ASSESSEE. THE EXPLANATION OFFERED BY THE ASSESSEE WAS A BONAFIDE ONE, THIS FACT ALSO GETS STRENGTHENED BY THE JUDGMENT OF THE HON'BLE HIGH COURT DELIVERED IN FAVOUR OF THE ASSESSEE. IN VIEW OF ALL THIS, WE CONFIRM THE ORDER OF THE LEARNED CIT (APPE ALS), DELETING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT LEVIED BY THE ASSESSING OFFICER. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF OCTOBER, 2015. SD/- SD/- (H.L.KARWA) (RANO JAIN) VICE PRESIDENT ACOUNTANT MEMBER DATED : 5 TH OCTOBER, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH