Asha M. Primlani, New Delhi V. DCIT, New Delhi

ITA 939/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4312 (ITAT-DELHI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 18-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA
• Assessee Lawyers: R GULATI
• Keywords: Salary income; Cost of acquisition; Bonafide mistake
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA, VICE PRESIDENT AND SHRI RAJPAL YADAV, JUDICIAL MEMBER I.T.A NO. 939/DEL/11 ASSTT. YEAR : 2005-06 ASHA M. PRIMLANI, A-61, MAYFAIR GARDEN NEW DELHI. AAEPP9663L VS. DCIT CIRCLE-47(1) MAYUR BHAWAN, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI R. GULATI, CA RESPONDENT BY: MS. ANUSHA KHURANA, SR. DR ORDER PER RAJPAL YADAV : JM THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LD. CIT(A) DATED 25.11.2010 PASSED FOR ASSTT. YEAR 2005 -06. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT LD. CIT(A) HAS ER RED IN CONFIRMING THE PENALTY OF ` 2,13,809/-, IMPOSED U/S 271(1)(C) OF THE INCOME TA X ACT 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IN AN INDIVIDUAL. SHE HAS FILED HER RETURN OF INCOME ON 26.10.2005 DECLAR ING AN INCOME OF ` ITA NO. 939/DEL/11 ASSTT. YEAR 2005-06 2 21,60,230/-. AN ASSESSMENT U/S 143(3) WAS PASSED ON 7.12.2007 WHEREBY AN ADDITION OF ` 9,52,805/- WAS MADE IN THE INCOME OF ASSESSEE BY DENYING DEDUCTION CLAIMED U/S 54EC OF THE ACT. IT EMERGES OUT FROM THE RECORD THAT ASSESSEE HAD SOLD THREE HO USE PROPERTY, WHICH GIVE RISE TO A CAPITAL GAIN OF ` 54,12,870/-. SHE HAS MADE INVESTMENT IN REC BONDS AMOUNTING TO ` 55 LACS. SHE CLAIMED EXEMPTION FROM LEVY OF CAPITAL GAIN TAX U/S 54EC ON THE GROUND THAT SHE HA S MADE INVESTMENT IN REC BONDS. ON SCRUTINY OF THE ACCOUNTS, IT WAS FOUN D TO THE AO THAT ONE HOUSE PROPERTY NAMELY RAJAN HOUSE MUMBAI WAS SOLD ON 31.12.2004. THE SALE CONSIDERATION IS ` 13,50,000/-. THE COST OF ACQUISITION OF THIS HOUSE PROPERTY IS ` 3,97,195/-. A CAPITAL GAIN OF ` 9,52,805 WAS RESULTED TO THE ASSESSEE ON THIS TRANSACTION. THE INVESTMENT IN REC BONDS WERE MADE ON 13 TH JULY, 2004, 20 TH JULY, 2004 AND 24 TH JULY, 2004. ACCORDING TO THE AO, THE DATE OF SALE IS SUBSEQUENT TO THE DA TE OF INVESTMENT. THEREFORE, IT CANNOT BE CONSTRUED THAT SALE PROCEED FROM THIS HOUSE PROPERTY WAS INVESTED IN REC BONDS. WHEN THIS ANOMA LY WAS CONFRONTED TO THE ASSESSEE DURING THE ASSESSMENT PR OCEEDING, THEN SHE WITHDREW HER CLAIM AND POINTED OUT THAT UNDER SOME BONAFIDE MISTAKE SHE HAS CLAIMED DEDUCTION U/S 54EC ON THIS AMOUNT. HER TAX CONSULTANT HAD ADVISED THAT TOTAL CAPITAL GAIN ARISEN TO HER W AS ` 54,12,870/-. SHE HAS ALREADY MADE AN INVESTMENT OF ` 55 LACS IN THE REC BONDS. ITA NO. 939/DEL/11 ASSTT. YEAR 2005-06 3 THEREFORE, SHE IS NOT SUPPOSED TO MAKE FURTHER INVE STMENT. IT APPEARS THAT DATE OF SALE AND DATE OF INVESTMENT WERE NOT C ROSS CHECKED BY THE TAX ADVISOR WHO PREPARED THE RETURN AT THE END OF T HE YEAR. SHE IMMEDIATELY WITHDREW HER CLAIM AND OFFERED THE AMOU NT FOR TAX. LD. AO HAD VISITED THE ASSESSEE WITH PENALTY UNDER SECTION 271(1)(C) AND IMPOSED A PENALTY OF ` 2,13,809/- 3. AN APPEAL TO LD. CIT(A) DID NOT BRING ANY RELIE F TO THE ASSESSEE. 4. WITH THE ASSISTANCE OF LD. REPRESENTATIVE, WE HA VE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT ASSESSEE HAS SHO WN SALARY INCOME FROM M/S. OXFORD AND IBH PUBLISHING COMPANY. SHE H AD SHOWN CAPITAL GAINS OF ` 54,12,870/- ON SALE OF THREE HOUSE PROPERTIES. SHE HAS CLAIMED DEDUCTION U/S 54EC ON THE GROUND THAT ` 55 LACS WERE INVESTED IN REC BONDS. THE ERROR COMMITTED AT THE END OF ASS ESSEE IS THAT SHE HAS NOT VERIFIED THE DATE OF INVESTMENT AT THE TIME WHEN SHE FILED THE RETURN. THE INVESTMENT WAS PRIOR TO THE DATE OF SAL E. TO OUR MIND, SHE HAS DISCLOSED ALL THE PARTICULARS OF CAPITAL GAIN A RISEN TO HER. SHE HAS ALSO DISCLOSED THE DETAILS OF INVESTMENT IN THE RET URN. PRIMA FACIE A DELIBERATE ATTEMPT IS NOT DISCERNABLE AT THE END OF ASSESSEE FOR CONCEALING THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS. IT IS NOT AVAILABLE ON RECORD WHEN SHE ACTUALLY RE CEIVED THE AMOUNT ON SALE OF PROPERTY. POSSIBILITY OF RECEIVING ADVANCE MAY NOT BE RULED OUT. ITA NO. 939/DEL/11 ASSTT. YEAR 2005-06 4 THE SALE DEED MIGHT HAVE REGISTERED ON 31.12.2004, BUT PART OF SALE CONSIDERATION COULD BE RECEIVED BY THE ASSESSEE IN EARLIER TIMES. HOWEVER, THESE FACTS ARE NOT EMERGING OUT FROM THE RECORD AND REMAINED UNVERIFIED. IN TOTALITY OF CIRCUMSTANCES, IT APPEARS TO US THAT IT IS A BONAFIDE ERROR WHILE PREPARING THE RETURN. THE TAX CONSULTANT TOOK INTO CONSIDERATION THE TOTAL CAPITAL GAIN AND TOTAL INVESTMENT. THE INVESTMENT IS MORE THAN THE GAIN. THEY FAIL TO CONS IDER THE DATE OF INVESTMENT. THE POSSIBILITY OF IT BEING A HUMAN ERR OR CANNOT BE RULED OUT. THEREFORE, ASSESSEE DOES NOT DESERVE TO BE VISITED WITH PENALTY U/S 271(1) OF THE ACT. WE ALLOW THE APPEAL OF ASSESSEE AND DELETE THE PENALTY. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH APRIL, 2011. SD/- SD/- [G.E.VEERABHADRAPPA] [RAJPAL YADAV] VICE PRESIDENT JUDICIAL MEMBER DATED: 19.04.2011 VEENA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BEN CHES