Shri Tajdin Hasanali Halani, Anand V. The ACIT.,Anand Circle, Anand

ITA 971/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1071 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 10-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KAMLESH N BHAT
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Wrong claim
• Section: 143(3); 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , , BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.971/AHD/2013 ( / ASSESSMENT YEAR : 2008-09) TAJDIN HASANALI HALANI 42-43, SABINA PARK NR.JAKAT NAKA B/H. KHOJA SOCIETY OPP. ROLLING MILL BHALEJ ROAD, ANAND / VS. THE ACIT ANAND CIRCLE ANAND $ ./ ./ PAN/GIR NO. : AANPH 1966 P ( $& / APPELLANT ) .. ( '($& / RESPONDENT ) $&) / APPELLANT BY : SHRI KAMLESH N. BHAT, AR '($&*) / RESPONDENT BY : SHRI SANJAY KUMAR, SR.DR +* / DATE OF HEARING 12/07/2016 ,-./* / DATE OF PRONOUNCEMENT 18/07/2016 / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-IV, BARODA, DAT ED 28/02/2013 FOR THE ASSESSMENT YEAR (AY) 2008-09. ITA NO. 971/AHD /2013 TAJDIN HASANALI HALANI VS. ACIT ASST.YEAR 2008-09 - 2 - 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- 2.1. ASSESSEE IS AN INDIVIDUAL STATED TO BE DERIVIN G INCOME FROM PARTNERSHIP-FIRM AND CAPITAL GAINS. ASSESSEE FILE D HIS RETURN OF INCOME FOR AY 2008-09 ON 30/12/2009 DECLARING TOTAL INCO ME AT RS.14,86,920/- AND AGRICULTURE INCOME AT RS.3,65,000/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT' ) VIDE ORDER DATED 03/12/2010 AND THE TOTAL INCOME WAS DETERMINED AT R S.20,22,090/- BY MAKING ADDITION(S) OF RS.10,71,492/- BY APPLYING SE CTION 50C OF THE ACT, RS.1,87,924/- ON ACCOUNT OF UNEXPLAINED DEPOSITS IN BANK AND RS.5,000/- ON ACCOUNT OF UNEXPLAINED CAPITAL INTRODUCTION. WH ILE MAKING THE AFORESAID ADDITIONS, ASSESSING OFFICER (AO) CONCLUD ED THAT ASSESSEE HAD CONCEALED AND FURNISHED INACCURATE PARTICULARS OF I NCOME AND THEREFORE IT WAS FIT CASE FOR LEVY OF PENALTY U/S.271(1)(C) OF T HE ACT. HE ACCORDINGLY VIDE ORDER DATED 24/06/2011 LEVIED PENALTY OF RS.4, 39,800/- U/S.271(1)(C) OF THE ACT. AGGRIEVED BY THE PENALTY ORDER OF TH E AO, ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A), WHO DISMISSED THE APPEAL OF ASSESSEE AND UPHELD THE PENALTY LEVIED BY AO BY OBSERVING AS UNDER:- 10. BUT THE ABOVE ENTIRE SUBMISSION OF THE AR WITH REGARD TO LEVY OF PENALTY U/S 271(1)(C) ON ADDITION OF 10,03,900/- IS NOT FOUND TO BE TENABLE. IN THE CASE OF APPELLANT, THE VALUE OF LAN D AS PER SALE DEED FOR THE STAMP DUTY VALUATION PURPOSE HAS BEEN DETERMINE D AND TAKEN AT 30,03,900/- BY THE STAMP DUTY AUTHORITY. IN VIEW OF THIS AS PER ITA NO. 971/AHD /2013 TAJDIN HASANALI HALANI VS. ACIT ASST.YEAR 2008-09 - 3 - PROVISIONS OF SECTION 50C OF THE IT ACT, THE SALE V ALUE OF LAND HAS TO BE ADOPTED AT 30,03,900/- AND NOT THE AMOUNT OF 20,00,000/- AS ADOPTED BY THE APPELLANT. THE ABOVE ENTIRE SUBMISSI ON OF THE AR OF THE APPELLANT IS MERE SUBMISSION AND THE SAME IS NOT SU PPORTED BY ANY EVIDENCES. IT MAY BE MENTIONED THAT THE APPELLANT D URING THE COURSE OF ASSESSMENT PROCEEDINGS WAS ASKED BY THE AO TO SHOW CAUSE VIDE ORDER SHEET DATED 22-11-2010 AS TO WHY THE LAND SALE CONS IDERATION SHOULD NOT BE TAKEN AT 30,03,900/- BEING THE VALUE OF LAND SOLD AND AS DE TERMINED BY THE STAMP DUTY AUTHORITIES FOR THE PURPOSE OF ST AMP DUTY VALUATION FOR CALCULATING CAPITAL GAIN AS PER PROVISIONS OF S ECTION 50C OF THE IT ACT. AS PER THE AO THE APPELLANT DID NOT SUBMIT AND DID NOT EXPLAIN ANYTHING IN THIS REGARD. THUS, THERE WAS TOTAL FAIL URE ON THE PART OF THE APPELLANT TO JUSTIFY THE VALUE OF LAND OF 20,00,000/- AS ADOPTED BY HIM. NOW DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT'S AR HAS FILED ABOVE SUBMISSION DATED 22-02-2013 THROUGH TAP AL OF THE OFFICE OF THE UNDERSIGNED ON 27-02-2013. BUT THE ABOVE JUSTIF ICATION OF THE AR OF THE APPELLANT IS ACCEPTABLE AS THE STAMP AUTHORITIE S HAS VALUED THE LAND AT 30,03,900/- FOR THE PURPOSE OF STAMP DUTY VALUATION . THE PROVISIONS OF SECTION 50C OF THE IT ACT ARE VERY CLEAR AND FOR CALCULATING THE CAPITAL GAIN TAX, THE VALUE OF THE LAND HAS TO BE C ONSIDERED AT 30,03,900/- AS DETERMINED BY THE STAMP AUTHORITIES. CONSIDERING THESE FACTS, I HOLD THAT, THE AO HAS CORRECTLY TAKEN THE VALUE OF THE LAND AT 30,03,900/- IN TERMS OF PROVISIONS OF SECTION 50C O F THE IT ACT INSTEAD OF 20,00,000/- AND THEREFORE ADDITION OF 10,03,900/- AS MADE BY THE AO WAS FULLY JUSTIFIED. IN VIEW OF THIS, THE AO HAS CORRECTLY LEVIED THE PENALTY U/S 271(1)(C) OF THE ACT ON ADDITION OF 10,03,900/- AS BY CONSIDERING THE VALUE OF LAND LESS BY AN AMOUNT OF 10,03,900/- THE APPELLANT FILED INACCURATE PARTICULARS OF INCOME AN D THEREFORE THE SAME IS CONFIRMED. AGAIN, THE APPELLANT HAS CLAIMED EXCE SS EXPENSES OF 67,592/- ON ACCOUNT OF TRANSFER FEES OF LAND AND WH ICH HAS BEEN DETECTED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS ONLY. AS STATED ABOVE DURING THE COURSE OF APPELLATE PROC EEDINGS SUBMISSION DATED 22-02-2013 HAS BEEN FILED BY THE AR OF THE AP PELLANT THROUGH TAPAL OF THE UNDERSIGNED AND IN SUCH SUBMISSION NO ANY JUSTIFICATION HAS BEEN GIVEN FOR SUCH WRONG CLAIM. CONSIDERING THESE FACTS, I, HOLD THAT THE AO IS JUSTIFIED IN LEVYING PENALTY U/S 271(1)(C ) OF THE IT ACT ON THIS ITA NO. 971/AHD /2013 TAJDIN HASANALI HALANI VS. ACIT ASST.YEAR 2008-09 - 4 - WRONG CLAIM OF EXPENSES OF 67,592/- ALSO AND THEREFORE THE SAME IS CONFIRMED. 11. AGAIN, THE AO NOTICED THAT THERE WAS DEPOSIT OF 16,404/- ON 11-01-2008, DEPOSITS OF 50,000/- ON 06-02-2008 AND FURTHER DEPOSIT OF 8,000/- ON 20-03-2008 IN THE ACCOUNT OF THE APPELLA NT WITH AXIS BANK, BHALEJ ROAD, ANAND AND SOURCES OF SUCH DEPOSI TS WERE NOT SATISFACTORILY EXPLAINED BY THE APPELLANT WITH RELE VANT EVIDENCES BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS DESPITE THE OPPORTUNITY GIVEN TO IT. FURTHER, THE AO NOTICED TH AT THERE WAS DEPOSITS OF 1,07,130/- ON 26-06-2007 AND FURTHER CREDIT OF 6,390/- ON 24-08-2007 IN APPELLANT'S ACCOUNT WITH DEVELOPMENT CREDIT BANK, GANDHINAGAR. THE APPELLANT DID NOT EXPLAIN SATISFAC TORILY WITH RELEVANT EVIDENCES IN RESPECT OF THESE TWO DEPOSITS ALSO, AN D THEREFORE THE ADDITION OF 1,13,520/- (I.E. 1,07,130/- + 6,390/-) WAS ALSO MADE BY THE AO TO THE TOTAL INCOME OF THE APPELLANT. AGAIN ON VERIFICATION OF APPELLANT'S CAPITAL ACCOUNT WITH KIRAN TRACTOR, THE AO FOUND THAT THERE WAS CAPITAL INTRODUCTION OF 5,000/- ON 07-12-2007 AND THE SAME WAS ALSO NOT SATISFACTORILY EXPLAINED BY THE APPELLANT BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THUS, THE AO MADE TOTAL ADDITION OF 1,92,924/- (I.E. 74,404/- + 1,13,520/- + 5,000/-) AND INITIATED PENALTY, PROCEEDINGS U/S 271(1)(C) ON THESE ADDITIO NS ALSO. THE AO HAS LEVIED PENALTY U/S 271(1)(C) OF THE ACT ON THESE AD DITIONS OF 1,92,924/-. IT MAY BE MENTIONED THAT THE APPELLANT DURING THE C OURSE OF PENALTY PROCEEDINGS DID NOT FILE ANY SUBMISSION IN RESPONSE TO SHOW CAUSE NOTICE U/S 274 R.W.S 271(1)(C) OF THE IT ACT OF THE AO. AGAIN THE APPELLANT'S AR HAS NOT GIVEN ANY, JUSTIFICATION WIT H REGARD TO LEVY OF PENALTY U/S 271(1)(C) OF THE IT ACT ON THESE TOTAL ADDITION OF 1,92,924/- ALSO IN HIS ABOVE SUBMISSION DATED 22-02-2013 AS FI LED DURING THE COURSE OF APPELLATE PROCEEDINGS THROUGH TAPAL. SINC E NO ANY JUSTIFICATION / EXPLANATION HAS BEEN FILED BY THE A PPELLANT FOR LEVY OF PENALTY U/S 271(1)(C) OF THE IT ACT ON THESE ADDITI ONS OF 1,92,024/-AND THEREFORE THE PENALTY LEVIED BY THE AO U/S 271(1)(C ) OF THE ACT ON THE ADDITION OF 1,92,024/- IS ALSO CONFIRMED FOR FILING INACCURATE PARTICULARS OF INCOME. ITA NO. 971/AHD /2013 TAJDIN HASANALI HALANI VS. ACIT ASST.YEAR 2008-09 - 5 - 3. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUNDS:- 1. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE CIT(A) ERRED IN LAW AND IN FACTS IN CONFIRMING THE PENALTY LEVIE D BY ACIT U/S.271(1)(C) IN RESPECT OF THE FOLLOWING ADDITIONS : - ADDITION U/S.50 C RS.10,03,900/- - DISALLOWANCE OF EXPENSES U/S.45 RS. 67,593/- - ADDITION OF CASH DEPOSITS IN BANK A/C. WITH AXIS BANK, BHALEJ ROAD RS. 74,40 4/- - ADDITION OF DEPOSITS WITH DCB BANK GANDHINAGAR RS. 1,13,520/- AND HENCE YOUR APPELLANT PRAYS THAT THE SAME BE D ELETED. 3.1. BEFORE US, LD.AR REITERATED THE SUBMISSIONS AS WERE MADE BEFORE THE AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT PEN ALTY HAS BEEN LEVIED ON THREE COUNTS; NAMELY DISALLOWANCE MADE BY INVOKI NG PROVISIONS OF SECTION 50C OF THE ACT, DISALLOWANCE ON ACCOUNT OF UNEXPLAINED DEPOSITS IN BANK AND DISALLOWANCE ON ACCOUNT OF UNEXPLAINED CAPITAL INTRODUCTION. HE SUBMITTED THAT THE MAJOR PORTION OF PENALTY IS O N ACCOUNT OF ADDITION MADE ON ACCOUNT OF APPLICATION U/S.50C OF THE ACT. HE SUBMITTED THAT SECTION 50C BEING DEEMING PROVISIONS, ANY ADDITION MADE U/S.50C OF THE ACT IS NOT LIABLE FOR PENALTY. HE FURTHER SUBMITTE D THAT THE CAPITAL ASSET WHICH WAS PURCHASED AND WAS SOLD WITHIN A PERIOD OF 37 DAYS. HE FURTHER SUBMITTED THAT THERE IS NO MATERIAL WITH TH E REVENUE TO DEMONSTRATE THAT THE ASSESSEE HAD RECEIVED ANYTHING OVER AND ABOVE THE AMOUNT THAT HAS BEEN DISCLOSED BY THE ASSESSEE. AP ART FROM THIS, HE ITA NO. 971/AHD /2013 TAJDIN HASANALI HALANI VS. ACIT ASST.YEAR 2008-09 - 6 - SUBMITTED THAT ASSESSMENT PROCEEDINGS AND PENALTY P ROCEEDINGS ARE DISTINCT AND SEPARATE AND NOT NECESSARY THAT IN ALL CASES WHERE THE ADDITIONS ARE MADE, PENALTY IS NECESSARILY TO BE LE VIED. LD.SR.DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF AO AND LD.CIT(A ). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH REFE RENCE TO LEVY OF PENALTY ON ACCOUNT OF CONCEALMENT OF INCOME, U/S.271(1)(C) ON THE ADDITION MADE U/S.50C OF THE ACT WHILE DETERMINING CAPITAL GAINS AND OTHER ADDITIONS. THE FACT THAT THE ASSESSEE HAD PURCHASED THE LAND O N 12/11/2007 FOR RS.19,54,392/- AND WAS SOLD FOR RS.20 LACS ON 19/12 /2007 I.E. WITHIN THE PERIOD OF 37 DAYS OF ITS PURCHASE IS NOT IN DISPUTE AND IN SUCH A SITUATION THE ASSESSEES SUBMISSION THAT HE WAS UNDER BONAFID E BELIEF THAT THE SALE CONSIDERATION OF RS.20 LACS IS TO BE CONSIDERED FOR COMPUTING CAPITAL GAINS SEEMS TO BE A REASONABLE BELIEF. THE BELIEF OF ASSESSEE HAS NOT BEEN CONTROVERTED BY REVENUE. IT IS ALSO AN UNDISPUTED FACT THAT IN THE PRESENT CASE THE VALUE OF LAND FOR STAMP DUTY VALUATION PUR POSES WAS CONSIDERED AT RS.30,03,900/- AS AGAINST THE VALUE OF PROPERT Y CONSIDERED BY THE ASSESSEE AT RS. 20,00,000/- WHICH WAS AS PER THE S ALE-DEED. IT IS ALSO A FACT THAT FOR DETERMINING THE CAPITAL GAINS, AO HAD ADOPTED THE STAMP DUTY VALUATION AS MANDATED U/S.50C OF THE ACT. IT IS AN UNDISPUTED FACT THAT SECTION 50C OF THE ACT IS A SPECIAL PROVISION WHICH DEEMS THE VALUE ADOPTED OR ASSESSED BY STAMP VALUATION AUTHORITY AS THE FULL VALUE OF CONSIDERATION RECEIVED ON TRANSFER OF LAND OR BUILD ING OR BOTH, WHERE THE ITA NO. 971/AHD /2013 TAJDIN HASANALI HALANI VS. ACIT ASST.YEAR 2008-09 - 7 - CONSIDERATION RECEIVED BY THE ASSESSEE ON TRANSFER OF SUCH CAPITAL ASSET IS LESS THAT THE VALUE ADOPTED BY STAMP VALUE AUTHORIT IES. IN THE PRESENT CASE, THERE IS NO FINDING OF AO THAT ASSESSEE HAS I NDEED RECEIVED THE CONSIDERATION AS THE VALUE OF LAND AS CONSIDERED FO R STAMP VALUATION PURPOSES OR THAT THE ASSESSEE HAS RECEIVED THE SALE CONSIDERATION WHICH WAS IN EXCESS OF WHAT IS STATED IN THE SALE AGREEME NT NOR HAS AO DOUBTED THE GENUINENESS OF SALE-DEED FURNISHED BY THE ASSES SEE. 4.1. A CASE FOR LEVY OF PENALTY FOR CONCEALMENT OF INCOME HAS TO BE EVALUATED IN TERMS OF PROVISIONS OF EXPLANATION-1 T O SECTION 271(1)(C), AS PER WHICH IF IN RELATION TO ANY ADDITION IN THE ASS ESSMENT, THE ASSESSEE OFFERS NO EXPLANATION OR OFFERS EXPLANATION WHICH I S FOUND TO BE FALSE OR IS NOT ABLE TO SUBSTITUTE THE EXPLANATION AND IS AL SO NOT ABLE TO PROVE THAT THE EXPLANATION IS BONAFIDE, THE ADDITION MADE WOUL D AMOUNT TO CONCEALMENT OF PARTICULARS, OF INCOME. IT IS WELL SETTLED THAT THE PARAMETERS OF JUDGING THE JUSTIFICATION FOR ADDITIO N MADE IN THE ASSESSMENT CASE OF THE ASSESSEE IS DIFFERENT FROM T HE PENALTY IMPOSED ON ACCOUNT OF CONCEALMENT OF INCOME OR FILING INACCURA TE PARTICULARS OF INCOME AND THAT CERTAIN DISALLOWANCE/ADDITION COULD LEGALLY BE MADE IN THE ASSESSMENT PROCEEDINGS ON THE PREPONDERANCE OF PROBABILITIES BUT NO PENALTY COULD BE IMPOSED U/S. 271(1)(C) OF THE ACT ON THE PREPONDERANCE OF PROBABILITIES AND REVENUE HAS TO PROVE THAT THE CLAIM OF EXPENSES BY THE ASSESSEE WAS NOT GENUINE OR WAS INFLATED TO RED UCE ITS TAX LIABILITY. FURTHER, IT IS A SETTLED LAW THAT PENALTY PROCEEDIN GS ARE QUITE DIFFERENT ITA NO. 971/AHD /2013 TAJDIN HASANALI HALANI VS. ACIT ASST.YEAR 2008-09 - 8 - FROM ASSESSMENT PROCEEDINGS, THE FINDING ON ASSESSM ENT PROCEEDINGS, HOWEVER RELEVANT AND GOOD MAY BE BUT THEY CANNOT BE CONCLUSIVE, IN SO FAR AS PENALTY PROCEEDINGS ON CONCERNED. FURTHER , ONLY BECAUSE THE ASSESSEE AGREES TO THE ADDITIONS BECAUSE OF DEEMING PROVISIONS, IT CANNOT BE CONSTRUED ON THE PART OF ASSESSEE OF FILING INAC CURATE PARTICULARS OF INCOME CONSIDERING THE TOTALITY OF THE FACTS OF T HE CASE, WE ARE OF THE VIEW THAT NO CASE FOR LEVY OF PENALTY U/S.271(1)(C ) IS MADE OUT. WE THUS DIRECT THE DELETION OF PENALTY. THUS, THIS GROUND OF ASSESSEE IS ALLOWED. 5 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 18/07/2016 SD/- SD/- () () (RAJPAL YADAV) ( ANIL CHATURVEDI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 18/ 07 /2016 3..,.../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. '($& / THE RESPONDENT. 3. 456 7 / CONCERNED CIT 4. 7 ( ) / THE CIT(A)-IV, BARODA 5. 89:'56 , 56/ , 4 / DR, ITAT, AHMEDABAD 6. :<=+ / GUARD FILE. / BY ORDER, (8' //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD