Rahul Prakash Bhatewara, Pune V. Income-tax Officer,

ITA 977/PUN/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7682 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-12-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 12-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK AGGARWAL
• Section: 6; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 976 /P U N/201 4 / ASSESSMENT YEAR : 20 0 9 - 10 PRAKASH LALCHAND BHATEWARA, MANIK, SILVER GARDEN, NEAR KAMAT HOSPITAL, CHINCHWAD, PUNE 411033 PAN : AAUPB5076H ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 9(1), PUNE / RESPONDENT . / ITA NO . 977/PUN/2014 / ASSESSMENT YEAR : 2009 - 10 RAHUL PRAKASH BHATEWARA, MANIK, SILVER GARDEN, NEAR KAMAT HOSPITAL, CHINCHWAD, PUNE 411033 PAN : AAUPB5075E .... ... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 9(1), PUNE / RESPONDENT ASSESSEE BY : S HRI ALOK SHARMA REVENUE BY : SHRI VIVEK AGGARWAL / DATE OF HEARING : 17 - 0 8 - 2017 / DATE OF PRONOUNCEMENT : 24 - 0 8 - 2017 2 ITA NO S. 976 & 977/PUN/2014, A.Y. 2009 - 10 / ORDER PER VIKAS AWASTHY, JM : TH ESE APPEALS BY THE ASSESSEES ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - V, PUNE FOR THE ASSESSMENT YEAR 2009 - 10 AGAINST CONFIRMING OF PENALTY LEVIED U/S. 271(1)(C) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) IN THEIR RESPECTIVE CASES. BOTH THE IMPUGNED ORDERS ARE DATED 20 - 02 - 2014. THE ASSESSEES IN PRESENT SET OF APPEALS ARE RELATED TO EACH OTHER. SINCE, THE ISSUES RAISED IN PRESENT APPEAL S ARE ARISING FROM SAME SET OF FACTS AND IDENTICAL GROUNDS HAVE BEEN RAISED IN BOTH THE APPEALS, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DECIDED BY THIS C OMMON ORDER . 2. FOR THE SAKE OF CONVE NIENCE AND BREVITY THE FACTS ARE TAKEN FROM ITA NO. 976/PUN/2014. THE ASSESSEE IN ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 200 9 - 10 DECLARED TOTAL INCOME OF RS.6,27,520/ - AND AGRICULTURAL INCOME OF RS.3,85,000/ - . DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS TWO PARCELS OF LAND. THE ASSESSEE HAS DISCLOSED AGRICULTURAL INCOME OF RS.2,90,000/ - FROM AGRICULTURAL LAND AT KAUTHE AND RS.95,000/ - FROM AGRICULTURAL LAND FROM CHIMBLI. THE ASSESSING OFFICER FOUND THAT THE LAND SITUATED AT KAUTHE WAS SOLD BY THE ASSESSEE ON 09 - 08 - 2008. THE ASSESSING OFFICER OPINED THAT SINCE THE LAND WAS SOLD IN THE MONTH OF AUGUST , THE ASSESSEE COULD NOT HAVE EARNED AGRICULTURAL INCOME TO THE TUNE OF RS.2,90,000/ - IN SHORT SPAN OF FOUR MONTHS . IT WAS FURTHER OBSERVED THAT THERE IS NO EVIDENCE TO SUGGEST THAT OWNERSHIP IN STANDING 3 ITA NO S. 976 & 977/PUN/2014, A.Y. 2009 - 10 CROP AT THE TI ME OF SALE OF LAND WAS RETAINED BY THE ASSESSEE. THE ASSESSING OFFICER ACCORDINGLY MADE ADDITION OF RS.2,90,000/ - IN THE INCOME RETURNED BY THE ASSESSEE. THE ASSESSEE ACCEPTED THE ADDITION. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S. 271(1) (C) FOR CONCEALMENT OF PARTICULARS OF INCOME. THE ASSESSING OFFICER VIDE ORDER DATED 25 - 06 - 2012 LEVIED PENALTY OF RS.99,610/ - U/S. 271(1)(C) OF THE ACT. AGGRIEVED BY THE ORDER LEVYING PENALTY, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THE CONTENTIONS OF THE ASSESSEE AND CONFIRMED LEVY OF PENALTY. THE STAND OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW IS THAT ALTHOUGH THE LAND WAS SOLD IN AUGUST, 2008 BUT IT WAS MUTUALLY AGREED BETWEEN THE ASSESSEE AND PURCHASER OF THE LAND THAT THE OWNERSHIP OF THE STANDING CROP WILL BE RETAINED BY THE ASSESSEE. SINCE, THERE WAS NO DOCUMEN TARY EVIDENCE OTHER THAN 7/12 AND 8A EXTRACTS THE ASSESSEE ACCEPTED THE ADDITIONS MADE BY THE ASSESSING OFFICER IN QUANTUM PROCEEDINGS. THE ASSESSING OFFICER NEVER RAISED ANY DOUBT OVER THE CONTENTIONS OF THE ASSESSEE AND THE SAME WERE NOT FOUND TO BE FAL SE. THEREFORE, NO CASE FOR LEVY OF PENALTY IS MADE OUT. THE SUBMISSIONS OF THE ASSESSEE WERE REJECTED BY THE COMMISSIONER OF INCOME TAX (APPEALS) . NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 3. SHRI ALOK SHARMA APPEARING ON BEHALF OF TH E ASSESSEE AND REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. THE LD. AR PRAYED FOR REVERSING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) AND ALLOWING THE APPEALS OF THE ASSESSEES. 4 ITA NO S. 976 & 977/PUN/2014, A.Y. 2009 - 10 4. ON THE OTHER HAND SHRI VIVEK AGGARWAL REPRESEN TING THE DEPARTMENT VEHEMENTLY SUPPORTED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING LEVY OF PENALTY U/S. 271(1)(C) IN BOTH THE CASES. THE LD. DR CONTENDED THAT THE ASSESSEE HAS SOLD LAND IN AUGUST, 2008 AND SHOWED AGRICULTURAL INCOME TO THE TUNE OF RS.2,90,000/ - WITHIN SHORT SPAN OF FOUR MONTHS I.E. FROM APRIL, 2008 TO AUGUST, 2008. THE ASSESSEE HAS NOT PLACED ON RECORD ANY EVIDENCE TO SHOW THAT OWNERSHIP OF STANDING CROP WAS RETAINED BY THE ASSESSEE AT THE TIME OF SALE OF LAND. 5. W E HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW . PENALTY U/S. 271(1)(C) HAS BEEN LEVIED ON THE GROUND THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE THAT THE AGRICULTURAL INCOME OF RS.2,90,000/ - WAS EARNED BY THE ASSESSEE FROM THE SALE OF CROPS CULTIVATED ON LAND WHICH WAS SOLD IN THE MONTH OF AUGUST, 2008. THE ASSESSEE HAS FAILED TO SUBSTANTIATE HIS CONTENTION S THAT THE OWNERSHIP OF THE STANDING CROP WAS RETAINED BY THE ASSESSEE AT THE TIME OF SALE OF LAND. IT IS A WELL SETTLED LAW THAT EVERY ADDITION MADE DOES NOT CULMINATE INTO LEVY OF PENALTY. ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE DISTINCT AND INDEPENDENT. IF THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE ANY I NCOME WITH DOCUMENTARY EVIDENCE IT MAY BE A CASE FIT FOR MAKING ADDITIONS BUT FOR LEVY OF PENALTY THE PARAMETERS ARE DIFFERENT. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF COMMISSIONER OF INCOME TAX VS. J.K. SYNTHETICS LTD. [219 ITR 267] HELD THAT FINDINGS RECORDED IN QUANTUM APPEAL CANNOT BE S AID TO BE DECISIVE AND CONCLUDED FACTOR IN THE PENALTY PROCEEDINGS. THEREFORE, THE EXPLANATION FURNISHED BY THE ASSESSEE IF MEASURED ON THE SCALE FOR MAKING 5 ITA NO S. 976 & 977/PUN/2014, A.Y. 2009 - 10 ADDITION AND FOR LEVY OF PENALTY VARY DIFFERENTLY. THE EXPLANATION FURNISHED BY THE ASSESSEE IS PLAUSIBLE. THE ASSESSEE HAS FILED COPY OF 7/12 EXTRACT TO SHOW THAT CROP WAS CULTIVATED ON THE LAND IN QUESTION. THE ASSESSING OFFICER IN ASSESSMENT PROCEEDINGS AND WHILE LEVYING PEN ALTY HAS NOT REMARKED THAT THE EXPLANATION FURNISHED BY THE ASSESSEE IS IN ANY WAY FALSE. THE ONLY REASON FOR REJECTING THE EXPLANATION FURNISHED BY THE ASSESSEE IS THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE HIS CONTENTIONS WITH COGENT AND RELIAB LE EVIDENCE. 6. THE AGRA BENCH OF TRIBUNAL IN THE CASE OF ADDITIONAL COMMISSIONER OF INCOME TAX VS. KISAN SAHKARI CHINI MILLS LTD. REPORTED AS 20 TAXMANN.COM 769 HAS HELD THAT WHERE EXPLANATION FURNISHED BY ASSESSEE WAS BONAFIDE AND THERE WAS NO FINDING OF ASSESSING OFFICER THAT SUCH EXPLANATION IS FALSE, NO PENALTY CAN BE LEVIED U/S. 271(1)(C) OF THE ACT. 7. IN VIEW OF THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE , WE FIND THAT THIS IS NOT A FIT CASE FOR LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. TH US, THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 8. THE FACTS INVOLVED IN ITA NO. 977 /PUN/201 4 ARE IDENTICAL TO THE FACTS OF THE CASE DECIDED IN ITA NO. 976 /PUN/201 4 . THE ASSESSEE IN ITA NO. 977 /PUN/201 4 IS CO - OWNE R OF LAND WITH ASSESSEE IN ITA NO. 976/PUN/2014. THE PENALTY OF RS.64,371/ - U/S. 271(1)(C) HAS BEEN LEVIED ON THE ASSESSEE FOR THE SIMILAR REASONS. THEREFORE, THE FINDINGS GIVEN BY US IN ITA NO. 976 /PUN/201 4 WOULD MUTATIS MUTANDIS APPLY IN THE CASE OF 6 ITA NO S. 976 & 977/PUN/2014, A.Y. 2009 - 10 AS SESSEE IN ITA NO. 977 /PUN/201 4 . ACCORDINGLY, FOR THE SIMILAR REASONS IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, APPEALS OF BOTH THE ASSESSEES ARE ALLOWED. ORDER PRONOUNCED ON THURSDAY, THE 24 TH DAY OF AUGUST, 2017 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 24 TH AUGUST, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - V, PUNE 4. / THE CIT - V, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE