ITO, New Delhi V. Sh. Ajay Sharma, New Delhi

ITA 995/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3196 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 26-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S KRISHNAN
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES B : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA.NO.995/DEL./2016 ASSESSMENT YEAR 2010-2011 THE INCOME TAX OFFICER WARD-28(4), ROOM NO.1915, E-2 BLOCK, CIVIC CENTER, J.N.L. MARG, INCOME TAX OFFICE, NEW DELHI. VS. SHRI AJAY SHARMA, 13, C.S.C. NEW FRIENDS COLONY NEW DELHI 110 065 PAN AABPS3083Q (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI RAGHUNATH, SR. D.R. FOR ASSESSEE : SHRI S. KRISHNAN, C.A. DATE OF HEARING : 23.11.2017 DATE OF PRONOUNCEMENT : 23.11.2017 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-10, NEW DELHI, DATED 30 TH JANUARY, 2014, FOR THE A.Y. 2010-2011, CHALLENGING THE CANCELLATION OF PENALTY UNDER SECTION 271(1)(C) OF THE I.T. ACT, 1961, ON ACCOUNT OF ADDITION MADE UNDER SECTION 50C OF THE I.T. ACT. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT ASSESSE E HAS SOLD INDUSTRIAL PLOT AT NEEMRANA, PHASE-II, BAHROR, DIST RICT ALWAR 2 ITA.NO.995/DEL./2016 SHRI AJAY SHARMA NEW DELHI. (RAJASTHAN). THE ASSESSEE HAS DECLARED SHORT TERM C APITAL GAIN OF RS.19,59,668. THE ASSESSEE HAS DECLARED THE SALE CO NSIDERATION AT RS.1,27,50,000 VIDE SALE DEED EXECUTED DATED 11 TH MARCH, 2010. THE DOCUMENT SHOWS THAT STAMP DUTY WAS PAID AT RS.1,83, 02,910 AS REFLECTED IN THE AIR INFORMATION AS AGAINST SALE CO NSIDERATION OF RS.1,27,50,000 AND THERE IS A DIFFERENCE OF RS.55,5 2,910. THUS THE PROVISIONS OF SECTION 50C OF THE I.T. ACT WERE FOUN D ATTRACTED IN THIS CASE. THE A.O. ACCORDINGLY MADE ADDITION OF RS.55,5 2,910 ON ACCOUNT OF DIFFERENCE AND TAKEN AS ADDITIONAL SHORT TERM CA PITAL GAIN AND ADDED TO THE INCOME OF THE ASSESSEE. THE A.O. VIDE SEPARATE ORDER LEVIED THE PENALTY UNDER SECTION 271(1)(C) OF THE I .T. ACT. 3. THE ASSESSEE EXPLAINED BEFORE THE LD. CIT(A) TH AT A.O. HAS APPLIED DEEMING PROVISIONS OF SECTION 50C OF THE I. T. ACT AND MADE ADDITION BEING DIFFERENCE BETWEEN SALE CONSIDERATIO N AS PER SALE DEED AND VALUATION MADE BY THE STAMP VALUATION AUTHORITY . THE VALUATION OF STAMP VALUATION AUTHORITY IS NOT A CONCLUSIVE EV IDENCE OF ACTUAL FAIR MARKET VALUE OF THE PROPERTY. THE A.O. HAS NOT BROUGHT ANY EVIDENCE ON RECORD BY WHICH IT CAN BE ESTABLISHED T HAT ASSESSEE HAS RECEIVED MORE THAN THE AMOUNT SHOWN TO HAVE RECEIVE D AS PER THE 3 ITA.NO.995/DEL./2016 SHRI AJAY SHARMA NEW DELHI. SALE DEED. THE ASSESSEE DISCLOSED ALL THE MATERIAL FACTS BEFORE A.O. THEREFORE, IT IS NOT A CASE OF LEVY OF PENALTY. THE ASSESSEE RELIED UPON THE DECISION OF HONBLE KOLKATA HIGH COURT IN THE C ASE OF CIT VS. MADAN THEATRES LTD., 260 CTR 75. THE LD. CIT(A) REP RODUCED THE JUDGMENT IN THE IMPUGNED ORDER AND FOUND THAT PENAL TY HAVE BEEN LEVIED ON ACCOUNT OF ADDITION MADE BY APPLYING THE DEEMING PROVISIONS OF SECTION 50C OF THE I.T. ACT, WHICH CO ULD NOT BE CONSTRUED AS FURNISHING OF INACCURATE PARTICULARS O R CONCEALING THE PARTICULARS OF INCOME. IT WAS FURTHER FOUND THAT FO R APPLYING THE PROVISIONS OF SECTION 50C, IT IS NOT NECESSARY FOR THE A.O. TO EXAMINE WHETHER ACTUALLY THE ASSESSEE HAS RECEIVED ANYTHING OVER AND ABOVE THE AMOUNT MENTIONED IN THE SALE DEED BECAUSE THE A DDITION IS MADE BY APPLYING THE DEEMING PROVISION OF SECTION 50C OF THE ACT. THERE ARE NO POSITIVE EVIDENCE TO INDICATE RECEIPT OF ANY MONEY OVER AND ABOVE WHAT IS STATED IN THE SALE DEED. THE ASSESSEE DISCLOSED ALL THE RELEVANT FACTS BEFORE A.O. THEREFORE, PENALTY WAS C ANCELLED. 4. THE LD. D.R. RELIED UPON THE DECISION OF HONBL E DELHI HIGH COURT IN THE CASE OF ZOOM COMMUNICATIONS 327 ITR 51 0 AND 4 ITA.NO.995/DEL./2016 SHRI AJAY SHARMA NEW DELHI. SUBMITTED THAT EVEN BY APPLYING DEEMING PROVISIONS UNDER SECTION 50C OF THE I.T. ACT, PENALTY IS LEVIABLE. 5. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE, REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND RELIED UPON THE DECISION OF THE HONBLE KOLKATA HIG H COURT IN THE CASE OF CIT VS. MADAN THEATRES LTD., (SUPRA). 6. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE DO NOT FIND ANY MERIT IN THIS APPEAL OF THE REVENUE. THE ASSESSEE H AS DISCLOSED ALL THE RELEVANT FACTS OF SALE OF THE PROPERTY TO THE R EVENUE DEPARTMENT. THE ASSESSEE DECLARED THE SALE CONSIDERATION OF RS. 1,27,50,000 AS PER SALE DEED AND ALSO OFFERED THE SHORT TERM CAPIT AL GAIN FOR TAXATION. THE A.O. HOWEVER, APPLIED THE DEEMING PROVISIONS OF SECTION 50C OF THE I.T. ACT, FOR THE PURPOSE OF MAKING THE ADDITIO N. THUS, THE A.O. DID NOT BRING ANY POSITIVE EVIDENCE ON RECORD TO SH OW THAT ASSESSEE HAS CONCEALED PARTICULARS OF INCOME OR FURNISHED AN Y INACCURATE PARTICULARS. THE VALUATION OF THE STAMP VALUATION A UTHORITY IS NOT A CONCLUSIVE EVIDENCE OF RECEIPT OF THE MONEY BY ASSE SSEE OVER AND ABOVE WHAT IS RECORDED IN THE SALE DEED. THE A.O. H AS NOT BROUGHT ANY CONCRETE EVIDENCE OF CONCEALMENT OF INCOME IN T HE ORDER. THE 5 ITA.NO.995/DEL./2016 SHRI AJAY SHARMA NEW DELHI. A.O. AT THE STAGE OF ASSESSMENT, SIMPLY APPLIED THE DEEMING PROVISIONS OF SECTION 50C OF THE I.T. ACT WITHOUT B RINGING ANY EVIDENCE ON RECORD FOR CONCEALMENT OF INCOME OR FUR NISHING INACCURATE PARTICULARS BY THE ASSESSEE. IN THE ABSE NCE OF ANY POSITIVE EVIDENCE WITH RESPECT TO CONCEALMENT OF INCOME, THE RE WERE NO JUSTIFICATION FOR THE A.O. TO LEVY PENALTY IN THE M ATTER. THE HONBLE KOLKATA HIGH COURT IN THE CASE OF CIT VS. MADAN TEA TRES LTD., (SUPRA), ON IDENTICAL FACTS, DISMISSED THE DEPARTMENTAL APPE AL IN WHICH IT WAS HELD AS UNDER : WHERE ASSESSEE HAD OFFERED ACTUAL AMOUNT RECEIVED ON SALE OF PROPERTY FOR TAXATION, REVENUE AUTHORITIES WERE NOT JUSTIFIED IN PASSING PENALTY ORDER UNDER SECTION 271(1)(C) BY AD OPTING HIGHER SALE CONSIDERATION UNDER SECTION 50C ON BASIS OF ST AMP DUTY VALUATION OF SAID PROPERTY. 7. CONSIDERING THE ABOVE DISCUSSION IN THE LIGHT OF THE ORDER OF THE LD. CIT(A), NO INTERFERENCE IS CALLED FOR IN THE MATTER. IT MAY ALSO BE NOTED HERE THAT LD. CIT(A) DISCUSSED SOME O THER SMALL ADDITIONS ALSO ON WHICH PENALTY HAVE BEEN CANCELLED . HOWEVER, DURING THE COURSE OF ARGUMENTS, NO ARGUMENTS HAVE B EEN MADE BY THE LD. D.R. ON THE SAME AND EVEN THE SAME ARE NOT CHALLENGED IN 6 ITA.NO.995/DEL./2016 SHRI AJAY SHARMA NEW DELHI. THE GROUNDS OF APPEAL. IN VIEW OF THE ABOVE, DEPART MENTAL APPEAL STANDS DISMISSED. 8. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (L.P. SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 23 RD NOVEMBER, 2017 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT B BENCH, DELHI 6. GUARD FILE. //BY ORDER // ASST. REGISTRAR, ITAT, DELHI BENCHES DELHI.