C.Vijayakumar, Karur V. ACIT, Trichy

ITA 998/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64428 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 07-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAGHAVAN RAMABHADRAN
• Keywords: Sale consideration of property below Jantri Value; Question of law; Revised return
• Section: 143(3); 50C

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHENNAI. BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NO.997/MDS/2012 ASSESSMENT YEAR : 2007-08 SHRI C. BASKER, S/O V.N. CHOKALINGAM, 2, CHANNADANKOIL ROAD, KARUR 639 001. [PAN:AAAHC1657B] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE II, TRICHY. (APPELLANT) (RESPONDENT) I.T.A. NO.998/MDS/2012 ASSESSMENT YEAR : 2007-08 SHRI C. VIJAYAKUMAR, S/O V.N. CHOKALINGAM, 3/7-B, CHANNADANKOIL ROAD, AVS & AVR COLONY, KARUR 639 001. [PAN:AAAHC1648G] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE II, TRICHY. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAGHAVAN RAMABHADRAN, ADVOCATE RESPONDENT BY : SHRI GURU BASHYAM, JCIT DATE OF HEARING : 09.10.2012 DATE OF PRONOUNCEMENT : 12.10.2012 ORDER PER BENCH THESE TWO APPEALS FILED BY DIFFERENT ASSESSEES HAV E BEEN PREFERRED AGAINST DIFFERENT ORDERS OF THE COMMISSIONER OF INC OME TAX (APPEALS), TIRUCHIRAPALLI DATED 21.03.2012 PASSED IN ITA NO. 1 19/2010-11 AND ITA NO. 119/2010-11 RESPECTIVELY; FOR THE ASSESSMENT YEAR 2 007-08, CONFIRMING I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .997 & 998 997 & 998 997 & 998 997 & 998/M/ /M/ /M/ /M/12 1212 12 2 PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX A CT 1961 [IN SHORT THE ACT]. FOR CONVENIENCE AND BREVITY, WE TAKE UP I.T .A.NO. 997/MDS/2012 AS THE LEAD CASE. I.T.A.NO. 997/MDS/2012 : 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AD FILED RETURN FOR THE IMPUGNED ASSESSMENT YEAR ON 03.12.2007 AND ADMITTED INCOME OF ` .12,79,230/- ALONG WITH AGRICULTURAL INCOME OF ` .60,000/-. THEREAFTER THE ASSESSEE FILED A REVISED RETURN ON 04.06.2008. IT I S NOTICED FROM THE ASSESSMENT ORDER THAT THIS TIME AS WELL, THE TOTAL INCOME AND AGRICULTURAL INCOME REMAINED SAME. IN SCRUTINY PROCEEDINGS, THE ASSESSING OFFICER TOOK COGNIZANCE OF THE FACT THAT THE ASSESSEE HAD SOLD I MMOVABLE PROPERTY ON 30.11.2006, IN WHICH HE WAS HAVING SHARE AND THE OTHER SHARE BELONGED TO HIS BROTHER NAMELY SHRI C. VIJAYAKUMAR [ASSESSEES CONNECTED CASE I.T.A. NO. 998/MDS/2012] AND THE ASSESSEE IN H IS REVISED RETURN DATED 04.06.2008 HAD DECLARED THE SALE CONSIDERATION OF ` .28,54,200/- FOR THE PURPOSE OF COMPUTING CAPITAL GAINS. THE ASSESSING O FFICER NOTED FROM THE ITS DETAILS THAT THE IMMOVABLE PROPERTY WAS VALUED AT ` .95,40,000/-. THE ASSESSEE CLARIFIED BEFORE THE ASSESSING OFFICER THA T THE SAID VALUE AS NOTICED BY THE ASSESSING OFFICER WAS ONLY THE GUIDE LINE VALUE FOR THE PURPOSE OF STAMP FEES AND REGISTRATION. THE ASSESSI NG OFFICER DID NOT ACCEPT THE ASSESSEES EXPLANATION AND BY INVOKING SECTION 50C(2) OF THE ACT, I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .997 & 998 997 & 998 997 & 998 997 & 998/M/ /M/ /M/ /M/12 1212 12 3 ADOPTED DEEMED SALE CONSIDERATION AS ` .95,40,000/- AND WORKED OUT THE CAPITAL GAIN AS UNDER: ` . SALE CONSIDERATION 95,40,000 LESS: INDEXED COST (AS RETURNED) 24,89,065 70,50,935 50% SHARE OF THE ASSESSEE 35,25,468 THE CAPITAL GAINS IN RESPECT OF THE ABOVE PROPERTY IS ASSESSED AT ` .35,25,468 AGAINST ` .182568/ - RETURNED. TOTAL INCOME DECLARED BY THE ASSESSEE (OTHER THAN CAPITAL GAINS) 12,79,220 CAPITAL GAINS AS ABOVE 33,42,900 ASSESSED INCOME + AGRI. INCOME 46,22,121 60,000 SIMILARLY, NOTICE OF PENALTY UNDER SECTION 271(1)(C ) OF THE ACT WAS ALSO ISSUED TO THE ASSESSEE. THERE IS HARDLY ANY DISPUTE THAT THE ASSESSEE DID NOT FILE ANY APPEAL AGAINST THE ABOVE ASSESSMENT OR DER DATED 21.12.2009. 3. IN PENALTY PROCEEDINGS, THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT SECTION 50C HAS BEEN INVOKED IN THE AS SESSMENT PROCEEDINGS (SUPRA) WAS, IN FACT, A DEEMING PROVISION ONLY AND THERE HAD NOT BEEN ANY UNDERSTATEMENT OF THE ACTUAL CONSIDERATION AMOUNT R ECEIVED BY HIM FROM THE VENDEES IN QUESTION. PER ASSESSEE, MERELY BECAUSE O F SECTION 50C(2) OF THE ACT HAD BEEN INVOKED AND THE ASSESSEE DID NOT CHA LLENGE THE ASSESSMENT ORDER DID NOT MEAN THAT IT HAD NOT DISCLOSED THE AC TUAL CONSIDERATION RECEIVED. THE ASSESSING OFFICER DID NOT AGREE TO TH E SAID EXPLANATION TENDERED BY THE ASSESSEE. BY RELYING ON THE CASE LA W OF UOI AND OTHERS VS. DHARMENDRA TEXTILE PROCESSORS 306 ITR 277 (SC), THE ASSESSING OFFICER I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .997 & 998 997 & 998 997 & 998 997 & 998/M/ /M/ /M/ /M/12 1212 12 4 HELD THAT IMPUGNED PENALTY IS A CIVIL LIABILITY AND WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT. ACCORDINGLY, PENALTY ON A SUM OF ` .11,25,220/- WAS IMPOSED BY THE ASSESSING OFFICER VIDE ORDER DATED 1 6.06.2010. WE ALSO FIND THAT THE CIT(A) HAS FURTHER CONFIRMED THE PENALTY I MPOSED BY HOLDING AS FOLLOWS: 6. THE ASSESSING OFFICER IN HIS PENALTY ORDER HAS STATED THAT THE APPELLANT HAS FILED ORIGINAL RETURN OF INCOME ON 03 .12.2007 WHO HAS NOT DISCLOSED THE CAPITAL GAIN EARNED. THE APPELLAN T FILED A REVISED RETURN ON 04.06.2008 WHICH ITSELF IS NOT A VALID RE VISED RETURN AS THE ORIGINAL RETURN WAS NOT FILED WITHIN THE TIME LIMIT PRESCRIBED U/S 139(1). EVEN IN THE REVISED RETURN THE APPELLANT HAS SHOWN CAPITAL GAINS AT ` . 1,82,567 ON THE BASIS OF THE SALE CONSIDERATION STA TED TO BE ACTUALLY RECEIVED. THE ASSESSING OFFICER HAS MADE OUT A CLEA R CASE AGAINST THE APPELLANT BY STATING THAT HE HAS NOT DECLARED THE C APITAL GAINS IN THE ORIGINAL RETURN OF INCOME, WHICH ITSELF WAS NOT FIL ED WITHIN DUE DATE. THE ASSESSING OFFICER HAS ALSO REJECTED THE APPELLA NT'S CLAIM THAT HE IS INNOCENT OR IGNORANT' OF THE GUIDELINE VALUE ON THE GROUND THAT BEING A SELLER THE APPELLANT HIMSELF SIGNED THE DOCUMENTS I N THE PRESENCE OF REGISTERING AUTHORITY ON THE STAMP PAPER. THE VALUE OF THE PROPERTY SOLD BY THE APPELLANT IS DETERMINED ON THE GUIDELIN E VALUE OF THE PROPERTY AND IT IS INVARIABLY MENTIONED IN THE DOCU MENT ITSELF BEFORE THE REGISTRATION OF THE SALE DEED TAKES PLACE. 7. SECTION 50C IS A SPECIAL PROVISION INSERTED BY THE FINANCE ACT 2002 W.E.F. 01.04.2003 WITH A VIEW TO TACKLE UNACCO UNTED INCOME GENERATED BY THE UNDERSTATEMENT OF CONSIDERATION IN THE ACQUISITION OF PROPERTY. FOR WORKING OUT THE CAPITAL GAINS ON SALE OF IMMOVEABLE PROPERTY THE APPELLANT HAS TO ADOPT THE VALUE DETER MINED BY THE STAMP VALUATION AUTHORITY. THE ONLY OPTION AVAILABLE TO T HE APPELLANT IS TO FILE AN APPEAL IF THE VALUE IS CONSIDERED TO BE HIGHER O R REQUEST THE ASSESSING OFFICER TO REFER THE MATTER TO THE VALUAT ION OFFICER. SINCE THE ASSESSING OFFICER HAS NOT FOUND IT FIT TO REFER THE CASE TO DEPARTMENTAL VALUATION CELL EVEN THOUGH APPELLANT HAS MADE REQUE ST. HOWEVER, THE APPELLANT HAS NOT FILED ANY APPEAL AGAINST THE DECI SION TAKEN BY THE ASSESSING OFFICER. 8. THE ASSESSING OFFICER WHO PASSED THE PENALTY OR DER HAS STATED THAT IT IS THE RESPONSIBILITY OF THE APPELLANT TO D ECLARE CAPITAL GAINS TRANSACTION AS PER THE VALUE DETERMINED BY THE STAM P DUTY AUTHORITIES I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .997 & 998 997 & 998 997 & 998 997 & 998/M/ /M/ /M/ /M/12 1212 12 5 AND THE APPELLANT HAVING KNOWN THE VALUE OF THE PRO PERTY DETERMINED BY THE STAMP DUTY AUTHORITIES FULLY WELL, FAILED TO DECLARE CORRECTLY AND TRULY. THEREBY ASSESSING OFFICER HAS ARRIVED AT THE DECISION THAT THE APPET!ANT HAS CONCEALED THE PARTICULARS OF INCOME A RISING OUT OF CAPITAL GAINS COMPUTED ULS 50C OF THE ACT. THE ASSESSING OF FICER HAS ALSO RELIED ON UNION OF INDIA & ORS. VS 'DHARMENDRA TEXT ILE PROCESSORS' (306 ITR 271), WHEREIN IT WAS HELD THAT PENALTY ULS 271(L)(C) R.W.S. EXPLANATION INDICATE THAT THIS PROVISION IS A CIVIL LIABILITY AND WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTR ACTING CIVIL LIABILITY AS IS THE CASE IN THE MATTER OF PROSECUTION U/S 271 (1 )( C) IT WAS ALSO HELD THAT MENS REA IS NOT AN ESSENTIAL INGREDIENT O N THE PART OF THE APPELLANT TO ATTRACT PENALTY U/S 271(1)(C). THE ASS ESSING OFFICER HAS ALSO STATED FURTHER BUT FOR THAT INFORMATION OBTAIN ED FROM THE AIR DATA, CORRECT CAPITAL GAINS U/S 53 OF THE INCOME TAX ACT, 1961 WOULD HAVE ESCAPED ASSESSMENT AS THE APPELLANT HAS FAILED TO D ISCLOSE THE SAME EITHER IN ORIGINAL RETURN OF INCOME OR IN THE REVIS ED RETURN OF INCOME FILED SUBSEQUENTLY. THE APPELLANT HAS NOT VOLUNTARI LY BROUGHT TO THE NOTICE OF THE DEPARTMENT THAT THE VALUE FOR STAMP D UTY WAS HIGHER THAN THE CONSIDERATION DECLARED IN THE REGISTERED DEED. THE MAIN ISSUE IN THIS CASE IS THAT THE APPELLANT EVEN IN HIS REVISED RETURN HAS NOT SHOWN THE CORRECT VALUE OF THE PROPERTY DETERMINED UNDER SECTION 50C AND SHOWN ONLY LESSER CAPITAL GAIN WHICH TANTAMOUNTS TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. SINCE THE APPELLA NT HAS NOT AVAILED A GREAT OPPORTUNITY FOR SHOWING TRUE AND CORRECT VALU E OF THE PROPERTY AS DETERMINED U/S 50C EVEN IN THE REVISED RETURN OF IN COME FILED BY HIM WHICH SHOWED DELIBERATELY A LESSER SHORT TERM CAPIT AL GAIN AT ` .1,82,567. SINCE THE APPELLANT HAS MISSED THIS OPPO RTUNITY THE ACTION OF THE ASSESSING OFFICER IN ADOPTING THE VALUE OF T HE PROPERTY SOLD BY THE APPELLANT FOR WORKING OUT SHORT TERM CAPITAL GA IN AT L 33,42,900 U/S 50C OF THE INCOME TAX ACT, 1961 IS JUDICIOUS AND AP T AND THEREFORE THE ACTION OF THE ASSESSING OFFICER IN LEVYING PENALTY U/S 271(1)(C) IS CONFIRMED. THE OBJECTIONS FILED BY THE APPELLANT AR E REJECTED. 9. IN THE RESULT THE APPEAL IS DISMISSED. THEREFORE, THE ASSESSEE IS IN APPEAL. 4. REITERATING THE GROUNDS OF APPEAL RAISED, THE A R REPRESENTING THE ASSESSEE HAS VEHEMENTLY CONTENDED THAT THE CIT(A) H AS ERRED IN CONFIRMING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT ME RELY BECAUSE IN I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .997 & 998 997 & 998 997 & 998 997 & 998/M/ /M/ /M/ /M/12 1212 12 6 ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAD IN VOKED THE DEEMING PROVISION AS ENSHRINED IN SECTION 50C(2) OF THE AC T. IT IS THE CONTENTION OF THE AR THAT IN THE ABSENCE OF ANY SUBSTANTIVE ALLEG ATION THAT THE ASSESSEE RECEIVED ANY AMOUNT OVER AND ABOVE WHAT WAS STATED IN THE ASSESSMENT PROCEEDINGS, THE PRIMARY CONDITION OF FURNISHING FA LSE AND INACCURATE PARTICULARS AS MANDATED UNDER SECTION 271(1)(C) OF THE ACT DOES NOT STAND SATISFIED. TO BUTTRESS HIS PLEA, HE HAS ALSO SUBMIT TED COMPILATION OF FOLLOWING CASE LAW: SI.NO. PARTICULARS 1 SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION [ SECTION 50C] 2 FAILURE TO FURNISH RETURNS, COMPLY WITH NOTICES, CONCEALMENT OF INCOME, ETC. [SECTION 271] 3 DR. AJITH KUMAR PANDEY VS. INCO ME TAX APPELLATE TRIBUNAL 2008 - TIOL - 726 - HC - PATNA - IT 4 RENU HINGORANI VS. ACIT, RANGE, 19(3), MUMBAI ITA NO.2210/MUM/2010 5 SHRI. CHIMANLAL MANILAL PATEL VS. ACIT, SURAT ITA NO.508/AHD/2010 6 COMMISSIONER OF INCOME TAX, AHMEDABAD V S. RELIANCE PETROPRODUCTS PRIVATE LIMITED (2010) 11 SCC 762 7 DCIT, NEW DELHI VS. MIS. JAPFA COMFEED INDIA PRIVAT E LIMITED 2011 - TIOL - 703 - ITAT - DEL 8 MRS. ASHA BHARAT SHAH VS. ITO, MUMBAI 2011 - TIOL - 521 - ITAT - MUM 9 BHUPATLAL CHHAGANLAL JARIWALA-HUF VS. ACIT, SURAT 2011 - TIOL - 779 - ITAT - AHM 10 SMT. THULSI RAJKUMAR VS. ACIT, COIMBATORE 2010 - TIOL - 515 - ITAT - MAD 11 MIS. RUMANS INDUSTRIAL CHEMICAL CORPN VS. ACIT, MUM BAI 2009 - TIOL - 439 - IT AT - MUM 12 MIS. MEGHRAJ BAID VS. ITO MANU/IO/ 00 0312008 13 GLOBAL GREEN COMPANY LIMITED VS. DCIT, NEW DELHI ITANO.1390/DEL/2011 DURING THE COURSE OF HEARING, HE HAS ALSO PRESENTED COPY OF REPLY OF PENALTY I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .997 & 998 997 & 998 997 & 998 997 & 998/M/ /M/ /M/ /M/12 1212 12 7 NOTICE SUBMITTED BY THE ASSESSEE AS WELL AS THE SIT E PLAN OF THE PROPERTY SOLD TO CONTEND THAT THE BASIC REASON FOR SELLING THE PR OPERTY AT THROW AWAY PRICE WAS THAT THE PROPERTY, IN FACT, LAND LOCKED AND THE RE WERE NO BUYERS. ACCORDINGLY, HE PRAYED FOR ACCEPTANCE OF THE APPEAL . 5. THE DR REPRESENTING REVENUE HAS CHOSEN TO STRON GLY SUPPORT THE CIT(A)S ORDER AS WELL AS FINDINGS CONTAINED THEREI N. 6. WE HAVE HEARD BOTH SIDES AT LENGTH AND ALSO PER USED THE RELEVANT FINDINGS AS WELL AS CASE LAW REFERRED TO. THE MOOT ISSUE BEFORE US AS IT ARISES FOR CONSIDERATION IN THE INSTANT CASE IS WHE THER THE CIT(A) HAS RIGHTLY CONFIRMED THE PENALTY IMPOSED UNDER SECTION 271(1)( C) OF THE ACT BY THE ASSESSING OFFICER MERELY ON THE GROUND THAT AS PER THE GUIDELINE VALUE ADOPTED UNDER SECTION 50C(2) OF THE ACT, THE ACTU AL SALE PRICE OF THE ASSESSEES PROPERTY SOLD TURNED OUT TO BE LESS THAN GUIDELINE VALUE RESULTING IN ADDITION DURING ASSESSMENT PROCEEDINGS? 7. IT EMERGES FROM THE RECORD THAT THE ASSESSEE HA D FILED REVISED RETURN OF INCOME WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT BY THE ASSESSING OFFICER AND THE ASSESSMENT WAS FINALIZED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 21.12.2009 (SUPRA). THIS WHOLE CHRONOLOGY OF THE EVENTS MAKES IT CLEAR THAT THE ASSESSEES REVISED R ETURN STOOD DULY ACCEPTED AND FINALIZED BY THE ASSESSING OFFICER. THE ONLY AD DITION MADE BY THE ASSESSING OFFICER WAS THAT THE CONSIDERATION AS DIS CLOSED BY THE ASSESSEE QUA THE PROPERTY SOLD WAS FOUND TO BE LESS THAN THE GUIDELINE VALUE, WHICH I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .997 & 998 997 & 998 997 & 998 997 & 998/M/ /M/ /M/ /M/12 1212 12 8 WAS ` .95,40,000/- INSTEAD OF ` .28,54,200/- AS MENTIONED BY THE ASSESSEE. THE SAME ULTIMATELY LEAD TO THE ADDITION UNDER SECT ION 50C(2) (SUPRA). ON THE SAME BASIS, THE ASSESSING OFFICER ISSUED PENALT Y NOTICE, WHICH CULMINATED IN IMPOSITION OF PENALTY IN QUESTION. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAD RECEIVED ANY CONSIDER ATION OVER AND ABOVE WHAT WAS DISCLOSED. IN OUR OPINION, THE MERE FACT T HAT THE ASSESSING OFFICER HAD INVOKED SECTION 50C(2) OF THE ACT AND ADOPTED GUIDELINE VALUE FOR COMPUTING CAPITAL GAINS IGNORING WHAT WAS DISCLOSED BY THE ASSESSEE IPSO FACTO CANNOT BE THE SOLE BASIS FOR IMPOSING PENALTY . IT TRANSPIRES THAT THE ASSESSEE IS NOT GUILTY OF FURNISHING ANY FALSE AND INACCURATE PARTICULARS REGARDING THE VALUATION OF THE PROPERTY SOLD FOR TH E PURPOSE OF COMPUTING CAPITAL GAINS. WE NOTICE THAT IN CASE LAW OF RENU H INGORANI VS. ACIT (SUPRA), THE COORDINATE BENCH OF ITAT MUMBAI BENCH HAS HELD THAT PENALTY MERELY ON THE BASIS OF INVOKING SECTION 50C(2) OF THE ACT CANNOT BE SUSTAINED. THE RELEVANT PORTION OF THE ORDER IS HEREBY REPRODUCED AS UNDER: 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND R ELEVANT RECORD. WE FIND THAT THE AO HAD MADE ADDITION OF RS.9,00,82 4/- BEING DIFFERENCE BETWEEN THE SALE CONSIDERATION AS PER SA LE AGREEMENT AND THE VALUATION MADE BY THE STAMP VALUATION AUTHORI TY. THUS, THE ADDITION HAS BEEN MADE BY THE AO BY APPLYING THE PR OVISIONS OF SECTION 50C OF THE ACT. IT IS EVIDENT FROM THE ASSESSMENT O RDER THAT THE AO HAS QUESTIONED THE ACTUAL CONSIDERATION RECEIVED BY THE ASSESSEE BUT THE ADDITION IS MADE PURELY ON THE BASIS OF DEEMING PRO VISIONS OF THE INCOME TAX ACT, 1961. THE AO HAS NOT GIVEN ANY FIN DING THAT THE ACTUAL SALE CONSIDERATION IS MORE THAN THE SALE CON SIDERATION ADMITTED AND MENTIONED IN THE SALE AGREEMENT. THUS IT DOES N OT AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. IT IS ALSO NOT THE CASE OF THE REVENUE THAT THE ASS ESSEE HAS FAILED TO I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .997 & 998 997 & 998 997 & 998 997 & 998/M/ /M/ /M/ /M/12 1212 12 9 FURNISH THE RELEVANT RECORD AS CALLED BY THE AO TO DISCLOSE THE PRIMARY FACTS. THE ASSESSEE HAS FURNISHED ALL THE RELEVANT FACTS, DOCUMENTS/ MATERIAL INCLUDING THE SALE AGREEMENT AND THE AO HA S NOT DOUBTED THE GENUINENESS AND VALIDITY OF THE DOCUMENTS PRODUCED BEFORE HIM AND THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE. UNDER THESE FACTS AND CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT FURNISHED CORRECT PARTICULARS OF INCOME. MERELY BECAUSE THE ASSESSEE AGREED FOR ADDITION ON THE BASIS OF VALUATION MADE BY THE STAM P VALUATION AUTHORITY WOULD NOT BE A CONCLUSIVE PROOF THAT THE SALE CONSIDERATION AS PER THIS AGREEMENT WAS INCORRECT AND WRONG. ACCO RDINGLY THE ADDITION BECAUSE OF THE DEEMING PROVISIONS DOES NOT IPSO FACTO ATTRACT THE PENALTY U/S 271(1)(C ). HENCE IN VIEW OF THE DE CISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V/S RELIANCE PETR OPRODUCTS PVT.LTD (SUPRA), THE PENALTY LEVIED U/S 271(1)( C ) IS NOT SUSTAINABLE. THE SAME IS DELETED. 9. THE APPEAL OF THE ASSESSEE IS ALLOWED. THE SAME LAW HAS BEEN REITERATED IN CASES CITED BY THE ASSESSEE NAMELY SHRI CHIMANLAL MANILAL PATEL VS. ACIT AND DC IT VS. M/S. JAPFA COMFEED INDIA PRIVATE LIMITED (SUPRA). 8. ALTHOUGH NOT CITED BY ANY OF THE PARTIES, WE AL SO DEEM IT APPROPRIATE TO REFER HERE THE CASE LAW OF THE HONBLE SUPREME C OURT AS REPORTED IN K.V. VARGHESE VS. ITO (1981) 131 ITR 597, WHEREIN IT HEL D THAT FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS UNDER SECTION 52 OF TH E ACT, IT HAS TO BE NECESSARILY PROVED THAT THE ASSESSEE HAD RECEIVED T HE AMOUNT MORE THAN WHAT IS DECLARED OR DISCLOSED AS CONSIDERATION. THE IR LORDSHIPS HAD ALSO BEEN PLEASED TO OBSERVE THAT THE BURDEN ON SUCH CAS ES IS ON THE REVENUE. WHEN WE APPLY THE RATIO OF THE ABOVE SAID CASE LAW QUA THE FACTS OF THE PRESENT CASE, WE FIND THAT THERE IS NO ALLEGATION A GAINST THE ASSESSEE OF ANY UNDERSTATEMENT OF THE VALUE OF THE PROPERTY SOLD. H ENCE, WE HOLD THAT I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .997 & 998 997 & 998 997 & 998 997 & 998/M/ /M/ /M/ /M/12 1212 12 10 SECTION 50C(2) IS ONLY A DEEMING PROVISION WHICH CA NNOT BE TAKEN AS TO BE AN UNDERSTATEMENT FOR THE PURPOSE OF IMPOSING PENAL TY. 9. NOW WE COME TO THE OBSERVATION OF THE CIT(A) RE LYING CASE LAW OF DHARMENDRA TEXTILE PROCESSORS (SUPRA). IT IS OBSERV ED THAT THE HONBLE BOMBAY HIGH COURT IN CASE OF CIT VS. M/S. ADITYA BI RLA NOVA LIMITED VIDE JUDGMENT DATED 14.08.2012 IN INCOME TAX APPEAL NO. 3899 OF 2010 HAS DISTINGUISHED THE RATIO OF THE CASE LAW OF DHARMEND RA TEXTILE PROCESSORS (SUPRA) BY HOLDING AS UNDER: 10. IN SUPPORT OF HIS SUBMISSION, MR.MALHOTRA RELI ED UPON THE FOLLOWING OBSERVATIONS OF THE SUPREME COURT IN UNIO N OF INDIA & ORS.VS. DHARMENDRA TEXTILE PROCESSORS & ORS. (2008) 13 SCC 369 =(2008) 306 ITR 277 :- 17. IT IS OF SIGNIFICANCE TO NOTE THAT THE CONCEPTUAL A ND CONTEXTUAL DIFFERENCE BETWEEN SECTION 271(1)(C) AND SECTION 276-C OF THE IT ACT WAS LOST SIGHT OF IN DILIP SHRO FF CASE. 18. THE EXPLANATIONS APPENDED TO SECTION 271(1)(C) OF T HE IT ACT ENTIRELY INDICATES THE ELEMENT OF STRICT LIABIL ITY ON THE ASSESSEE FOR CONCEALMENT OR FOR GIVING INACCURATE P ARTICULARS WHILE FILING RETURN. THE JUDGMENT IN DILIP N. SHROF F CASE HAS NOT CONSIDERED THE EFFECT AND RELEVANCE OF SECTION 276- C OF THE IT ACT. OBJECT BEHIND ENACTMENT OF SECTION 271(1)(C) R EAD WITH EXPLANATIONS INDICATE THAT THE SAID SECTION HAS BEE N ENACTED TO PROVIDE FOR A REMEDY FOR LOSS OF REVENUE. THE PENAL TY UNDER THAT PROVISION IS A CIVIL LIABILITY. WILFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS IS THE CASE IN THE MATTER OF PROSECUTION UNDER SECTION 276-C OF TH E IT ACT. 19. IN UNION BUDGET OF 1996-1997, SECTION 11-AC OF THE ACT WAS INTRODUCED. IT HAS MADE THE POSITION CLEAR THAT THE RE IS NO SCOPE FOR ANY DISCRETION. IN PARA 136 OF THE UNION BUDGET REFERENCE HAS BEEN MADE TO THE PROVISION STATING THAT THE LEV Y OF PENALTY IS A MANDATORY PENALTY. IN THE NOTES ON CLAUSES ALSO T HE SIMILAR INDICATION HAS BEEN GIVEN. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .997 & 998 997 & 998 997 & 998 997 & 998/M/ /M/ /M/ /M/12 1212 12 11 11. THE JUDGMENT DOES NOT SUPPORT MR.MALHOTRAS SU BMISSION THAT EVEN IF AN ASSESSEE HAS DISCLOSED ALL THE PARTICULA RS OF HIS INCOME AND HAS NOT FURNISHED INACCURATE PARTICULARS OF HIS INC OME, IT IS MANDATORY UPON THE ASSESSING OFFICER TO LEVY PENALTY UNDER SE CTION 271(1)(C) IF A CLAIM IS MADE WHICH IS HELD TO BE UNSUSTAINABLE IN LAW. THE SUPREME COURT MERELY STATED THAT WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING A CIVIL LAW LIABILITY UND ER SECTION 271(1)(C) READ WITH THE EXPLANATION THERETO. IN OTHER WORDS, ALL THAT THE JUDGMENT HOLDS IS THAT THE CONCEALMENT NEED NOT BE WILLFUL T O ATTRACT PENALTY. HOWEVER TO ATTRACT THE PROVISIONS OF SECTION 271, T HE ASSESSEE MUST BE HELD TO HAVE CONCEALED THE MATERIAL PARTICULARS OR TO HAVE FURNISHED INACCURATE PARTICULARS. AT THE COST OF REPETITION I N THE PRESENT CASE, THERE WAS NO CONCEALMENT OF ANY MATERIAL PARTICULAR S BY THE RESPONDENT. NOR DID THE RESPONDENT FURNISH INACCURA TE PARTICULARS. THE RESPONDENT DISCLOSED ALL MATERIAL PARTICULARS AND O N THE BASIS THEREOF, MADE CERTAIN CLAIMS WHICH HAVE BEEN FOUND PURELY AS A QUESTION OF LAW TO BE NOT SUSTAINABLE. IN THE PRESENT CASE, EXPLANATION 1(B) IS INAPPLICAB LE. THIS IS IN VIEW OF THE FACT THAT IT IS AN ADMITTED POSITION THAT THE R ESPONDENT HAS NEITHER CONCEALED ANY PARTICULARS OF INCOME NOR FURNISHED I NACCURATE PARTICULARS OF INCOME. EXPLANATION 1(B) WOULD APPLY ONLY WHERE AN ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOM E OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME. EXPLANATION 1(B) PROVIDES THAT IN SUCH CASES IF THE REASONS GIVEN FOR THE CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME ARE FOUND TO BE UN SUBSTANTIATED OR NOT BONA-FIDE, THE AMOUNT ADDED OR DISALLOWED IN COMPUT ING THE TOTAL INCOME WOULD REPRESENT INCOME IN RESPECT OF WHICH P ARTICULARS HAVE BEEN CONCEALED. AFTER PERUSING THE ABOVE SAID JUDGMENT OF THE HON BLE BOMBAY COURT, THERE IS HARDLY ANY ISSUE LEFT AS TO WHETHER THE SA ID CASE LAW OF DHARMENDRA TEXTILE PROCESSORS (SUPRA) IS APPLICABLE QUA THE IN STANT CASE OR NOT AS NOW, IT STANDS CONCLUDED THAT CONCEALMENT NEED NOT BE WI LLFUL TO ATTRACT PENALTY. HOWEVER, TO ATTRACT IMPOSITION OF PENALTY, THE ASSE SSEE MUST BE HELD TO HAVE CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCU RATE PARTICULARS. IN THE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .997 & 998 997 & 998 997 & 998 997 & 998/M/ /M/ /M/ /M/12 1212 12 12 INSTANT CASE, AS WE HAVE ALREADY OBSERVED HEREIN AB OVE, THERE ARE NO SUCH ALLEGATIONS AGAINST THE ASSESSEE. 10. IN THE LIGHT OF THE ABOVE DISCUSSIONS, WE HOLD THAT THE ASSESSEES REVISED RETURN STOOD DULY ACCEPTED AS A VALID RET URN AND THE ASSESSMENT WAS COMPLETED (SUPRA) AND MERELY BECAUSE THE ASSESS ING OFFICER INVOKED SECTION 50C(2) AND ADOPTED GUIDELINE VALUE TO BE TH E ACTUAL SALE CONSIDERATION AND MADE ADDITION IN THE ASSESSEES I NCOME AUTOMATICALLY BECOME A CASE ATTRACTING PENALTY UNDER SECTION 271( 1)(C) OF THE ACT. THEREFORE, WE HOLD THAT THE CIT(A) HAS ERRED IN CON FIRMING THE PENALTY IMPOSED BY THE ASSESSING OFFICER. HENCE, WE ACCEPT THE ISSUE IN FAVOUR OF THE ASSESSEE AND ALLOW THE INSTANT APPEAL. 11. SINCE BOTH THE REPRESENTATIVES AD IDEM WITH TH E ISSUE IS SAME IN I.T.A. NO. 998/MDS/2012 AS WELL, THIS APPEAL ALSO STANDS A CCEPTED. TO SUM UP I.T.A. NO. 997 AND 998/MDS/2012 ARE ALLOW ED. ORDER PRONOUNCED ON FRIDAY, THE 12 TH OF OCTOBER, 2012 AT CHENNAI. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER CHENNAI, DATED, THE 12.10.2012 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.