The ITO, Ward-7(3), Ahmedabad V. Sangitaben Vishnubhai Prajapati, Ahmedabad

ITSSA 45/AHD/2014

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3233 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-04-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 17-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K PATEL
• Assessee Lawyers: PF JAIN
• Keywords: Capital asset

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH A BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ IT(SS)A NO.45/AHD/2014 / ASSTT. YEAR: 2006-2007 ITO, WARD-7(3) AHMEDABAD. VS. SANGITABEN VISHNUBHAI PRAJAPATI 27, SHANKARNAGAR SOCIETY NR. S.B. TRUST WADI NEW WADAJ AHMEDABAD 380 013. PAN : ABVPP 8911 B / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI N.K. PATEL, SR.DR ASSESSEE BY : SHRI P.F. JAIN, AR ! / DATE OF HEARING : 20/04/2017 '#$ ! / DATE OF PRONOUNCEMENT: 5/05/2017 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST OR DER OF LD.CIT(A)-III, AHMEDABAD DATED 11.10.2013 PASSED FO R THE ASSTT.YEAR 2006-07. 2. THOUGH THE REVENUE HAS TAKEN FIVE GROUNDS OF APP EAL, BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE VIZ. THE L D.CIT(A) HAS ERRED IN DELETING PENALTY OF RS.11,00,180/- WHICH WAS IMPOSE D BY THE AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. IT(SS)A NO.45 /AHD/2014 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE AL ONG WITH TWO OTHER CO-OWNERS HAS SOLD A PLOT OF LAND BEARING BLOCK NO. 510. DURING THE COURSE OF SEARCH CARRIED OUT AT THE PREMISES OF PRAJAPATI GROUP ON 8.12.2010, IT REVEALED THAT ACTUAL SALE CONSIDERATI ON OF THIS PLOT WAS RS.1,50,32,800/-. ACCORDINGLY, THE ASSESSEE HAS DI SCLOSED HER SALE CONSIDERATION AT RS.49,44,469/- AS LONG TERM CAPITA L GAIN. THE AO HAS ACCEPTED RETURN OF THE ASSESSEE, BUT INITIATED PENA LTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT ON THE GROUND THAT IN ORIGINAL RETURN OF INCOME, THE ASSESSEE DID NOT OFFER THIS GAIN. ULTI MATELY, THE AO HAS IMPOSED PENALTY OF RS.11,00,180/-. ON APPEAL, THE LD.CIT(A) HAS DELETED THE PENALTY BY OBSERVING AS UNDER: 6. A COPY OF SUBMISSIONS WAS ALSO FORWARDED TO AO AND HE WAS ASKED TO FURNISH A REMAND REPORT. AO FURNISHED HIS REMAND REPORT VIDE HIS LETTER NO.DCIT/CC-2(2)/REMAND REPORT/2013-13 DATED 7/10/2013 IN WHICH HE STATED THAT 'IN THIS CONTEXT, THIS IS TO INFORM YOU THAT A LETT ER WAS SENT TO THE AHMEDABAD MUNICIPAL COMMISSIONER ON 2/08/2013 SEEKI NG INFORMATION ABOUT THE FOLLOWING PROPERTIES WHETHER IT FALLS UNDER THE MUNICIPAL LIMIT OFAHMEDABAD/GANDHINAGAR SR.NO. DESCRIPTION OF PROPERTY 1. BLOCK NO. 504, AT THE SIM OFBHADAJ, MOJE BHADA], TAL. DASKROI, DIST: AHMEDABAD 2. BLOCK NO.510, AT THE SIM OF BHADAJ, MOJE BHADAJ, TAL. DASKROI, DIST: AHMEDABAD IN REPLY, THE ESTATE OFFICER, OFFICE OF THE AHMEDAB AD MUNICIPAL CORPORATION, AHMEDABAD VIDE HIS LETTER DATED 10/09/2013 HAS CERTIFIED THAT ACCORDING TO GOVT. NOT IFICATION NO.KV/211/2006/ AMN/902006/410/P DATED 20/07/2006 T HE ABOVE MENTIONED PROPERTIES FALLS UNDER THE LIMIT OF AHMED ABAD MUNICIPAL CORPORATION. COPY OF LETTER ENCLOSED HEREWITH FOR Y OUR HONOUR'S KIND PERUSAL. 7. AS PER THE CERTIFICATE OF AHMEDABAD MUNICIPAL CO RPORATION IT IS CLEAR THAT THE SAID PIECE OF LAND WAS BROUGHT WITHI N THE LIMITS OF AHMEDABAD MUNICIPAL CORPORATION W.E.F 20TH JULY, 20 06 ONLY. IN SUCH IT(SS)A NO.45 /AHD/2014 3 A SITUATION, APPELLANT HAS RIGHTLY CLAIMED THAT ON THE DATE OF SALE, THE SAID PIECE OF LAND WAS NOT A CAPITAL ASSET AND THER EFORE NO INCOME WAS CHARGEABLE IN RESPECT OF CAPITAL GAIN ON THE SAME. THE RETURN WAS FILED BY THE APPELLANT UNDER ERRONEOUS IMPRESSION OF LAW. I THEREFORE HOLD THAT THIS IS NOT A SUITABLE CASE FOR LEVY OF PENALT Y U/S. 271(L)(C) OF THE I.T. ACT. PENALTY LEVIED BY AO OF RS.11,00,180/- IS DIRECTED TO BE DELETED. GROUND NO.L OF THE APPEAL IS THUS ALLOWED. 4. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. A PERUSAL OF REMAND REPORT AND DISCUSSION MADE BY THE AO WOULD INDICATE THAT THE LAND WHICH W AS SOLD BY THE ASSESSEE WAS AN AGRICULTURE LAND. IT WAS NOT A CAP ITAL ASSET AT THAT POINT OF TIME. IT WAS INCLUDED IN URBAN AREA ON 20 .7.2006. THEREFORE, THERE WAS NO CAPITAL GAIN TAX LIABILITY UPON THE AS SESSEE. EVEN IF SHE HAS ERRONEOUSLY DECLARED THIS CAPITAL GAIN IN THE R ETURN OF INCOME, WHICH HAS BEEN ASSESSED BY THE AO, IT DOES NOT MEAN THAT SHE HAS SURRENDERED HER RIGHT TO CHALLENGE FROM ASSESSABILI TY OF THE INCOME FOR ABSOLVING HERSELF FROM THE RIGOURS OF PENALTY. THE LD.CIT(A) HAS RIGHTLY APPRECIATED FACTS AND CIRCUMSTANCES AND HAS RIGHTLY OBSERVED THAT EVEN THE CONSIDERATION WAS NOT ASSESSABLE AS INCOME OF T HE ASSESSEE, BECAUSE ALLEGED CAPITAL ASSET SOLD BY THE ASSESSEE WAS NOT A CAPITAL ASSETS BEING AGRICULTURE LAND. THUS, NO PENALTY CO ULD BE IMPOSED UPON THE ASSESSEE. WE DO NOT FIND ANY MERIT IN THE APPE AL OF THE REVENUE. IT IS DISMISSED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 5 TH MAY, 2017 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 05/05/2017