ITO, Bangalore v. Sri Vemanna Reddy, Bangalore

ITA 1128/BANG/2009 | 1998-1999
Pronouncement Date: 13-04-2010 | Result: Dismissed

Appeal Details

RSA Number 112821114 RSA 2009
Bench Bangalore
Appeal Number ITA 1128/BANG/2009
Duration Of Justice 4 month(s) 11 day(s)
Appellant ITO, Bangalore
Respondent Sri Vemanna Reddy, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 13-04-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 13-04-2010
Assessment Year 1998-1999
Appeal Filed On 02-12-2009
Judgment Text
PAGE 1 OF 5 ITA NO.1128/BANG/2009 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE DR. O K NARAYANAN VICE PRESIDENT AND SHRI GEORGE GEORGE K. J.M. ITA NO.1128/BANG/09 (ASST. YEAR 1998-99) THE INCOME TAX OFFICER WARD-7(3) BANGALORE. - APPELLANT VS SHRI VEMANNA REDDY #5 RUBY NEST S R LAYOUT MURUGESHPALYA BANGALORE. - RESPONDENT APPELLANT BY : SMT. JACINTA ZIMIK VASHAI ADDL. CIT RESPONDENT BY : SHRI L SRIDHAR C.A. O R D E R PER GEORGE GEORGE K : THIS APPEAL OF THE REVENUE IS FILED IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-III BANGALORE DATE D 20.1.2009. THE RELEVANT ASST. YEAR IS 1998-99. THE ORDER OF T HE CIT(A) EMANATES FROM THE ORDER OF THE ASSESSING OFFICER PA SSED U/S 271(1)(C) OF THE I T ACT. 2. THE EFFECTIVE GROUND RAISED READS AS FOLLOWS:- THE CIT(A) ERRED IN DELETING PENALTY OF RS.9 54 080 /- LEVIED U/S 271(1)(C) OF THE I T ACT ON THE BASIS OF THE ORDER OF THE HON'BLE ITAT IN ITA NO.3815/BANG/2004 DATED 7.12.2007 DELETING THE ADDITION WHICH FORMED THE BASIS OF IMPOSITION OF PENALTY WITHOUT APPRECIA TING PAGE 2 OF 5 ITA NO.1128/BANG/2009 2 THE FACT THAT THE SAID ORDER HAD NOT BECOME FINAL A S THE SAME WAS APPEALED AGAINST THE HON'BLE HIGH COURT BY THE REVENUE U/S 260A. 3. THE ASSESSEE A HUF PURSUANT TO A 148 NOTICE HAS FILED THE RETURN OF INCOME ON 22.5.2000. IN THE RE TURN OF INCOME THE ASSESSEE HAD SHOWN INCOME FROM THE FOLLOWING HE ADS:- 1. INCOME FROM HOUSE PROPERTY RS.18 800/- 2. LONG TERM CAPITAL GAINS RS.1 79 203/- 3. INCOME FROM OTHER SOURCES (SB INTEREST) RS. 202/- THE FACTS IN REFERENCE TO THE COMPUTATION OF LONG T ERM CAPITAL GAINS ARE AS FOLLOWS:- 3.1 THE ASSESSEE HAD RECEIVED A TOTAL CONSIDERATIO N OF RS.59 94 000/- (RS.12 44 000/- IN CASH + RS.47 50 0 00/- IN KIND I.E. BY WAY OF 10 FLATS) ON ACCOUNT OF SALE OF PROPERTY TO A BUILDER. CAPITAL GAINS WAS WORKED OUT AT RS.55 39 603/- AFTE R REDUCING THE INDEX COST OF ACQUISITION OF RS.4 54 397/-. THE AS SESSEE HAD CLAIMED EXEMPTION U/S 54 AMOUNTING TO RS.53 60 400/ -. THE BALANCE OF RS.1 79 000/- (RS.55 39 603 RS.53 60 4 00) WAS OFFERED TO TAX AS LONG TERM CAPITAL GAINS. THE ASS ESSING OFFICER ISSUED NOTICE U/S 148 AND ASSESSMENT U/S 143(3) R.W .S. 147 WAS COMPLETED VIDE HIS ORDER DATED 27.3.2002. IN THE R E-ASSESSMENT SO COMPLETED THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE HAD TRANSFERRED A VACANT LAND AND THERE WAS NO HOUSE ON SUCH LAND AND THEREFORE HE WAS DENIED THE BENEFIT OF DEDUCTION U /S 54 OF THE ACT. PAGE 3 OF 5 ITA NO.1128/BANG/2009 3 CONSEQUENT TO DISALLOWANCE OF CLAIM OF DEDUCTION U/ S 54 OF THE ACT AMOUNTING TO RS.53 60 400/- THE ASSESSING OFFICER TAXED THE ENTIRE AMOUNT OF RS.55 39 603/- AS LONG TERM GAIN INSTEAD OF RS.1 29 203/- AS CLAIMED BY THE ASSESSEE. 4. ON FURTHER APPEAL THE FIRST APPELLATE AUTHORIT Y PARTLY ALLOWED THE PLEA OF THE ASSESSEE BY HOLDING THUS:- 'ON A CONSIDERATION OF THE FACTS OF THE CASE I AM OF THE VIEW THAT THERE WAS NO DOUBT THAT PROPERTY CONSISTED OF LAND WITH STRUCTURE...' AND FURTHER HELD THAT 'THE DEDUCTION U/S 54 CANNOT BE DENIED TO THE ASSESSEE ON THIS GROUND'. 4.1 THE CIT(A) FURTHER HELD THAT DEDUCTION U/S 54 IS TO BE ALLOWED IN RESPECT OF ONLY ONE FLAT AND NOT ON ALL THE 10 FLATS RECEIVED BY THE ASSESSEE FROM THE BUILDER. CONSEQU ENT TO GIVING EFFECT TO THE CIT(A)'S ORDER ADDITION ON ACCOUNT O F LONG TERM CAPITAL GAINS TO THE EXTENT OF RS.47 70 400/- WAS C OMPUTED AND TAX PAYABLE WAS DETERMINED AT RS.9 54 080/-. SUBSEQUEN T TO THE CIT(A)'S ORDER THE ASSESSING OFFICER INITIATED PEN ALTY U/S 271(1)(C) AND AN AMOUNT OF RS.9 54 080/- WAS IMPOSED AS PENAL TY VIDE ORDER DATED 31.5.2005 5. AGGRIEVED BY THE ORDER OF PENALTY THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). PAGE 4 OF 5 ITA NO.1128/BANG/2009 4 6. BEFORE THE CIT(A) IT WAS CONTENDED THAT THE TR IBUNAL HAD DELETED THE COMPUTATION OF CAPITAL GAINS FOR T HE CONCERNED ASST. YEAR NAMELY 1998-99 AND CONSEQUENTLY THE BASIS FO R IMPOSITION OF PENALTY IS NO LONGER IN EXISTENCE AND THE SAME IS T O BE DELETED. THE FIRST APPELLATE AUTHORITY AFTER PERUSING THE TRIBUN AL'S ORDER IN QUANTUM ASSESSMENT (ITA NO.3815/BANG/2004 DATED 7.1 2.2007) DELETED PENALTY LEVIED BY HOLDING THUS:- 'WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORDS. IT IS PERTINENT TO NOTE THAT IN ALL THE AFORESAID RETURNS FILED THE LEARNED DR POINTED OUT THAT THE ASSESSEE HAD OFFERED INCOME FROM HOUSE PROPERTY NAMELY FLATS RECEIVED BY HIM FROM THE DEVELOPER AND THE SAME HAS BEEN ACCEPTED BY THE DEPARTMENT. THEREFORE THE ASSESSEE CANNOT NOW TAKE A STAND THAT THE ASSESSMENT MADE IN THE STATUS OF AN HUF AND HENCE THIS GROUND FAILS'. 7. THE REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US. 8. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL ON RECORD. WE FIND FROM THE QUANTUM ASSES SMENT THE ADDITION MADE ON ACCOUNT OF LONG TERM CAPITAL GAINS HAS BEEN DELETED FOR THE CONCERNED ASST. YEAR BY TRIBUNAL IN ITS ORDER DATED 7.12.2007. THE PENALTY AMOUNTING TO RS. 9 54 080/ - HAS BEEN IMPOSED BASED ON THE ADDITION MADE IN THE QUANTUM A SSESSMENT SINCE THE ADDITION IN THE QUANTUM ASSESSMENT ARE DE LETED. WE FIND THE ORDER OF CIT(A) IS CORRECT IN CANCELING PENALTY U/S 271(1)(C) AND HENCE NO INTERFERENCE IS CALLED FOR. PAGE 5 OF 5 ITA NO.1128/BANG/2009 5 9. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. THE ORDER IS PRONOUNCED ON 13TH APRIL 2010. SD/- SD/- (DR. O K NARAYANAN) (GEORGE GEORGE K) VICE PRESIDENT JUDICIAL MEMBER BANGALORE DTD.13/4/2010 COPY TO : 1) THE ASSESSEE (2) THE REVENUE (3) TH E CIT(A) CONCERNED. (4) THE CIT CONCERNED. (5) THE DR (6) GUARD FILE. (7) GUARD FILE NEW DELHI. MSP/13.4 BY ORDER ASST. REGISTRAR ITAT BANGALORE.