RENU HINGORANI, MUMBAI v. ACIT 19(3),

ITA 2210/MUM/2010 | 2006-2007
Pronouncement Date: 22-12-2010 | Result: Allowed

Appeal Details

RSA Number 221019914 RSA 2010
Assessee PAN AALPH7223B
Bench Mumbai
Appeal Number ITA 2210/MUM/2010
Duration Of Justice 9 month(s) 3 day(s)
Appellant RENU HINGORANI, MUMBAI
Respondent ACIT 19(3),
Appeal Type Income Tax Appeal
Pronouncement Date 22-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 22-12-2010
Assessment Year 2006-2007
Appeal Filed On 19-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI R.S.SYAL ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO JUDICIAL MEMBER ITA NO. 2210/MUM/2010 (ASSESSMENT YEARS: 2006-07) RENU HINGORANI 7A JEEVAN JAGRITI DR AMBEDKAR ROAD BANDRA (W) MUMBAI-400050. PAN: AALPH7223B . APPELLANT VS ACIT RANGE 19(3) MUMBAI. RESPONDENT ASSESSEE BY : SHRI VIPUL JOSHI RESPONDENT BY : SHRI JITENDRA YA DAV. O R D E R PER VIJAY PAL RAO JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 9.12.2009 OF CIT(A) ARISING FROM THE PE NALTY ORDER DATED 26.3.2009 PASSED UNDER SECTION 271(1)(C ) OF THE ACT FOR THE ASSESSMENT YEAR 2006-07. 2. ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS THE LD. CIT(A) ERRED IN UPHOLDING LEVY OF PENALTY U/S 271(1)(C) ON ADDITION ARISING U/S 50C ITA NO. 2210/MUM/2010 (ASSESSMENT YEARS: 2006-07) 2 3. FACTS LEADING TO THIS PENALTY ARE THAT DURING TH E YEAR UNDER CONSIDERATION THE ASSESSEE SOLD TWO FLATS BE ARING NO.101 AND 102 AT MANGALGYAN AND ONE FLAT AT NAVME GHDOOT. AS FAR AS THE SALE CONSIDERATION FOR THE TWO FLATS AT MANGALGYAN IS CONCERNED THE SAME WAS MORE THAN THE VALUE FOR STAMP VALUATION . HOWEVER THE SALE CONSIDERATI ON FOR THE FLAT AT NAVMEGHDOOT HAS BEEN SHOWN AT RS.63 LAKH S. WHEREAS THE STAMP VALUATION OF THE SAID FLAT WAS AT RS.72 00 824/-. THUS THERE WAS A DIFFERENCE OF RS .9 00 824/-. THE AO ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY T HIS DIFFERENCE SHOULD NOT BE DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEES REPR ESENTATIVE HAD AGREED FOR THE SAME AND ACCORDINGLY THE SAID SU M OF RS.9 00 824/- HAS BEEN DISALLOWED AS INCOME OF THE ASSESSEE AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE BY A PPLYING THE PROVISIONS OF SECTION 50C OF THE ACT. 4. THE AO CONSEQUENTLY INITIATED PENALTY PROCEEDING S U/S 271(1) ( C ) AND LEVIED THE PENALTY OF RS.198181/- AT 100% OF THE TAX SOUGHT TO BE EVADED VIDE ORDER DATED 20.3.2 009. 5. THE ASSESSEE CHALLENGED THE LEVY OF PENALTY BEF ORE THE CIT(A) WHO CONFIRMED THE ACTION OF THE AO BY DISMIS SING THE APPEAL OF THE ASSESSEE. ITA NO. 2210/MUM/2010 (ASSESSMENT YEARS: 2006-07) 3 6. BEFORE US THE LEARNED AR OF THE ASSESSEE HAS SU BMITTED THAT MERELY BECAUSE THE ASSESSEE AGREED FOR ADDITI ON PENALTY SHOULD NOT BE LEVIED UNLESS AND UNTIL THERE IS A C ONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF I NCOME. THE ASSESSEE HAS ADMITTED THE SALE CONSIDERATION OF THE FLAT IN QUESTION WHICH IS LESS THAN THE STAMP DUTY VALUATIO N. THE LEARNED AR FURTHER SUBMITTED THAT THE ASSESSEE HAS ADMITTED THE SALE CONSIDERATION AS PER THE ACTUAL SALE CONSI DERATION RECEIVED BY THE ASSESSEE AND THEREFORE THERE IS NO QUESTION OF FURNISHING INACCURATE PARTICULARS OF INCOME OR CONC EALMENT OF INCOME. THE AO HAS APPLIED THE DEEMING PROVISION S OF SECTION 50C OF THE ACT AND MADE THE ADDITION BEING DIFFERENCE BETWEEN THE SALE CONSIDERATION AS PER THE SALE AGRE EMENT AND THE VALUATION MADE BY STAMP VALUING AUTHORITY. H E HAS FURTHER CONTENDED THAT THE VALUATION BY THE STAMP VALUING AUTHORITY IS NOT A CONCLUSIVE EVIDENCE OF ACTUAL FA IR MARKET VALUE OF THE PROPERTY AND THEREFORE NO PENALTY CA N BE LEVIED AGAINST THE ADDITION MADE BY APPLYING THE DEEMING P ROVISIONS OF LAW. HE HAS RELIED UPON THE VARIOUS DECISIONS ON THE POINT OF AGREED ADDITION AND SUBMITTED THAT AGREED ADDITI ON DOES NOT WARRANT PENALTY AUTOMATICALLY. SALES VALUATION A DOPTED AS PER THE STAMP VALUATION AUTHORITY AND GIVING RISE T O THE ADDITION DOES NOT WARRANT PENALTY. THE LEARNED AR ALSO RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V/S RELIANCE PETROPRODUCTS PVT.LTD REPORTE D IN 322 ITA NO. 2210/MUM/2010 (ASSESSMENT YEARS: 2006-07) 4 ITR 158(SC) AND SUBMITTED THAT MERELY BECAUSE TH E CLAIM OF THE ASSESSEE WAS NOT ALLOWED BY APPLYING THE PROVIS IONS OF LAW DOES NOT ATTRACT THE PENALTY U/S 271(1)( C ). THE LD. AR SUBMITTED THAT EXPLAINING THE RELEVANT FACT INCLUDE S THE PRODUCTION OF THE RECORD SHOWING ACTUAL SALE CON SIDERATION RECEIVED BY THE ASSESSEE. THUS THE LEARNED AR HAS PRAYED THAT THE PENALTY LEVIED U/S 271(1)( C ) BE DELETED. 7. ON THE OTHER HAND THE LEARNED DR HAS CONTENDED THAT THE ASSESSEE HAS ADMITTED THE INCOME PROPOSED BY T HE AO BEING DIFFERENCE IN THE SALE CONSIDERATION AS PER S ALE AGREEMENT AND THE VALUATION MADE BY THE STAMP VALUA TION AUTHORITY ADOPTED BY THE AO. THE ASSESSEE DID NOT CHALLENGE THE VALUATION MADE BY THE STAMP VALUATION AUTHORITY OF THE PROPERTY IN QUESTION. THEREFORE THE PENALTY LEVIE D U/S 271(1)( C ) IS JUSTIFIED. HE HAS RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND REL EVANT RECORD . WE FIND THAT THE AO HAD MADE ADDITION OF RS.9 00 824/- BEING DIFFERENCE BETWEEN THE SALE CON SIDERATION AS PER SALE AGREEMENT AND THE VALUATION MADE BY TH E STAMP VALUATION AUTHORITY. THUS THE ADDITION HAS BEEN MADE BY THE AO BY APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT. IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT THE AO HAS NOT ITA NO. 2210/MUM/2010 (ASSESSMENT YEARS: 2006-07) 5 QUESTIONED THE ACTUAL CONSIDERATION RECEIVED BY THE ASSESSEE BUT THE ADDITION IS MADE PURELY ON THE BASIS OF DEE MING PROVISIONS OF THE INCOME TAX ACT 1961. THE AO HA S NOT GIVEN ANY FINDING THAT THE ACTUAL SALE CONSIDERATI ON IS MORE THAN THE SALE CONSIDERATION ADMITTED AND MENTIONED IN THE SALE AGREEMENT. THUS IT DOES NOT AMOUNT TO CONCEA LMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. IT IS ALSO NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS FAILED TO FURNISH THE RELEVANT RECORD AS CALLED BY THE AO TO DISCLOSE THE PRIMARY FACTS. THE ASSESSEE HAS FURNISHED ALL T HE RELEVANT FACTS DOCUMENTS/MATERIAL INCLUDING THE SALE AGREEM ENT AND THE AO HAS NOT DOUBTED THE GENUINENESS AND VALIDITY OF THE DOCUMENTS PRODUCED BEFORE HIM AND THE SALE CONSIDER ATION RECEIVED BY THE ASSESSEE. UNDER THESE FACTS AND CIRCUMSTANCES IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT FURNISHED CORRECT PARTICULARS OF INCOME. MERELY B ECAUSE THE ASSESSEE AGREED FOR ADDITION ON THE BASIS OF VALUAT ION MADE BY THE STAMP VALUATION AUTHORITY WOULD NOT BE A CO NCLUSIVE PROOF THAT THE SALE CONSIDERATION AS PER THIS AGRE EMENT WAS INCORRECT AND WRONG. ACCORDINGLY THE ADDITION BECA USE OF THE DEEMING PROVISIONS DOES NOT IPSO FACTO ATTRACT THE PENALTY U/S 271(1)(C ). HENCE IN VIEW OF THE DECISION OF THE H ONBLE 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. ITA NO. 2210/MUM/2010 (ASSESSMENT YEARS: 2006-07) 6 9. THE APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 22.12.2010 SD SD (R.S.SYAL) (VIJ AY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ON THIS 22 ND DAY OF DEC 2010 SRL:161210 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR ITAT MUMBAI