Shri Aslam Zakaria Naviwala, Surat v. The Income tax Officer,Ward-5(4),, Surat

ITA 2389/AHD/2012 | 2009-2010
Pronouncement Date: 25-04-2014 | Result: Allowed

Appeal Details

RSA Number 238920514 RSA 2012
Assessee PAN AASPN2921M
Bench Ahmedabad
Appeal Number ITA 2389/AHD/2012
Duration Of Justice 1 year(s) 6 month(s)
Appellant Shri Aslam Zakaria Naviwala, Surat
Respondent The Income tax Officer,Ward-5(4),, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 25-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 25-04-2014
Date Of Final Hearing 11-04-2014
Next Hearing Date 11-04-2014
Assessment Year 2009-2010
Appeal Filed On 25-10-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER AND SHRI N.S. SAINI ACCOUNTANT MEMBER ITA NO.2388/AHD/2012 A.Y. 2009-10 MOHD. SALIM ZAKARIA NAVIWALA 1710/A/8/1 MILAN EMPIRE BUILDING NEAR NTM MARKET NAWABWADI ROAD SAHARA DARWAJA SURAT. PAN: AASPN 2921M VS ITO WARD-5(4) SURAT (APPELLANT) (RESPONDENT) ITA NO.2389/AHD/2012 A.Y. 2009-10 ASLAM ZAKARIA NAVIWALA 1710/A/8/1 MILAN EMPIRE BUILDING NEAR NTM MARKET NAWABWADI ROAD SAHARA DARWAJA SURAT. PAN: AASPN 2921M VS ITO WARD-5(4) SURAT (APPELLANT) (RESPONDENT) REVENUE BY : SHRI O.P. BATHEJA SR.D.R. ASSESSEE(S) BY : SHRI M.K. PATEL AR / DATE OF HEARING : 11/04/2014 / DATE OF PRONOUNCEMENT: 25/04/2014 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT JUDICIAL MEMBER THESE TWO APPEALS HAVE IDENTICAL FACTS EMERGING FR OM TWO SEPARATE ORDERS OF LEARNED CIT(A)-I SURAT BOTH DATED 28.09 .2012. THESE APPELLANTS HAVE CHALLENGED THE CONFIRMATION OF PENA LTY LEVIED U/S.271(1)(C) OF RS.3 24 290/- RESPECTIVELY. ITA NOS.2388 & 2389/AHD/2012 MOHD. SALIM & ASLAM ZAKARIA NAVIWALA VS. ITO WARD- 5(1) SURAT. A.Y.2009-10 - 2 - 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) DATED 30 TH OF SEPTEMBER 2011 AND 26 TH OF NOVEMBER 2011 AND THE CORRESPONDING PENALTY ORDER U/S.271(1) (C) DATED 14 TH OF MARCH 2012 AND 30 TH OF MAY 2012 THAT THESE APPELLANTS/BROTHERS HAD 50% SHARE IN A PROPERTY SITUATED AT VILLAGE-EMAGIRD DISTRICT-BURHANPUR. THE AO HAD RECEIVED AN INFORMATION U/S.133(6) OF IT ACT ACCORDING TO WHICH THESE BROTHERS HAVE SOLD A PROPERTY BUT THAT WAS NOT DISCLOSED IN THE RETURN OF INCOME FILED. THE EXPLANATION OF THE ASSESSEE WAS THAT A PIECE OF LAND WAS PURCHASED IN VILLAGE EMAGIRD DIS TRICT-BURHANPUR ADMEASURING AT 24 798 SQ. FT. ON 30 TH OF MAY 1991 FOR A SUM OF RS.92 000/-. THE COST OF LAND WAS SHOWN BY THEM IN THEIR RESPECTIVE BALANCE SHEET. THE LAND WAS SOLD ON 14 TH OF JANUARY 2009 FOR A CONSIDERATION OF RS.25 LACS (HAVING 50 SHARE EACH). IN THE RETURN OF INCOME FILED FOR A.Y. 2009-10 THE SAID AMOUNT WAS SHOWN AS AN UNSECURED LOAN RECEIVED FROM SALE OF PROPERTY AND I NADVERTENTLY COULD NOT OFFER CAPITAL GAIN. IT WAS FURTHER EXPLAINED TH AT THE CAPITAL GAIN WAS NOT SHOWN BECAUSE THESE APPELLANTS WERE DISTURBED D UE TO THE ILLNESS OF THEIR FATHER. DURING THE COURSE OF ASSESSMENT PROCE EDINGS THE APPELLANTS HAVE INFORMED THE DETAILS OF THE SALE DEED AND ALSO PRODUCED BANK STATEMENT TO OFFER THE SALE CONSIDERATION OF THE PR OPERTY SOLD. THE AO HAS ADOPTED THE SALE CONSIDERATION AS IT WAS FIXED FOR THE PURPOSE OF THE STAMP DUTY AT RS.30 43 000/- AND A LONG TERM CAPITA L GAIN OF RS.14 29 960/- IN EACH HAND WAS ASSESSED. 3. DURING THE PENALTY PROCEEDINGS IT WAS REITERATE D THAT THE FACT ABOUT THE PURCHASE OF PROPERTY AND THE TRANSACTIONS OF TH E PROPERTY WAS NOT WITHHELD BUT IT WAS SHOWN THAT THERE WAS A LIABILIT Y OF SRI ROHIT RAMAVTAR ITA NOS.2388 & 2389/AHD/2012 MOHD. SALIM & ASLAM ZAKARIA NAVIWALA VS. ITO WARD- 5(1) SURAT. A.Y.2009-10 - 3 - PODDAR THE PURCHASER OF RS.12 50 000/- RESPECTIVE LY IN EACH HAND. ON ONE HAND IN THE BALANCE SHEET DRAWN AS ON 31 ST MARCH 2009 THE LIABILITY WAS SHOWN AND ON THE OTHER HAND ON EACH HAND THE IM PUGNED LAND AT BURHANPUR WAS SHOWN AS AN ASSET OF RS.46 000/- IN E ACH HAND. AS SOON AS IT WAS NOTICED BY THE AO; THESE APPELLANTS HAVE RECTIFIED THE MISTAKE AND OFFERED THE CAPITAL GAIN BEFORE THE COMPLETION OF THE ASSESSMENT. HOWEVER THE AO WAS NOT SATISFIED WITH THE SAID EXP LANATION AND ACCORDINGLY HELD THAT THE LONG TERM CAPITAL GAIN WA S NOT DISCLOSED BY THE ASSESSEE; HENCE CONCEALED THE SAME WHICH RESUL TED INTO A LEVY OF PENALTY OF RS.3 24 290/- RESPECTIVELY. BEING AGGRIE VED THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 4. BEFORE LEARNED CIT(A) THE ASSESSEE HAS PLACED R ELIANCE ON A DECISION OF PRICE WATERHOUSE COOPERS PVT. LTD. VS. CIT 348 ITR 306 (SC) AND ARGUED THAT IT WAS AN ADVERTENT ERROR AS WELL AS A SILLY MISTAKE ON THE PART OF THE ASSESSEE WHICH HAD HAPPENED DUE TO THE HOSPITALIZATION OF THEIR FATHER; HENCE THE LONG TERM CAPITAL GAIN COULD NOT BE SHOWN IN THE RETURN OF INCOME. HOWEVER LEARNED CIT(A) WAS N OT CONVINCED AND AFFIRMED THE ACTION OF THE AO BY DISMISSING THE APP EALS OF BOTH THE PERSONS. 5. FROM THE SIDE OF THESE APPELLANTS LEARNED AR M R. M.K. PATEL APPEARED AND PLEADED THAT THERE WAS NO MALA FIDE INTENTION TO CONCEAL THE LONG TERM CAPITAL GAIN AND THE SAME WAS IMMEDIATELY RECTIFIED BY OFFERING THE LONG TERM CAPITAL GAIN BEFORE THE AO W HILE HE WAS FINALIZING THE ASSESSMENT. EVEN THESE APPELLANTS HA VE NOT CHALLENGED THE SAID ASSESSMENT ON THE POINT OF TAXING THE LONG TER M CAPITAL GAIN IN THE ITA NOS.2388 & 2389/AHD/2012 MOHD. SALIM & ASLAM ZAKARIA NAVIWALA VS. ITO WARD- 5(1) SURAT. A.Y.2009-10 - 4 - HANDS OF THE ASSESSEE. LEARNED AR HAS ALSO PLEADED THAT RELEVANT INFORMATION ABOUT THE SALE AMOUNT WAS DULY INFORMED BUT UNDER WRONG HEAD AS PER THE ENTRIES IN THE BALANCE SHEET. HE HAS PLACED RELIANCE ON A DECISION OF ITAT D BENCH AHMEDABAD IN THE CASE OF CHIMANLAL MANILAL PATEL VS. CIT IN ITA NO.508/AHD/2010 A.Y.2006-07 ORDER DATED 22 ND OF JUNE 2012 . FOR THE LEGAL PROPOSITION THAT THE ADDITION HAVE BEEN MADE BY INVOKING THE DEEMING PROVISION UNDER S ECTION 50C OF IT ACT AND ONLY BECAUSE THE ASSESSEE HAD AGREED TO THE SAID ADDITION THE SAME IPSO FACTO WOULD NOT BE CONSIDERED AS A REASON ABLE GROUND FOR LEVY OF PENALTY. HE HAS ALSO PLACED RELIANCE ON THE DECI SION OF PRICE WATERHOUSE COOPERS PVT. LTD. VS. CIT 348 ITR 306 (SC) . 6. FROM THE SIDE OF THE REVENUE LEARNED DR HAS STR ONGLY SUPPORTED THE ORDERS OF THE AO AND CIT(A) AS WELL AS PLEADED THAT IT WAS A CLEAR CASE OF NON-DISCLOSURE OF LONG TERM CAPITAL GAIN ON THE PART OF THESE TWO APPELLANTS WHICH WAS DETECTED WHEN AN INFORMATI ON WAS PROCURED BY THE AO U/S.133(6) OF IT ACT FROM THE SUB-REGISTRAR OFFICE; HENCE IT WAS A FIT CASE OF LEVY OF PENALTY U/S.271(1)(C) OF IT ACT . RELIANCE WAS PLACED ON KAILASHBHAI AMBALAL SHAH 129 ITD 135 (AHD) AND A DECISION OF ITAT A BENCH AHMEDABAD PRONOUNCED IN THE CASE OF ITO V S. SMT. CHANDRIKABEN ARVIND PATEL (ITA NO.2333/AHD/2012 A. Y.2008-09) ORDER DATED 04.10.2013 . 7. WE HAVE HEARD BOTH THE SIDES AT SOME LENGTH. AT THE OUTSET IT IS WORTH TO DISCUSS SOME OF THE SALIENT FACTS OF THESE TWO CASES AND THOSE WERE THAT THE ASSESSEE HAS FILED THE BALANCE SHEET ALONG WITH RETURN WHEREIN THE AMOUNT OF SALE CONSIDERATION WAS SHOWN AS A LIABILITY ON ONE ITA NOS.2388 & 2389/AHD/2012 MOHD. SALIM & ASLAM ZAKARIA NAVIWALA VS. ITO WARD- 5(1) SURAT. A.Y.2009-10 - 5 - HAND AND ON THE OTHER HAND THE LAND IN QUESTION WAS SHOWN AS AN ASSET. THE OTHER FACT WAS THAT THE FATHER OF THESE APPELLANTS WAS ADMITTED TO P.D. HINDUJA NATIONAL HOSPITAL DURING THAT PERIOD; HENCE THE CO RRECT INFORMATION WAS NOT PLACED ON RECORD ABOUT THE SALE OF LAND. IT APPEARS THAT DUE TO THE LACK OF CORRECT INFORMATION THE AUTHORIZED CONSULTANT COUL D NOT BE IN A POSITION TO REVEAL THE SALE TRANSACTION IN THE RETURN OF INCOME . FROM THE BANK STATEMENTS AS INFORMED BEFORE THE AO IT WAS FOUND THAT THE AM OUNT WAS RECEIVED FROM THE SAID PURCHASER NAMELY ROHIT RAMAVTAR PODDAR; HENC E MISTAKENLY BUT UNDER BONA FIDE BELIEF IT WAS SHOWN IN THE BALANCE SHEET AS A LIABI LITY. FACTS OF THE CASE HAVE FURTHER REVEALED THAT THE PROPERTY IN QUE STION AND THE AMOUNT INVESTED HAD ALSO BEEN SHOWN TOWARDS ASSETS SIDE. IN THOSE CIRCUMSTANCES WHEN THE FATHER WAS ADMITTED IN THE HOSPITAL AND AS THE BAD LUCK WOULD HAVE IT LATER ON EXPIRED AS PER THE FACTS OF THE CASE NARR ATED BEFORE THE REVENUE AUTHORITIES THE POSSIBILITIES WOULD BE THAT THE NO N-OFFER OF LONG TERM CAPITAL GAIN MIGHT HAVE BEEN AN INADVERTENT SILLY MISTAKE O N THE PART OF THESE TWO APPELLANTS. WE HAVE CAREFULLY PERUSED THE DECISION OF THE HONBLE SUPREME COURT PRONOUNCED IN THE CASE OF PRICE WATERHOUSE COOPER PVT. LTD. (SUPRA) AND NOTED THAT IN THAT CASE AS WELL IT WAS HELD THA T THE ERROR COMMITTED COULD BE DESCRIBED ONLY AS A HUMAN ERROR WHICH WE ALL ARE P RONE TO MAKE COMMENTED BY HONBLE SUPREME COURT THEREFORE THE IMPOSITION OF PENALTY WAS HELD AS NOT JUSTIFIED. CONSIDERING THE PECULIAR FACTS OF TH IS CASE WE ARE ALSO OF THE VIEW THAT THE LEGAL PROPOSITION LAID DOWN BY THE HONBLE COURT CAN ALSO BE APPLIED. 8. AS FAR AS THE DECISIONS CITED BY LEARNED DR ARE CONCERNED WE HAVE NOTED THAT IN ONE OF THE CASE OF KAILASHBHAI AMBALA L SHAH (SUPRA) THE ASSESSEE WAS CAUGHT IN RESPECT OF UNACCOUNTED INVESTMENT IN BANK WHICH WAS INFORMED TO THE AO THROUGH AIR (ANNUAL INFORMATION RETURN). IN THE ABSENCE OF ANY PLAUSIBLE/SATISFACTORY EXPLANATION IT WAS HELD BY THE RESPECTED CO-ORDINATE BENCH THAT THE ASSESSEE HAD CONCEALED THE PARTICULA RS OF INCOME BY NOT DISCLOSING THE SAID UNACCOUNTED INVESTMENT IN THE B ANK. EVEN IN THE CASE OF ITA NOS.2388 & 2389/AHD/2012 MOHD. SALIM & ASLAM ZAKARIA NAVIWALA VS. ITO WARD- 5(1) SURAT. A.Y.2009-10 - 6 - SMT. CHANDRIKABEN ARVIND PATEL (SUPRA) IT WAS FOUND BY THE RESPECTED CO- ORDINATE BENCH THAT THERE WAS A CLEAR CUT NON-DISCL OSURE OF LONG TERM CAPITAL GAIN AND NO PART OF IT WAS EVEN DISCLOSED BY THE AS SESSEE IN THE RETURN OF INCOME. DUE TO THE SAID REASON IT WAS HELD THAT IN THE ABSENCE OF ANY EVIDENCE BROUGHT ON RECORD TO DEMONSTRATE THAT THE ASSESSEE HAD ANY INTENTION OF DISCLOSING THE CAPITAL GAIN THE PENALTY WAS RIGHTLY IMPOSED. HOWEVER THE FACTS AS NARRATED HEREINABOVE IN RESPECT OF THESE APPELL ANTS WERE SOMEWHAT DIFFERENT BECAUSE THE DETAILS OF THE PURCHASE/INVE STMENT IN THE PROPERTY WAS DISCLOSED IN THE PAST SO APPEARED TOWARDS ASSETS SIDES IN THE BALANCE SHEET. BUT FOR THE YEAR UNDER CONSIDERATION WHEN SALE TOO K PLACE; THE TRANSACTION WAS NARRATED IN BALANCE SHEET UNDER WRONG HEADS. INAD VERTENTLY UNDER ERRONEOUS IMPRESSION NARRATED THESE ENTRIES IN THE BALANCE SH EET AS A LIABILITY OF THE PURCHASER SIMULTANEOUSLY LAND; ALTHOUGH SOLD; REMA INED TO BE REFLECTED AS AN ASSET; WHICH INVOLUNTARILY RESULTED INTO NON-DISCLO SURE OF LONG TERM CAPITAL GAIN. WE THEREFORE CONCLUDE THAT FOLLOWING THE D ECISION OF HONBLE SUPREME COURT (SUPRA) THE APPEALS IN HAND ARE NOT FIT TO HOLD THAT THERE WAS A DELIBERATE CONCEALMENT OF INCOME; HENCE HEREBY DIR ECT TO DELETE THE PENALTY. RESULTANTLY THE GROUNDS RAISED BY THESE ASSESSEES ARE HEREBY ALLOWED. 8. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEES ARE ALLOWED. SD/- SD/- (N.S. SAINI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 25/04/2014 PRABHAT KR. KESARWANI SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III AHMEDABAD 5. / DR ITAT AHMEDABAD ITA NOS.2388 & 2389/AHD/2012 MOHD. SALIM & ASLAM ZAKARIA NAVIWALA VS. ITO WARD- 5(1) SURAT. A.Y.2009-10 - 7 - 6. / GUARD FILE. / BY ORDER / ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD