Satish Narayan Kasare,, Ahmednagar v. Income-tax Officer,,

ITA 239/PUN/2016 | 2009-2010
Pronouncement Date: 22-11-2017 | Result: Allowed

Appeal Details

RSA Number 23924514 RSA 2016
Assessee PAN ALKPK5168Q
Bench Pune
Appeal Number ITA 239/PUN/2016
Duration Of Justice 1 year(s) 9 month(s) 4 day(s)
Appellant Satish Narayan Kasare,, Ahmednagar
Respondent Income-tax Officer,,
Appeal Type Income Tax Appeal
Pronouncement Date 22-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted B
Tribunal Order Date 22-11-2017
Last Hearing Date 20-11-2017
First Hearing Date 20-11-2017
Assessment Year 2009-2010
Appeal Filed On 17-02-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH PUNE . BEFORE SHRI D. KARUNAKARA RAO AM AND SHRI VIKAS AWASTHY JM . / I TA NO. 239 /PUN/20 16 / ASSESSMENT YEAR : 2009 - 10 MR. SATISH NARAYAN KASARE STATION ROAD SHRIGONDA DIST - AHMEDNAGAR PIN - 413 701 PAN : ALKPK 5168Q .... / APPELLANT / V/S. THE INCOME TAX OFFICER WARD - 4 AHMEDNAGAR. / RESPONDENT A SSESSEE BY : SHRI KISHOR PHADKE A SSESSEE BY : SHRI KISHOR PHADKE REVENUE BY : DR. VIVEK AGGARWAL / DATE OF HEARING : 20.11.2017 / DATE OF PRONOUNCEMENT : 22 .11.2017 / ORDER PER VIKAS AWASTHY JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 2 PUNE DATED 10.11.2015 FOR THE ASSESSMENT YEAR 2009 - 10 AGAINST CONFIRMING OF PENALTY LEVIED U/S. 271(1) (C) OF THE INCOME TAX ACT 1961 ( HEREINAFTER REFERRED TO AS THE ACT). 2 ITA NO. 239 /PUN/2016 A.Y. 2009 - 10 2. THE ASSESSEE DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR UNDER APPEAL SOLD SOME PLOT S OF LAND JOINTLY OWNED WITH TWO OTHER PERSONS. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 50C AN D DETERMINED ASSESSEES SHARE IN SHORT TERM CAPITAL GAIN AS RS.3 90 376/ - ARISING FROM SALE O F PLOT. THE ASSESSEE ACCEPTED THE ADDITION AND DID NOT PREFER APPEAL AGAINST SHORT TERM CAPITAL GAIN COMPUTED BY ASSESSING OFFI CER. PENALTY U/S. 271(1)(C) WAS INITIATED QUA AFORESAID ADDITION. THE ASSESSING OFFICER VIDE ORDER DATED 18.06.2012 LEVIED PENALTY OF RS. 1 20 688/ - U/S. 271 (1)(C) OF THE ACT. THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AGAINST LEVY OF PENALTY. THE FIRST APPELLATE AUTH ORIT Y REJECTED THE CONTENTION OF ASSESSEE AND UPHELD PENALTY ORDER. NOW THE ASSESSEE IS IN SECOND APPEAL BEFORE THE T RIBUNAL AGAINST CONFIRMING OF PENALTY. CONFIRMING OF PENALTY. 3. SHRI KISHOR PHADKE APPEARING ON BEHALF OF ASSESSEE SUBMITTED THAT PENALTY HAS BEEN LEVIED IN RE SPECT OF ADDITION MADE ON ACCOUNT OF SHORT TERM CAPITAL GAIN DETERMINED BY INVOKING THE PROVISIONS OF SECTION 50C. THE LD. AR SUBMITTED THAT I T IS A WELL SETTLED LAW THAT NO PENALTY CAN BE LEVIED WHERE ADDITIONS ARE MADE ON ESTIMATION OR DEEMING PROVISIONS . THE LD. AR TO BUTTRESS HIS SUBMISSIONS PLACED RELIANCE ON THE FOLLOWING DECISIONS: I) COMMISSIONER OF INCOME TAX VS. FORTUNE HOTELS AND ESTATES ( P.) LTD. REPORTED IN 52 TAXMANN.COM 330 ( BOMBAY). II) RADHESHA M BRIJLAL RAWAT VS. INCOME TAX OFFICER IN ITA NO. 1727/PN/2012 DECIDED ON 04.09.2015. 3 ITA NO. 239 /PUN/2016 A.Y. 2009 - 10 3.1 THE LD. AR FURTHER CONTENTED THAT PENALTY LEVIED U/S. 271 (1) (C) IS LIABLE TO BE DELETED ON ACCOUNT OF FAULTY MANNER OF LEVYING PENALTY. WHILE RECORDING SATISFACTION FOR INITIATING PENALTY THE ASSESSING O FFICER HAS OBSERVED THAT PENALTY U/S. 271 (1) (C) HAS TO BE LEVIED FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND THEREBY CONCEALING THE INCOME. HOWEVER WHILE LEVYING PENALTY THE ASSESSING OFFICER HAS NOT MENTIONED ANY LIMB/CHARGE ON WHICH PENALTY U /S. 271(1) (C) IS BEING LEVIED. THE LD. AR CONTENTED THAT WHERE THE ASSESSING OFFICER HAS NOT MENTIONED THE CHARGE OR LIMB ON WHICH PENALTY U/S. 271(1)(C) IS LEVIED IN AN UNAMBIGUOUS TERMS THE PENALTY ORDER IS NOT SUSTAINABLE. 4. ON THE OTHER HAND DR . VIVEK AGGARWAL REPRESENTING THE DEPARTMENT V EHEMENTLY DEFENDED THE ORDER LEVYING PENALTY AND ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMING LEVY OF PENALTY . THE LD. DR SUBMITTED THAT THE ASSESSEE IN HIS RETURN OF INCOME HAS NOT LD. DR SUBMITTED THAT THE ASSESSEE IN HIS RETURN OF INCOME HAS NOT DISCLOSED SHORT TERM CAPITAL GAIN ARISING FROM SALE OF PLOTS. THE ASSESSEE ACCEPTED THE ADDITION O F SHORT TERM CAPITAL GAIN AND HAS NOT DISPUTED THE SAME BEFORE HIGHER FORUM. SINCE THE ASSESSEE FAILED TO DISCLOSE INCOME FROM SALE OF PLOTS IN THE RETURN OF INCOME PENALTY U/S. 271(1) (C) HAS BEEN RIGHTLY LEVIED. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. IT IS AN UNDISPUTED FACT THAT SHORT TERM CAPIT AL GAIN HAS BEEN COMPUTED BY ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION 50C. IT IS A WELL SETTLED PRINCIPLE THAT PENALTY CANNOT BE LEVIED ON THE ADDITION BASED ON ESTIMATION AND DEEMING PROVISIONS. IT IS NOT A CASE OF REVENUE THAT THE 4 ITA NO. 239 /PUN/2016 A.Y. 2009 - 10 ASSESSEE HAS NOT DECLARED SALE TRANSACTION OF PLOT S IN HIS BOOKS. THE ASSESSING OFFICER MADE ADDITION BY INVOKING PROVISIONS OF SECTION 50C AND THEREAFTER COMPUT ING SHORT TERM CAPITAL GAIN. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. FORTUNE HOTELS AND ES TATES (P.) LTD (SUPRA) HAS HELD THAT HIGHER SALES CONSIDERATION OF PROPERTY DETERMINED BY INVOKING PROVISION OF SECTION 50C DID NOT BY ITSELF AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME SO AS TO ATTRACT LEVY OF PENALTY U/S. 271(1) (C) OF THE ACT. 6. SIMILAR VIEW HAS BEEN TAKEN BY CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF RADHESHA M BRIJLAL RAWAT VS. ITO (SUPRA.). THE RELEVANT EXTRACT OF THE FINDINGS OF CO - ORDINATE BENCH READ AS UNDER : 6. WE OBSERVE THAT THE ADDITION HAS BEEN MADE BY INVOKING THE PROVISIONS OF SECTION 50C . IT IS A WELL SETTLED LAW THAT PENALTY CANNOT BE LEVIED ON THE ADDITIONS BASED ON ASSUMPTIONS ESTIMATIONS AND BY INVOKING DEEMING PROVISIONS. IT IS AN ESTIMATIONS AND BY INVOKING DEEMING PROVISIONS. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS DISCLOSED THE SALE TRANSACTION OF LAND IN HIS RETURN OF INCOME AND HAS EVEN COMPUTED LONG TERM CAPITA L GAIN THERE ON. THE ASSESSEE HAD COMPUTED LONG TERM CAPITAL GAIN ON THE BASIS OF SALE CONSIDERATION STATED IN SALE DEED WHEREAS THE ASSESSING OFFICER HAS DETERMINED LONG TERM CAPITAL GAIN ON THE BASIS OF VALUATION CERTIFICATE SUBMITTED BY THE ASSESSEE FOR THE YEAR 2010. THE ADDITION HAS BEEN MADE BY INVOKING DEEMING PROVISIONS OF SECTION 50 C. IN OUR CONSIDERED VIEW IN ASSESSMENT PROCE EDINGS THE PROVISIONS OF SECTION 5 0 C CAN BE INVOKED FOR MAKING ADDITION HOWEVER PENALTY CANNOT BE LEVIED ON THE BASIS OF SUCH DEEMING PROVISIONS. THE DEPARTMENT CANNOT PRESUME THAT THERE IS CONCEALMENT OR INACCURATE PARTICULARS ARE FURNISHED. THERE MUST BE INDEPENDENT FINDING. ONCE THE ASSESSEE HAS FURNISHED THE EXPLANATION THE ONUS SHIFTS ON THE REVENUE TO - PROVE THAT THE EXPLANATION FURNISHED BY ASSESSEE IS WRONG. WE OBSERVE THAT THE REVENUE HAS NOT DISCHARGED THE ONUS IN PROVING THAT THE SALE CONSIDE RATION STATED IN THE SALE DEED IS WRONG. THEREFORE IN THE FACTS OF THE CASE WE ARE OF THE VIEW THAT PENALTY U/S. 271(1 )(C) CANNOT BE LEVIED ON SUCH ADDITIONS EVEN IF ADMITTED BY THE ASSESSEE IN QUANTUM PROCEEDINGS. 7. OUR VIEW IS FORTIFIED BY THE DECI SION OF THE CO - ORDINATE BENCH IN THE CASE OF RENU HINGORANI VS. ACIT IN ITA NO. 2210/M UM /2010 FOR THE ASSESSMENT YEAR 2006 - 07 DECIDED ON 22 - 12 - 2010. IN THE SAID CASE THE CO - ORDINATE BENCH DELETED THE PENALTY WHERE THE ADDITION WAS MADE BY THE ASSESSING O FFICER BY APPLYING THE PROVISIONS OF SECTION 50C SUBSTITUTING THE SALE CONSIDERATION WITH VALUATION MADE BY THE STAMP VALUATION AUTHORITY. THE RELEVANT 5 ITA NO. 239 /PUN/2016 A.Y. 2009 - 10 EXTRACT OF THE FINDINGS OF THE CO - ORDINATE BENCH IN THE CASE OF RENU HINGORANI VS. ACIT (SUPRA) ARE AS UNDER: ' 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RELEVANT RECORD. WE FIND THAT THE AO HAD MADE ADDITION OF RS.9 00 824/ - BEING DIFFERENCE BETWEEN THE SALE CONSIDERATION AS PER SALE AGREEMENT AND THE VALUATION MADE BY THE STAMP VALUATION AUTHORITY. THUS THE ADDITION HAS BEEN MADE BY THE AO BY APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT. IT I S EVIDENT FROM THE ASSESSMENT ORDER THAT THE AO HAS NOT QUESTIONED THE ACTUAL CONSIDERATION RECEIVED BY THE ASSESSEE BUT THE ADDITION IS MADE PURELY ON THE BASIS OF DEEMING PROVISIONS OF THE INCOME TAX ACT 1961 . THE AO HAS NOT GIVEN ANY FINDING THAT THE ACTUAL SALE CONSIDERATION IS MORE THAN THE SALE CONSIDERATION ADMITTED AND MENTIONED IN THE SALE AGREEMENT. THUS IT DOES NOT AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. 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 P RIMARY FACTS. TH E ASSESSEE HAS FU RNISHED ALL THE RELEVANT FACTS DOCUME NTS/MATERIAL INCLUDING THE SALE AGREEMENT AND THE AO HAS NOT DOUBTED THE GENUINENESS AND VALIDITY THE DOCUMENTS PRODUCED BEFORE HIM AND T HE 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 STAMP VALUATION AUTHORITY WOULD NOT BE A MADE BY THE STAMP VALUATION AUTHORITY WOULD NOT BE A CONCLUSIVE PROOF THAT THE SALE CONSIDERATION AS PER THIS AGREEMENT WAS INCORRECT AND WRONG. ACCORDINGLY THE ADDITION BECAUSE OF THE DEEMING PROVISIONS DOES NOT IPSO FACTO ATTRACT THE PENALTY U/ S . 271 (1 )(C ). HENCE IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT V / S . RELIANCE PETROPRODUCTS PVT. LTD (SU PRA) THE PENALTY LEVIED U/ S . 271 (1)( C) IS NOT SUSTAINABLE. THE SAME IS DELETED. ' 8. THUS IN VIEW OF THE FACTS OF THE CASE WE DELETE THE PENALTY AND ALLOW THE APPEAL OF THE ASSESSEE ACCORDINGLY. 7. THUS IN VIEW OF FACTS OF THE CASE AND DECISION S DISCUSSED ABOVE WE ARE OF CONSIDERED VIEW THAT IT IS NOT A CASE WHERE PENALTY U/S. 271(1)( C) C OULD BE LEVIED . ACCORDINGLY WE DIRECT THE ASSESSING OFFICE R TO DELETE THE PENALTY. T HE IMPUGNED ORDER IS SET ASIDE AND APPEAL OF THE ASSESSEE IS ALLOWED. 6 ITA NO. 239 /PUN/2016 A.Y. 2009 - 10 8. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED ON WEDNESDAY THE 22 ND DAY OF NOVEMBER 201 7 . SD/ - SD/ - ( . / D. KARUNAKARA RAO ) ( /VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 22 ND NOVEMBER 2017 . SB / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 2 PUNE. 4. THE PR. CIT - 1 PUNE. 5 . / DR ITAT B BENCH PUNE. 6 . / GUARD FILE. 6 . / GUARD FILE. // TRUE COPY // / BY ORDER / PRIVATE SECRETARY / ITAT PUNE .