Shri Nandubhai Nathabhai Patel, Ahmedabad v. The Income tax Officer,Ward-11(2),, Ahmedabad

ITA 3033/AHD/2013 | 2008-2009
Pronouncement Date: 30-09-2016 | Result: Partly Allowed

Appeal Details

RSA Number 303320514 RSA 2013
Assessee PAN AFXPP6614D
Bench Ahmedabad
Appeal Number ITA 3033/AHD/2013
Duration Of Justice 2 year(s) 9 month(s) 11 day(s)
Appellant Shri Nandubhai Nathabhai Patel, Ahmedabad
Respondent The Income tax Officer,Ward-11(2),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 30-09-2016
Date Of Final Hearing 29-09-2016
Next Hearing Date 29-09-2016
Assessment Year 2008-2009
Appeal Filed On 19-12-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH AHMEDABAD BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER ./ ITA NO. 3033/AHD/2013 / ASSESSMENT YEAR : 2008-09 NANDUBHAI NATHABHAI PATEL 82-1 GAMBHASHERI B/H. KRUSHI BHAVAN ELLISBRIDGE AHMEDABAD PAN : AFXPP 6614 D VS INCOME-TAX OFFICER WARD 11 (2) AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI S.N. DIVATIA ADVOCATE REVENUE BY : SHRI RAHUL KUMAR SR. DR / DATE OF HEARING : 29/09/2016 / DATE OF PRONOUNCEMENT: 30/09/2016 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XVI AHMEDABAD DATED 07.10.2013 FOR AY 2008-09. 2. THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT IS CHALLENGED BY FOLLOWING GROUNDS:- 1. THE LEARNED COMMISSIONER OF INCOME-TAX HAS ERR ED IN LAW AND FACTS IN NOT DELETING THE LEVY OF PENALTY FOR RS.8 72 115/- U/S 271(1)(C) OF THE INCOME- TAX ACT FOR ASSESSMENT YEAR 2008-09. 2. DISALLOWANCE OF EXPENSES WILL NOT PER SE AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME. 3. CONCEALMENT INVOICE PENAL ACTION IT HAS TO BE PR OVED AS CONSCIOUS ACT. IT IS TRUE THAT DIRECT EVIDENCE MAY NOT BE AVAILABLE IN E VERY CASE. 4. THE APPELLANT HAS NO SURMISE THE RECEIPT FRAUDU LENTLY NOR CLAIMED THE EXPENDITURE WHICH MAY FALSE. 5. THE APPELLANT HAS NOT CONCEAL THE INCOME NOT FUR NISHED AN INACCURATE PARTICULARS. SMC-ITA NO. 3033/AHD/2013 NANDUBHAI NATHABHAI PATEL VS. ITO AY : 2008-09 2 6. AS PER SECTION 48(1) EXPENDITURE INCURRED PRIOR TO PASSING OF TITLE IS ALSO DEDUCTIBLE. 7. MAINLY REJECTION OF CLAIM AND DISALLOWANCE OF E XPENSES COULD NOT JUSTIFIED THE INFERENCE OF CONCEALMENT. 8. YOUR APPELLANT SUBMITS AND PRAYS TO DELETE THE P ENALTY LEVIED U/S 271(1)(C) FOR RS.8 72 115/- FOR ASSESSMENT YEAR 2008-09. 3. BRIEF FACTS ARE THE ASSESSEE FILED RETURN OF I NCOME AT RS.50 970/- ON 26.03.2009. FROM AIR INFORMATION THE AO OBSERVED THAT THE ASSESSEE HAS SOLD IMMOVABLE PROPERTY VALUED AT RS.31 65 800/- ON 22.01.2008 THE CAPITAL GAINS THEREFROM WERE NOT DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME. THE AO MADE RELEVANT INQUIRIES. ON QUESTIONING THE ASSESSEE FILED COMPUTATION OF SHORT TERM CAPITAL GAINS AS UNDER:- SALE :- DATED 30.01.2008 VALUE : 31 65 800 /- PURCHASE :- DATED 01.04.2006 VALUE : 28 77 3 15/- SHORT TERM CAPITAL GAIN : 2 88 415/- 4. THE AO FOUND THAT THE COST OF PURCHASE AND IMPRO VEMENT THEREON CLAIMED BY THE ASSESSEE WAS DISPROPORTIONATE AND QU ESTIONS WERE ASKED IN THIS BEHALF. THE ASSESSEE COULD NOT GIVE SATISFACT ORY EXPLANATION TO SUBSTANTIATE ITS CLAIM OF COST OF PURCHASE AS CLAIM ED FROM THE COMPUTATION OF SHORT TERM CAPITAL GAINS. CONSEQUENTLY THE AO MADE ADDITIONS BY FOLLOWING OBSERVATIONS:- .. DURING THE COURSE OF ASSESSMENT PROCEEDINGS TH E AR OF THE ASSESSEE CONTENDED THAT THE TOTAL AMOUNT OF RS.28 77 315/- I S INCURRED FOR CONSTRUCTION RELATING TO THE DEVELOPMENT OF AGRICUL TURAL LAND ACQUIRED BY THE ASSESSEE AND THE AMOUNT WAS SPENT BY HIM AND HI S TWO SONS. ON VERIFICATION OF BILLS IT WAS NOTICED THAT THE BILLS PERTAINED TO THE CONSTRUCTION OF HOUSE AND IN FEW BILLS NAME OF ASSESSEES SON IS MENTIONED OR IN SOME BILLS ONLY NAME IS MENTIONED BUT DATE IS NOT MENTIONED AN D IN NONE OF THE BILLS ASSESSEES NAME IS MENTIONED. NO PROCESS OF CONVERT ING AGRICULTURAL LAND INTO NON-AGRICULTURAL LAND IS DONE. THEREFORE THE COST OF EXPENSES INCURRED ON CONSTRUCTION WORK OF RS.28 77 315/- WAS EXCLUDED FROM THE SALE VALUE OF THE PROPERTY AND SHORT TERM CAPITAL GAIN WAS WORKED OUT AT RS.25 65 800/- AND TOTAL INCOME WAS ASSESSED RS.26 16 770/- BY MAK ING ADDITION OF SMC-ITA NO. 3033/AHD/2013 NANDUBHAI NATHABHAI PATEL VS. ITO AY : 2008-09 3 RS.25 65 800/- TO THE TOTAL RETURNED INCOME OF RS.5 0 970/-. THE PENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED SEPARATELY. 5. AGGRIEVED THE ASSESSEE PREFERRED FIRST APPEAL WHERE THE ASSESSEES APPEAL WAS DISMISSED. 6. AGGRIEVED FURTHER THE ASSESSEE WENT IN APPEAL B EFORE THE ITAT AND THE ITAT VIDE ORDER DATED 15.05.2015 GAVE A MINOR R ELIEF TO THE ASSESSEE AND HELD THAT FOR THE SUBSTANTIAL AMOUNT THE ASSESSEE COULD NOT BRING ANY DEMONSTRATIVE EVIDENCE EXHIBITING PHYSICAL CHANGES IN THE PROPERTY BY FOLLOWING OBSERVATIONS:- 6. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTA NCES WE ARE OF THE VIEW THAT LD. FIRST APPELLATE AUTHORITY HAS MADE A DETAI LED ANALYSIS OF EACH ITEM OF EXPENDITURE CLAIMED BY THE ASSESSEE TOWARDS THE IMP ROVEMENT OF THE ASSET AS WELL AS INCURRED IN CONNECTION WITH THE TRANSFER. I T IS TO BE APPRECIATED THAT ASSESSEE HAS CLAIMED EXPENSES OF RS.1 55 750/- INCU RRED TOWARDS FERTILIZER AND MATIPURAN. THE TOTAL LAND IS MEASURING 2675 SQ. MTRS. WHICH IS JUST EQUIVALENT TO HALF ACRE OF LAND. EVEN SOMEBODY WANT S TO PUT WARMI-POST OR COWDUNG AS FERTILIZER IT CANNOT COST RS.1 55 750/-. THE LAND HAS BEEN SOLD AS AN AGRICULTURAL PURPOSE. THIS IS HIGHLY EXAGGERATED AMOUNT WHICH HAS BEEN CLAIMED BY THE ASSESSEE WITHOUT SUBMITTING ANY EVID ENCE. SIMILARLY THE ASSESSEE HAS CLAIMED THAT HE MUST HAVE FILLED THE L AND WITH SAND FOR LEVELING PURPOSES THOUGH NO DIRECT EVIDENCE HAS BEEN PLACED ON RECORD. THE ASSESSEE COULD ONLY PRODUCED HIS ACCOUNT AS WELL AS ACCOUNT OF HIS SONS WHEREIN THEIR BOOKS THEY HAVE CLAIMED INCURRED EXPENDITURE BUT T HE ASSESSEE COULD NOT BRING ANY DEMONSTRATIVE EVIDENCE EXHIBITING THAT SO ME PHYSICAL CHANGES WERE BROUGHT IN THE ASSET. CONSIDERING THE WELL REA SONED FINDING OF THE CIT(A) VIS--VIS THE CLAIM MADE BY THE ASSESSEE WE ARE OF THE VIEW THAT ENDS OF JUSTICE WOULD MEET IF A SUM OF RS.1 50 000/- IS ALLOWED TO THE ASSESSEE ON AN ESTIMATE BASIS FOR LEVELING AND PUTTING SOME FER TILIZER ETC. TOWARDS IMPROVEMENT OF THE ASSET. THE LD. AO SHALL RECOMPUTE D THE CAPITAL GAIN AFTER ALLOWING THE IMPROVEMENT COST OF RS.1 50 000/- TO T HE ASSESSEE. 7. IN THE MEANWHILE THE AO ISSUED PENALTY NOTICE U /S 271(1)(C) WHERE THE ASSESSEE CONTENDED THAT DURING THE COURSE OF AS SESSMENT THE ASSESSEE HAD SUBMITTED ITS EXPLANATION AND DETAILS ABOUT EXP ENDITURE INCURRED FOR DWELLING UNIT MATI PURAN AND FERTILIZERS AND COMPO UND WALL. BESIDES FOR THE STAMP DUTY AND ADVOCATE FEE VOUCHERS WERE ALSO PRODUCED. THE SMC-ITA NO. 3033/AHD/2013 NANDUBHAI NATHABHAI PATEL VS. ITO AY : 2008-09 4 INCOME TAX OFFICER HAS WRONGLY HELD THAT WITHOUT CO VERING THE AGRICULTURAL LAND AND PROPER PERMISSION THE RESIDENTIAL HOUSE C OULD NOT BE CONSTRUCTED BY THE ASSESSEE. THE ASSESSEE WAS NOT CONSTRUCTING A RESIDENTIAL HOUSE BUT A SMALL DWELLING UNIT TO LOOK AFTER THE CULTIVATION A ND AGRICULTURAL STAFF. THE COST WAS INCURRED TOWARDS PURCHASE OF STEEL CEMENT AND OTHER MATERIALS. THERE WAS NO WILLFUL DEFAULT OR MALA FIDE INTENTION. THE LD. AO OBSERVED THAT THE ASSESSEES EXPLANATION WAS CONTRADICTORY AND LA CKS ANY BONA FIDES BY FOLLOWING OBSERVATIONS:- 9. THE ABOVE SUBMISSION FILED BY THE ASSESSEE CANN OT BE CONSIDERED IN VIEW OF THE FACT THAT THE ASSESSEE HAS NOT DISCLOSED THE TRANSACTION OF SALE OF IMMOVABLE PROPERTY (AGRICULTURAL LAND) IN HIS RETURN OF INCOME FILED ON 26.03.2009 AND HAS DISCLOSED AND FILED THE DETAILS OF SALE OF SAID IMMOVABLE PROPERTY AND EARNING OF SHORT TERM CAPITAL GAIN OF RS. 2 88 415/- DURING THE COURSE OF ASSESSMENT PROCEEDING ONLY. THE BILLS OF CONSTRUCTION PRODUCED BY THE ASSESSEE PERTAINS TO THE CONSTRUCTION OF A H OUSE AND ARE CLAIMED UNDER THE PRETEXT OF DEVELOPMENT OF THE AFORESAID AGRICUL TURAL LAND AS COST OF IMPROVEMENT ON THE SAID AGRICULTURAL LAND. ON FURTH ER EXAMINATION IT WAS ALSO NOTICED THAT IN FEW BILLS NAME OF ASSESSEE'S S ONS IS MENTIONED WHILE IN SOME OF THE BILLS WHERE NAME IS MENTIONED BUT DATE IS NOT MENTIONED AND ASSESSEE'S NAME WAS NOT FOUND MENTIONED IN NONE OF THE BILLS. THEREFORE THE COST OF EXPENDITURE OF RS. 25 65 800/- HAS RIGHTLY BEEN EXCLUDED BY THE A.O. WHILE WORKING OUT THE SHORT TERM CAPITAL GAIN AT RS . 25 65 800/-. THE BILLS AMOUNTING TO RS. 20 68 161/- (AS PER THE DETAILS OF 43 BILLS) ARE RELATED TO CONSTRUCTION WORK OF HOUSE AND THEREFORE SAME CANN OT BE ALLOWED AS EXPENSES INCURRED FOR THE IMPROVEMENT OF THE AGRICU LTURAL LANDED PROPERTY TO CONSTRUCT DWELLING UNIT MATI PURAN AND FERTILIZERS AND COMPOUND WALL AMOUNTING TO RS.28 77 315/-. THE BILLS PRODUCED FOR CONSTRUCTION WORK CARRIED OUT BY THE ASSESSEE ARE RELATING TO ELECTRI C WORK WOODEN LABOR COLOR WORK POLISH WORK FLOORING WORK STEEL BARS ANGLE S WOOD CERAMICS GHANA TEAK PIPES AND HARD WARES AND SO ON. THESE EXPENSE S SEEM TO BE INCURRED FOR FINISHING WORK OF ANY BUILDING. NOT A SINGLE BILL I S RELATING TO IMPROVEMENT OF THE LAND. THESE EXPENSES ARE NOT LESS THAN A CRO RE OF RUPEES AND SUCH BUILDING WAS NOT FOUND CONSTRUCTED ON THE LAND SOLD BY THE ASSESSEE. THESE EXPENSES MAY BE RELATING TO ANY OTHER BUILDING CONS TRUCTED BY HIS SONS. THEREFORE THESE EXPENSES CLAIMED AS IMPROVEMENT CO ST OF AGRICULTURAL LAND CANNOT BE ALLOWED AND LINKED TO THE LAND SOLD. 8. THE PENALTY WAS CONFIRMED BY THE LD. CIT(A) BY FOLLOWING OBSERVATIONS:- SMC-ITA NO. 3033/AHD/2013 NANDUBHAI NATHABHAI PATEL VS. ITO AY : 2008-09 5 11. THEREFORE THE ASSESSEE HAS FURNISHED INACCUR ATE AND UNTRUE PARTICULARS OF INCOME IN HIS RETURN OF INCOME AND I AM THEREF ORE SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HI S INCOME IN THE RETURN OF INCOME FILED FOR AY 2008-09 AND HAS CONCEALED THE P ARTICULARS OF INCOME TO THE TUNE OF RS.25 65 800/- AS ABOVE AND IS LIABLE F OR PENALTY U/S 271(1) FOR CONCEALMENT OF INCOME OR FURNISHING INACCURATE AND UNTRUE PARTICULARS OF HIS INCOME IN HIS RETURN OF INCOME FOR AY 2008-09. 12. THE MINIMUM PENALTY WORKS OUT TO RS.8 72 115/- BEING 100% OF THE TAX SOUGHT TO BE EVADED WHILE THE MAXIMUM PENALTY WORKS OUT TO RS.26 16 345/- BEING 300% OF THE TAX SOUGHT TO BE EVADED. 9. AGGRIEVED THE ASSESSEE PREFERRED FIRST APPEAL A GAINST THE IMPOSITION OF PENALTY. THE LD. CIT(A) ALSO GAVE FINDINGS OF FA CTS THAT ASSESSEES EXPLANATION WAS WITHOUT ANY BASIS AND THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE ASSESSEE S CLAIM THAT HE HAD SUO MOTO OFFERED CAPITAL GAINS WAS NOT CORRECT AS NO CA PITAL GAIN WAS SHOWN IN THE ORIGINAL RETURN OF INCOME AND IT IS ONLY AFTER CONFRONTATION OF AIR INFORMATION THAT THE ASSESSEE SUBJECTED HIMSELF TO LEVY OF SHORT TERM CAPITAL GAIN. THE ASSESSEE HAS RELIED ON THE HONB LE SUPREME COURT JUDGMENT IN THE CASE OF CIT VS. RELIANCE PETROPRODU CTS PVT LTD [2010] 322 ITR 158 (SC). HOWEVER THE LD. CIT(A) DISTINGUISHE D THIS CASE ON THE GROUND THAT THE ASSESSEE HAS NOT GIVEN ANY PARTICUL ARS IN THE ORIGINAL RETURN OF INCOME. THEREFORE THE RATIO OF JUDGMENT IN THE CASE OF RELIANCE PETROPRODUCTS PVT LTD (SUPRA) WAS NOT APPLICABLE TO ASSESSEES CASE. FURTHER THE LD. CIT(A) PLACED RELIANCE ON THE FOLL OWING JUDGEMENTS:- A) A.M. SHAH & CO. VS. CIT [2000] 108 TAXMANN 137 ( GUJ.). B) DHARMENDRA TEXTILES PROCESSORS 306 ITR 277 (200 8) (SC) C) ZOOM COMMUNICATION PVT LTD 327 ITR 510 (DELHI) D) CIT VS. MAK DATA LTD [2013] 31 TAXMANN.COM 35 IN CONSIDERATION OF THE FACTUAL OBSERVATIONS AND JU DICIAL PRECEDENTS LD. CIT(A) CONFIRMED THE PENALTY BY FOLLOWING OBSE RVATIONS:- 3.7 THE FACTS OF THE CASE ARE THEREFORE REQUIRED T O BE ANALYSED IN THE LIGHT OF JUDICIAL RULINGS ENUMERATED ABOVE. IN THE ASSESSMEN T ORDER THE A O HAS SMC-ITA NO. 3033/AHD/2013 NANDUBHAI NATHABHAI PATEL VS. ITO AY : 2008-09 6 CATEGORICALLY MENTIONED THAT THE APPELLANT DID NOT DISCLOSED IN ITS RETURN OF INCOME THE CAPITAL GAINS EARNED DURING THE YEAR AND THAT THIS INFORMATION WAS AVAILABLE TO HIM ONLY THROUGH THE AIR MODULE. IT IS PERTINENT TO NOTE THAT IN THIS CASE THE RETURN WAS FILED ON 26-03-200 9 AND THE FIRST NOTICE U/S. 143(2) WAS ISSUED / SERVED UPON ASSESSEE ON 2-9-2009 . PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT A LARGE NUMBER OF NOTIC ES OF HEARING ISSUED BY THE A O REMAINED UN-COMPLIED AND ONLY AT THE FAG END OF THE TIME BARRING PERIOD FOR MAKING THE ASSESSMENT AVAILABLE WITH THE A O I.E. ON 29-12-2010 THE A R OF THE APPELLANT PROVIDED DETAILS OF IMMOVAB LE PROPERTY SOLD AND THE CAPITAL GAINS EARNED THEREFROM. THIS VERY CONDUCT O F THE APPELLANT PRIMA FACIE ESTABLISHES THAT THE APPELLANT WAS WILLFULLY ATTEMP TING TO CONCEAL TRUE INFORMATION FROM DISCLOSURE BEFORE THE A O OR ATLEAS T WAS ATTEMPTING TO PROVIDE THE SAME AT A DATE WHEN NO MEANINGFUL VERIF ICATION OF SUBMISSIONS MADE AND EVIDENCES PRODUCED CAN BE MADE. DURING THE COURSE OF CURRENT APPELLATE PROCEEDINGS THE APPELLANT HAS PRIMARILY ARGUED THAT THE CAPITAL GAINS WERE DISCLOSED BY HIM AND HENCE NO ADDITION A ND CONSEQUENT PENALTY WAS PERMISSIBLE. THE ARGUMENTS OF THE APPELLANT ARE ACTUALLY SELF DEFEATING AND SELF CONTRADICTORY WHEN EXAMINED IN THE LIGHT O F FACTS ON RECORDS. FACTS AVAILABLE ON THE RECORDS HOWEVER INDICATE THAT THE CLAIM OF THE APPELLANT IS TOTALLY UNTENABLE AND NOT SUPPORTED BY FACTS ON REC ORDS. PERUSAL OF THE RETURN OF INCOME FILED BY THE APPELLANT ON 26-3-2009 CLEAR LY INDICATES THAT NO INCOME UNDER THE HEAD CAPITAL GAINS FROM THE IMPUGN ED IMMOVABLE PROPERTY WAS DISCLOSED BY THE APPELLANT IN HIS RETURN. EVIDE NCES ON RECORDS COMPRISING LETTER DATED 1-12-2010 FILED BY APPELLAN T TO THE AO DURING ASSESSMENT PROCEEDINGS INDICATES THAT THE APPELLANT HAD CHALLENGED THE ACTION OF THE AO IN TAXING CAPITAL GAINS IN HIS HANDS ON T HE PREMISE THAT THE IMPUGNED AGRICULTURE LAND SOLD BY HIM WAS NOT A CAP ITAL ASSET AND HENCE THERE CAN BE NO CASE FOR TAXATION OF ANY CAPITAL GA INS. THUS THE ARGUMENT OF THE APPELLANT THAT THE INCOME FROM CAPITAL GAINS WA S DISCLOSED IN THE RETURN IS SELF CONTRADICTORY. ACTUALLY VIDE HIS SUBMISSION DT 18-12-2010 THE APPELLANT PROVIDED A REVISED COMPUTATION OF INCOME WHEREIN THE SAID SHORT TERM CAPITAL GAIN OF RS. 288 475/- WAS OFFERED FOR TAXATION. THE SAME WAS WORKED OUT BY REDUCING FROM THE TOTAL SALE VALUE OF RS. 31 65 800/- PURCHASES / EXPENSES OF RS 28 77 315/-. THUS IT IS CRYSTAL C LEAR THAT NO CAPITAL GAINS WAS DISCLOSED BY THE APPELLANT IN THE ORIGINAL RETU RN OF INCOME AND THAT THE SAME WAS ONLY OFFERED AT THE FAG END OF THE ASSESSM ENT PROCEEDINGS. NOW DISCLOSURE OF AN INCOME SUO MOTO IS DIFFERENT FROM DISCLOSURE OF AN INCOME BY WAY OF REVISED COMPUTATION FILED DURING ASSESSMENT PROCEEDINGS AND THAT TOO AFTER DETECTION BY THE A O. THUS IT IS NOT A CASE WH ERE CERTAIN INCOME WAS SUO MOTO OFFERED OR THAT MATERIAL FOR DETECTION OF SUCH INCOME WAS FILED WITH THE RETURN OF INCOME BUT PURELY A CASE OF A DELIBER ATE ATTEMPT TO CONCEAL THE TRUE PARTICULARS OF INCOME WITH THE OBJECTIVE OF AV OIDING TRUE INCIDENCE OF TAXATION. AS FAR AS QUANTUM OF ADDITION ON WHICH PEN ALTY IMPOSED BY A O IS RESTING IS CONCERNED IT IS SEEN THAT THE ID A O HA S CLEARLY BROUGHT OUT IN THE ASSESSMENT ORDER WHICH HAS BEEN DULY CONFIRMED BY MY ID PREDECESSOR THAT SMC-ITA NO. 3033/AHD/2013 NANDUBHAI NATHABHAI PATEL VS. ITO AY : 2008-09 7 THE CLAIM OF EXPENSES INCURRED MADE BY THE APPELLAN T WAS IN TURN RESTING UPON FALLACIOUS AND INACCURATE PARAMETERS. THE ID A O HAD VIVIDLY RECORDED THAT THE APPELLANT CHOSE TO OFFER THE INCOME FOR TA XATION UNDER THE HEAD CAPITAL GAINS ONLY WHEN HE WAS CONFRONTED WITH PINP OINTED INQUIRIES. DURING THE PENALTY PROCEEDINGS ALSO THE APPELLANT H AS MERELY REPEATED THE ARGUMENTS TAKEN DURING ASSESSMENT PROCEEDINGS. THUS THE APPELLANT HAS SQUARELY FAILED TO DEMONSTRATE WITH COGENT EVIDENCE THAT THE INCOME UNDER THE HEAD CAPITAL GAINS WAS DISCLOSED IN ITS RETURN OF INCOME BEFORE THE DETECTION BY THE A O. FACTS ON RECORDS ALSO INDICATE THAT EVEN AFTER DETECTION OF SUCH INCOME BY THE A O THE APPELLANT ATTEMPTED TO JUSTIFY ITS CLAIM OF CERTAIN EXPENSES ON THE BASIS OF FALSE AND INACCURA TE EVIDENCES AND PROPOSITIONS. WITH A VIEW TO REDUCE THE INCIDENCE O F TAXATION FROM THE DETECTED SALE CONSIDERATION OF RS. 31 65 800/- THE APPELLANT TRIED TO BUILD UP A STORY OF INCURRED EXPENDITURE FOR CONSTRUCTION OF A HOUSE ON THE AGRICULTURE LAND OF RS. 28 77 315/-. THE AO HAS CLEARLY BROUGHT OUT IN THE ASSESSMENT ORDER THAT THE SAID CLAIM OF THE APPELLANT WAS PURE LY A BOGUS CLAIM AND HENCE NOT ALLOWABLE. IN FACT WHILE MAKING THE CLAIM THE APPELLANT ATTEMPTS TO TAKE BENEFIT OF DEDUCTION AVAILABLE U/S. 54 THOUGH THE A PPELLANT ADMITS THAT WHAT WAS CONSTRUCTED IS NOT A RESIDENTIAL PROPERTY BUT J UST A DWELLING UNIT. IT IS A TRITE LAW THAT DEDUCTION U/S. 54 IS AVAILABLE ONLY FOR CONSTRUCTION OF RESIDENTIAL PROPERTY INCOME FROM WHICH IS TAXABLE AS INCOME FROM HOUSE PROPERTY U/S. 23/ 24 OF THE ACT. IT IS PERTINENT TO NOTE THAT HONBLE DELHI HIGH COURT IN THE CASE OF ESCORT FINANCE LTD HAS HE LD THAT PENALTY FOR CONCEALMENT SHALL BE LEVIABLE IN A CASE WHERE IT IS FOUND THAT CLAIM WAS MADE ON FALSE PRESUMPTIONS. SIMILAR VIEW HAS BEEN TAKEN BY HONOURABLE JURISDICTIONAL TRIBUNAL IN THE CASE OF PARAM JEWELS P LTD 131 ITD 197 HONBLE ITAT AHMEDABAD WHEREIN IT WAS HELD THAT PENAL TY IS LEVIABLE IN A CASE WHERE THE APPELLANT MAKES A BOGUS OR FALSE CLA IM. .. 3.9. THE UPSHOT OF ABOVE JUDGMENTS WHICH ARE LATES T ON MATTERS CONCERNING IMPOSITION OF PENALTIES IS THAT THE SAME SHALL BE LEVIABLE IF IT IS FOUND THAT THE CLAIM IS BUILT UPON BOGUS AND FALSE PARAMETERS. SO BEING THE CASE NO LENIENCY CAN BE SHOWN TO THE APPELLANT. CONSEQUENTLY IN VI EW OF THE PECULIAR FACTS OF THE CASE DISCUSSED ABOVE AND IN RESPECTFUL COMPLIAN CE TO THE JUDICIAL RATIOS DISCUSSED THEREIN IT IS HELD THAT THE ACTION OF THE ASSESSING OFFICER IN IMPOSING THE PENALTY ON THE APPELLANT IS BASED ON CORRECT IN TERPRETATION OF LAW AND DOES NOT REQUIRES ANY INTERFERENCE AT THIS STAGE TO RS.8 72 115/- VIDE ORDER DATED 13.01.2012 IS CORRECT AND IS BASED UPON CORRECT INT ERPRETATION OF LAW. ACCORDINGLY THE PENALTY ORDER IS CONFIRMED AND THE GROUNDS OF APPEAL RAISED BY THE APPELLANT IS DISMISSED. 10. AGGRIEVED THE ASSESSEE IS IN SECOND APPEAL. SMC-ITA NO. 3033/AHD/2013 NANDUBHAI NATHABHAI PATEL VS. ITO AY : 2008-09 8 11. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE FACTS AND CIRCUMSTANCES AND CONTENDS THAT IT IS NOT A CASE OF AO THAT EVIDE NCE WAS NOT GIVEN IN RESPECT OF COST OF CONSTRUCTION/IMPROVEMENT. THE A SSESSEE FILED BILLS AND VOUCHERS ALTHOUGH IN THE NAME OF HIS SONS; THEREFO RE IT CANNOT BE HELD THAT THE ASSESSEES CLAIM WAS NOT BACKED BY EVIDENCE. TH E EVIDENCE HAS BEEN REJECTED BASED ON TECHNICALITIES. THE AO HIMSELF H AS GIVEN A FINDING THAT THE ASSESSEE HAS OFFERED THE CAPITAL GAIN SUO MOTO. THE REFORE THERE IS CONTRADICTION IN THE FINDING OF THE LD. AO AND THE LD. CIT(A) THAT THE OFFER OF CAPITAL GAIN WAS NOT VOLUNTARY. THE ITAT IN THE QU ANTUM PROCEEDINGS HAS ALSO HELD THAT THERE WAS POSSIBILITY OF INCURRING E XPENDITURE FOR LEVELING AND PUTTING SOME FERTILIZER ETC. TOWARDS IMPROVEMENT OF THE LAND. THEREFORE THE ASSESSEES CLAIM CANNOT BE HELD TO BE TOTALLY BASEL ESS. SINCE THE EXPLANATION HAS BEEN REJECTED BASED ON CONTRADICTION OF FACTS A ND TECHNICAL REJECTION OF EVIDENCE THIS WAS NOT A FIT CASE TO LEVY PENALTY U /S 271(1)(C). RELIANCE IS PLACED ON HONBLE SUPREME COURT JUDGMENT IN THE CAS E OF RELIANCE PETROPRODUCTS PVT LTD (SUPRA). 12. LD. DR ON THE OTHER HAND VEHEMENTLY CONTENDS THAT:- I) IT IS AN ADMITTED FACT ON RECORD THAT THE ASSES SEE DID NOT DISCLOSE THE INCOME FROM LONG TERM CAPITAL GAIN IN THE ORIGI NAL RETURN OF INCOME AND DID NOT MENTION THE FACT ABOUT THE SALE OF THE PROPERTY. II) WHEN THE AIR INFORMATION WAS CONFRONTED TO THE ASSESSEE THERE WERE ATTEMPTS TO BELATE FURNISHING OF THE INFORMATI ON. THEREAFTER THE CLAIM BASED ON INACCURATE PARTICULARS WAS MAD E TO REDUCE THE CHARGEABLE SHORT TERM CAPITAL GAIN BY INFLATING IN THE NAME OF COST OF IMPROVEMENT. III) NO NA PERMISSION HAS BEEN SOUGHT. SMC-ITA NO. 3033/AHD/2013 NANDUBHAI NATHABHAI PATEL VS. ITO AY : 2008-09 9 IV) AT ONE PLACE ASSESSEE CLAIMS THAT A RESIDENTIAL HOUSE WAS BUILT AND AT OTHER PLACE IT IS CLAIMED THAT THE ASSESSEE WAS CONSTRUCTING A SMALL FARMERS UNIT TOWARDS CULTIVATION AND AGRICUL TURAL WORK. THERE IS INHERENT CONTRADICTION IN ASSESSEES CLAIM AS ON ONE HAND HUGE EXPENDITURE IS CLAIMED AND ON THE OTHER HAND I T IS CLAIMED THAT THERE WAS A SMALL FARMING UNIT. THUS ASSESSE ES CLAIM LACKS ANY BONA FIDES AND THE ASSESSEE H AS FAILED TO SUBSTANTIATE ITS CLAIM. V) THE ASSESSEES CLAIM THAT THE EVIDENCE HAS BEEN REJECTED ON TECHNICAL GROUND HAS NO BASIS INASMUCH AS THE ASSES SEE COULD NOT PRODUCE EVEN A SINGLE BILL TOWARDS FENCING LEVELIN G OR OTHER IMPROVEMENT WORK AS CLAIMED. VI) SINCE THE ASSESSEE FAILED TO SUPPORT ITS CLAIM IN ANY MANNER AND DELIBERATELY FURNISHED INACCURATE PARTICULARS OF HI S INCOME TO REDUCE THE TAX LIABILITY IN RESPECT OF SHORT TERM C APITAL GAIN THE PENALTY WAS RIGHTLY IMPOSED. VII) THE HONBLE SUPREME COURT JUDGMENT IN THE CASE OF RELIANCE PETROPRODUCTS PVT LTD (SUPRA) IS NOT APPLICABLE TO THE ASSESSEES CASE INASMUCH AS THE ASSESSEE DID NOT DISCLOSE THE SALE ITSELF IN THE ORIGINAL RETURN OF INCOME. 13. I HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE LOWER AUT HORITIES. THE FACTS HAVE BEEN NARRATED IN DETAIL AS ABOVE. IN MY CONSIDERED VIEW.. (I) THERE IS NO MERIT IN THE CLAIM OF THE ASSESSEE THAT SUO MOTO OFFER WAS MADE FOR CAPITAL GAINS INASMUCH AS THE ASSESSEE AF TER CONFRONTATION OF AIR INFORMATION FILED DISTORTED COMPUTATION RED UCING THE SHORT TERM CAPITAL GAIN TAX LIABILITY. IT WAS SO BECAUSE NO CHOICE WAS LEFT SMC-ITA NO. 3033/AHD/2013 NANDUBHAI NATHABHAI PATEL VS. ITO AY : 2008-09 10 WITH THE ASSESSEE. THEREFORE THE LD. CIT(A) HAS RI GHTLY HELD THAT THERE IS NO MERIT IN THE ASSESSEES CLAIM IN THIS B EHALF. (II) THE ASSESSEE HAS FAILED TO GIVE A REASONABLE A ND CORROBORATIVE EXPLANATION/EVIDENCE TO SUPPORT ITS CLAIM OF COST O F IMPROVEMENT. SIMILARLY NO PERMISSION FOR CONVERSION OF LAND FRO M AGRICULTURAL TO NON-AGRICULTURAL LAND HAS BEEN OBTAINED. (III) ON ONE HAND IT IS CLAIMED THAT ASSESSEE BUILT A RESIDENTIAL HOUSE AT HUGE COST AND ON THE OTHER HAND THE ASSESSEE ALSO CLAIMED TO HAVE BUILD A SMALL DWELLING UNIT. ASSESSEES EXPLANATIO N LACKS BONA FIDES AND REASONABLENESS. THE EXPLANATION BEING SELF CON TRADICTORY CANNOT BE RELIED ON. (IV) HONBLE SUPREME COURT JUDGMENT IN THE CASE OF RELIANCE PETROPRODUCTS PVT LTD (SUPRA) IS NOT APPLICABLE TO ASSESSEES CASE AS IN THE ORIGINAL RETURN THE ASSESSEE DID NOT DISCLOS E ANY PARTICULARS ABOUT THE SHORT TERM CAPITAL GAIN AND COMPUTATION T HEREOF. THEREFORE IN THE ENTIRETY OF FACTS AND CIRCUMSTAN CES MENTIONED ABOVE I SEE NO INFIRMITY IN THE ORDERS OF THE AUTHORIZES BELOW IN CONFIRMING THE PENALTY; HOWEVER SINCE ITAT HAS GIVEN A MEAGER REL IEF OF RS.1 50 000/- THE PENALTY SHOULD BE CORRESPONDINGLY REDUCED. 14. IN THE RESULT THE ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 30 TH SEPTEMBER 2016 AT AHMEDABAD. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 30/09/2016 *BIJU T. SMC-ITA NO. 3033/AHD/2013 NANDUBHAI NATHABHAI PATEL VS. ITO AY : 2008-09 11 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. / DR ITAT AHMEDABAD 6. / GUARD FILE . / BY ORDER TRUE COPY / ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD