DCIT 9(1), MUMBAI v. DELTA FORGE P. LTD, MUMBAI

ITA 3607/MUM/2010 | 2004-2005
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 360719914 RSA 2010
Assessee PAN AAACD2012J
Bench Mumbai
Appeal Number ITA 3607/MUM/2010
Duration Of Justice 1 year(s) 2 month(s) 16 day(s)
Appellant DCIT 9(1), MUMBAI
Respondent DELTA FORGE P. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 22-07-2011
Assessment Year 2004-2005
Appeal Filed On 06-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI R V EASWAR PRESIDENT AND SHRI RAJENDRA SINGH ACCOUNTANT MEMBER I T A NO: 3607/MUM/2010 (ASSESSMENT YEAR: 2004-05) DEPUTY COMMISSIONER OF INCOME TAX 9(1) APPELLANT MUMBAI VS M/S DELTA FORGE PRIVATE LIMITED MUMBAI RESPONDEN T (PAN: AAACD2012J) ASSESSEE BY: MR KESHAV B BHUJLE REVENUE BY: MR G K NAIR O R D E R R V EASWAR PRESIDENT: THIS APPEAL BY THE DEPARTMENT RELATES TO THE ASSES SMENT YEAR 2004-05 AND THE ONLY GROUND TAKEN IS AS UNDER: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE PENALTY U/S 271(1)(C) OF ` 22 33 119/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD CONCEALED INCOME BY FILING INACCURATE PARTICULARS BY NOT ADOPTING THE STAMP DUTY VALUATION AND ADOPTING THE MARKET VALUE FOR THE PURPOSE OF COMPUTING SHORT TERM CAPITAL GAIN U/S 50C OF THE I. T. ACT . 2. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINES S OF FORGING CASTING AND STAMPING OF METALS MACHINERY PARTS ETC. IT FILED RETURN OF INCOME DECLARING A TOTAL INCOME OF ` 31 93 600/-. WHILE COMPLETING THE ASSESSMENT UNDER SECTION 144 O F THE INCOME TAX ACT 1961 THE ASSESSING OFFICER NOTICED THAT T HE ASSESSEE HAD SOLD THE OFFICE PREMISES AT EMBASSY CENTRE NARIMAN POINT MUMBAI. FOR THE PURPOSE OF COMPUTING THE CAPITAL G AINS HE INVOKED ITA NO: 3607/MUM/2010 2 SECTION 50C AND ADOPTED THE STAMP DUTY VALUE OF ` 85 48 800/- AS AGAINST THE DECLARED SALE PRICE OF ` 51 81 250/-. ON APPEAL THE CIT(A) REJECTED THE ASSESSEES REQUEST THAT A REFER ENCE SHOULD BE MADE TO THE DVO FOR FINDING OUT THE VALUE OF THE PR OPERTY AND CONFIRMED THE ASSESSMENT. THE ASSESSEE CARRIED THE MATTER IN FURTHER APPEAL BEFORE THE TRIBUNAL IN ITA NO: 2038/ MUM/2008. BY ORDER DATED 27.05.2009 THE TRIBUNAL RESTORED THE MA TTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION THAT HE S HOULD MAKE A REFERENCE TO THE DVO AS PER THE PROVISIONS OF SECTI ON 50C FOR DETERMINING THE MARKET VALUE OF THE PROPERTY SOLD B Y THE ASSESSEE. A COPY OF THE ORDER OF THE TRIBUNAL HAS BEEN PLACED ON RECORD. 3. THE ASSESSING OFFICER THEREAFTER INITIATED PROCE EDINGS FOR PENALTY UNDER SECTION 271(1)(C) OF THE ACT FOR CONC EALMENT OF INCOME. IN REPLY TO THE PENALTY PROCEEDINGS THE AS SESSEE SUBMITTED THAT EVEN IN THE FOOT NOTE APPENDED TO TH E RETURN OF INCOME IT HAD RAISED THE OBJECTION THAT THE ASSESSI NG OFFICER SHOULD MAKE A REFERENCE TO THE DVO FOR DETERMINING THE MAR KET VALUE OF THE PROPERTY IN CASE THE DECLARED SALE PRICE IS NOT ADOPTED FOR COMPUTING THE CAPITAL GAINS. THE ASSESSEE THUS SUB MITTED THAT ALL THE FACTS MATERIAL TO THE COMPLETION OF ITS INCOME WERE DISCLOSED AND THE VIEW TAKEN BY THE DEPARTMENTAL AUTHORITIES WAS DISPUTABLE IN NATURE AND THEREFORE THERE WAS NO MERIT IN THE P ENALTY PROCEEDINGS. THESE OBJECTIONS WERE OVERRULED BY TH E ASSESSING OFFICER WHO IMPOSED THE PENALTY OF ` 22 33 119/- BY ORDER DATED 30.03.2009. ITA NO: 3607/MUM/2010 3 4. ON APPEAL THE CIT(A) NOTED THE ORDER OF THE TRI BUNAL IN THE ASSESSEES OWN CASE (SUPRA) AND HELD THAT NO PENALT Y CAN BE IMPOSED ON THE ASSESSEE FOR CONCEALMENT OF INCOME. HE ALSO REFERRED TO THE NOTE APPENDED TO THE RETURN OF INCO ME AND HELD THAT THOUGH THE ASSESSEE HAD DRAWN THE ATTENTION OF THE ASSESSING OFFICER TO THE NEED TO REFER THE MARKET VALUE OF TH E PROPERTY TO THE VALUATION OFFICER THE ASSESSING OFFICER DID NOT DO SO. ACCORDING TO THE CIT(A) THE PRIMARY FACTS WERE DISCLOSED BY THE ASSESSEE AND IT IS ONLY FROM THEM THAT THE ASSESSING OFFICER DREW T HE LEGAL INFERENCES AND IN SUCH A CASE NO PENALTY CAN BE IMP OSED FOR CONCEALMENT OF INCOME MERELY ON THE GROUND THAT THE INFERENCES WERE CONTRARY TO WHAT THE ASSESSEE CONTENDED FOR. THE CIT(A) ALSO NOTICED THAT THE TRIBUNAL IN ITS ORDER CITED SUPRA HAD HELD THAT SUB- SECTION (2) OF SECTION 50C REQUIRED THAT IF THE ASS ESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE VALUATION ADO PTED BY THE STAMP VALUATION AUTHORITY IS MORE THAN THE FAIR MAR KET VALUE THEN THE ASSESSING OFFICER MAY REFER THE MATTER TO THE V ALUATION OFFICER. IT WAS HELD BY THE TRIBUNAL FOLLOWING AN ORDER OF THE CO-ORDINATE BENCH IN THE CASE OF SHRI VASANT K NATEKAR VS. ITO ITA NO: 4837/MUM/2007 DATED 19.02.2009 THAT ONCE THE CONDI TIONS PROVIDED IN THE SUB-SECTION WERE FULFILLED THEN THE ASSESSING OFFICER SHALL REFER THE MATTER OF VALUATION OF THE CAPITAL ASSET TO THE DVO. IN THE IMPUGNED ORDER THE CIT(A) REFERRED TO ALL THESE ASPECTS NOTICED BY THE TRIBUNAL IN THE ORDER CITED SUPRA AND HELD T HAT NO INACCURATE PARTICULARS WERE FURNISHED BY THE ASSESSEE NOR WAS THE EXPLANATION ADDUCED BY HIM FOUND TO BE FALSE AND THAT THE ASSES SEES ITA NO: 3607/MUM/2010 4 EXPLANATION WAS ALSO SUBSTANTIATED BY THE ORDER OF THE TRIBUNAL. IN THIS VIEW OF THE MATTER HE CANCELLED THE PENALTY. 5. THE REVENUE IS IN APPEAL. SUFFICE TO SAY THAT S INCE THE TRIBUNAL HAS SET ASIDE THE ASSESSMENT AND DIRECTED THE ASSESSING OFFICER TO REFRAME THE SAME AFTER MAKING REFERENCE TO THE DVO UNDER SECTION 50C(2) OF THE ACT THE PENALTY AS LEV IED BY THE ASSESSING OFFICER CANNOT STAND AND ON THIS GROUND A LONE IT HAS TO BE CANCELLED. WITHOUT THEREFORE EXAMINING THE LEVY OF PENALTY ON MERITS FOR THE PRESENT WE UPHOLD THE ORDER OF THE CIT(A) ON THE GROUND THAT SINCE THE ASSESSMENT ORDER ITSELF HAS B EEN SET ASIDE THE PENALTY HAS NO LEGS TO STAND. IN THAT VIEW OF THE MATTER WE CONFIRM THE ULTIMATE DECISION OF THE CIT(A) TO CANC EL THE PENALTY AND DISMISS THE APPEAL OF THE REVENUE WITH NO ORDER AS TO COSTS. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JULY 2011. SD/- SD/- (RAJENDRA SINGH) (R V EASWAR) ACCOUNTANT MEMBER PRESIDE NT MUMBAI DATED 22 ND JULY 2011 SALDANHA COPY TO: 1. M/S DELTA FORGE PRIVATE LIMITED 1 JER MANSION WAMAN RAO PUNDALIK MARG BANDRA (WEST) MUMBAI 400 050 2. DCIT 9(1) MUMBAI 3. CIT-9 MUMBAI 4. CIT(A)-19 MUMBAI 5. DR D BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR ITAT MUMBAI