CHANDUR B ADVANI, MUMBAI v. ITO-12(3)(1), MUMBAI

ITA 4597/MUM/2019 | 2009-2010
Pronouncement Date: 01-03-2021 | Result: Allowed

Appeal Details

RSA Number 459719914 RSA 2019
Assessee PAN AAFPA0766J
Bench Mumbai
Appeal Number ITA 4597/MUM/2019
Duration Of Justice 1 year(s) 7 month(s) 26 day(s)
Appellant CHANDUR B ADVANI, MUMBAI
Respondent ITO-12(3)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 01-03-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 01-03-2021
Last Hearing Date 14-01-2021
First Hearing Date 14-01-2021
Assessment Year 2009-2010
Appeal Filed On 05-07-2019
Judgment Text
THE INCOME TAX APPELLATE TRIBUNAL C BENCH MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI RAVISH SOOD (JM) I.T.A. NO. 4597/MUM/2019 (ASSESSMENT YEAR 2009-10) CHANDUR B. ADVANI A-2 ANANTA 2 ND FLOOR DR. RAJABALI PATEL ROAD OPP. BREACH CANDY HOSPITAL MUMBAI-400026. PAN : AAFPA0766J VS. ITO-12(3)(1) ROOM NO. 114 1 ST FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI- 400 020. (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI K. GOPAL DEPARTMENT BY MS. SHREEKALA PARDESHI DATE OF HEARING 14 . 0 1 . 20 2 1 DATE OF PRONOUNCEMENT 01.03.2021 O R D E R PER SHAMIM YAHYA (AM) :- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) SUSTAINING THE PENALTY UNDER SECTION 271(1)( C) OF THE I.T. ACT AMOUNTING TO RS. 9 49 777/-. 2. BRIEF FACTS OF THE CASE LEADING TO THE LEVY OF P ENALTY ARE THAT IN THE ASSESSMENT ORDER IN THIS CASE THE ASSESSING OFFICER MADE TWO DISALLOWANCES. FIRST WAS WITH RESPECT TO DENIAL OF CLAIM OF EXEMPT ION AGAINST LONG TERM CAPITAL GAINS AMOUNTING TO RS. 45 83 160/-ON THE GROUND THA T THE INVESTMENT MADE WAS IN EXCESS OF RS. 50 00 000/- IN A PARTICULAR FI NANCIAL YEAR IN TERMS OF SECTION 54EC OF THE ACT. IN THIS REGARD OBSERVATION S BY THE ASSESSING OFFICER ARE AS UNDER :- ON GOING THROUGH THE SUBMISSIONS SUBMITTED DURING THE ASSESSMENT PROCEEDINGS FOR THE YEAR UNDER CONSIDERATION IT IS SE EN THAT DURING THE F.Y. 2008-09 RELEVANT TO A.Y. 2009-10 THE ASSESSEE HAS MA DE FOLLOWING INVESTMENTS IN SPECIFIED BONDS U/S. 54EC OF I.T. ACT 1961. CHANDUR B. ADVANI 2 A. RS. 48 60 000/- IN NON-CONVERTIBLE REDEEMABL E TAXABLE BONDS ISSUED BY NATIONAL HIGHWAY AUTHORITY OF INDIA ON A LONG TER M CAPITAL GAIN OF RS.46 10 130/- FOR A.Y. 2008-09 (F.Y. 2007-08). B. RS. 48 60 0007- IN NON-CONVERTIBLE REDEEMABL E TAXABLE BONDS-SERIES- VIII ISSUED BY RURAL ELECTRIFICATION CORPORATION LTD ON A LONG TERM CAPITAL GAIN OF RS.45 83 160/- FOR A.Y. 2009-10 (F.Y. 2008 -09) THE ASSESSEE HAS MADE THE ABOVE TWO INVESTMENTS IN-A CCORDANCE WITH THE PROVISIONS OF SECTION 54EC OF THE ACT. THE LONG TERM C APITAL GAIN OF RS. 45 83 160/- FOR A.Y. 2009-10 IS CLAIMED AS EXEMPT. THIS IS A VERY PECULIAR STAGE WHERE ONE ASSET WAS SO LD ON 19.02.2008 I.E. DURING THE F.Y. 2007-08 RELEVANT TO A.Y. 2008-09 AND ANOTHER ASSET WAS SOLD ON 23.04.2008 I.E. DURING THE F.Y. 2008-OS RELEVANT TO A.Y. 2009-10 WHICH IS THE YEAR UNDER CONSIDERATION. THUS FOR BOTH THE CAPI TAL GAIN TRANSACTIONS INVESTMENT U/S. 54EC OF THE I.T.ACT 1961 WAS MADE IN F.Y. 2008-09 (A.Y. 2009-10) ITSELF. THEREFORE THE TOTAL AMOUNT OF INVES TMENT IN F.Y. 2008-09 ( A.Y. 2009-10) BEING THE YEAR UNDER CONSIDERATION AM OUNTING TO RS. 97 20 0007- WHICH IS IN EXCESS OF THE UPPER LIMIT OF RS. 50 00 0007- FIXED FOR AN INVESTMENT U/S. 54EC OF THE ACT. THE PROVISO TO SECTION 54EC READ AS : THAT THE INVESTMENT MADE ON OR AFTER THE 1 ST DAY OF APRIL 2007 IN THE LONG TERM SPECIFIED ASSET BY AN ASSESSEE DURING ANY FINANCIAL YEAR DOES NOT EXCEED FIFTY LAKHS RUPEES. (II) DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO SHOW- CAUSE AS TO WHY THE CLAIM OF EXEMPTION OF LTCG OF RS. 45 83 160/- FOR A.Y. 09-10 SHOULD NOT BE DISALLOWED. IN REPLY THE ASSESS EE VIDE ITS AUTHORIZED REPRESENTATIVES LETTER NO. A-5/11-12/01140 STATED AS UN DER: (1) THE ASSESSES HAS SOLD .A RESIDENTIAL FLAT ON FEBRUARY 2008 FOR A CONSIDERATION OF RS. 50 89 5007- AND HAD EARNED CAPITAL GAINS THEREON OF RS. 46 10 130/- ON THE SALE OF SAID FLAT. THE ASSESSEE INVESTED A SUM OF RS. 48 60 000/- IN CAPITAL GAINS BONDS ISSUED BY M/S. NATIONAL HIGH WAY AUTHORITY .WITHIN SIX MONTHS AND CLAIMED THE EXEMPT ION U/S. 54EC OF THE SAID ACT IN HIS RETURN OF INCOME FILED FOR THE A. Y. 20 08-09. (2) THE ASSESSEE THEN SOLD ANOTHER RESIDENTIA L FLAT ON APRIL 23 2008 FOR A SALE CONSIDERATION OF RS. 50 89 5007- AND EARNED CAPITAL GAINS THEREON OF RS. 45 83 160/- ON THE SALE OF THE SAID FLAT. THE ASSES SEE INVESTED RS. 48 60 000/- BEING THE CAPITAL GAINS EARNED IN THE C APITAL GAINS BONDS ISSUED BY M/S RURAL ELECTRIFICATION CORPORATION LTD WITHIN SIX MONTHS AND CLAIMED THE EXEMPTION U/S. 54EC OF THE SAID ACT IN HIS RETURN OF INCOME FILED FOR THE A. Y. 2009-10. (3) THE ASSESSEE HAD SOLD THE SAID TWO FLATS IN TWO DIFFERENT FINANCIAL YEARS AND THE LIMIT CONTAINED THEREIN IS APPLICABLE FOR EVERY FINANCIAL YEAR AND THEREFORE THE SAID EXEMPTION U/S. 54EC OF THE SAID ACT SHOULD BE ALLOWED IN BOTH THE YEARS. ' CHANDUR B. ADVANI 3 THE CONTENTION OF THE' ASSESSEE IS NOT ACCEPTABLE IN V IEW OF THE- UPPER LIMIT HAVING BEEN SPECIFIED IN THE PROVISO TO SECTION 54EC OF THE ACT WHEREIN IT CLEARLY STATES THAT THE INVESTMENT IN A PARTICULAR FINAN CIAL YEAR SHOULD NOT EXCEED FIFTY LAKH RUPEES. FURTHER THE UPPER LIMIT AS SPECIFIED IN SECTION 54EC OF THE I.T.ACT IS THE LIMIT WITH RESPECT TO AN 'AMOUNT' AND NO. OF ASSETS SOLD DU RING THE YEAR'. (III) ON GOING THROUGH THE STATEMENT OF AFFAIRS AND STAT EMENTS OF THE BANK ACCOUNTS SUBMITTED BY THE ASSESSEE IT IS CRYSTAL CLEAR THAT THE ASSESSEE HAS INVESTED RS.97 20 000/- ( RS. 48 60 000/- X 2 ) IN A PARTICULAR FINANCIAL YEAR AND VIOLATED THE PROVISIONS OF SECTION 54EC OF THE I. T.ACT 1961. IN VIEW OF THE ABOVE LONG TERM CAPITAL GAIN CLAIMED EXEMPT AT RS. 45 83 160/- IS DISALLOWED/FEEING AN INVESTMENT MADE IN EXCESS OF RS. 50 LAKHS IN A PARTICULAR FINANCIAL YEAR. 3. ANOTHER ADDITION MADE BY THE ASSESSING OFFICER W AS WITH RESPECT TO INTEREST RECEIPT AS REFLECTED IN THE ITS DETAILS. T HAT THERE WAS SHORTFALL OF RS. 54 822/- IN INTEREST RECEIPTS. THE ASSESSEE HAS EXP LAINED THAT THIS WAS BY MISTAKE AND CERTAIN FDS WERE NOT ACCOUNTED FOR IN C OMPUTING INTEREST. PENALTY WAS ALSO LEVIED IN THIS REGARD. THE ASSESSE ES PLEA THAT WRONG CLAIM U/S. 54EC WAS DUE TO WRONG ADVICE OF THE PROFESSION AL WAS REJECTED BY THE ASSESSING OFFICER. EXPLANATION REGARDING INADVERTEN T MISTAKE IN INTEREST INCOME WAS ALSO REJECTED BY THE ASSESSING OFFICER A ND PENALTY WAS LEVIED. 4. UPON ASSESSEES APPEAL LEARNED CIT(A) REPRODUCED ASSESSING OFFICERS OBSERVATION AS WELL AS ASSESSEES SUBMISSION. THERE AFTER SHE REFERRED TO CASE LAWS AND WITHOUT POINTING OUT HOW THESE CASE LAWS A RE RELEVANT CONFIRMED THE PENALTY. 5. AGAINST THIS ORDER ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. AS REGARDS DENIAL OF EXEMPTION U/S. 54EC WE NOTE THAT ASSESSE ES CLAIM WAS DENIED ON THE SOLE GROUND THAT AS PER THE PROVISIONS OF THE A CT INVESTMENTS CANNOT EXCEED RS. 50 LAKHS IN ONE FINANCIAL YEAR. FACTS OF THE CASE AS NARRATED BY THE ASSESSING OFFICER ABOVE CLEARLY INDICATE THAT T HERE WAS SOME CONFUSION IN CHANDUR B. ADVANI 4 THIS REGARD AS ASSESSEE HAD MADE TWO INVESTMENTS IN TWO YEARS AND MADE ONE CLAIM FOR BOTH THE AMOUNTS. 7. FURTHERMORE THERE WAS NO CASE OF CONCEALMENT OR FURNISHING INACCURATE PARTICULARS AS EVERYTHING WAS DISCLOSED. THE ASSESSEES CLAIM CAN ALSO NOT BE SAID TO BE EX FACIE BOGUS. IN THESE CIR CUMSTANCES THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (322 ITR 158) COMES TO RESCUE THE ASSESSEE. IN THIS CASE IT WAS EXPOUNDED THAT THE REJECTION OF CLAIM BY THE ASSESSING OFFICER CAN NOT IPSO FACTO LEAD TO THE CONCLUSION THAT THE ASSESSEE DESERVES TO BE VISITED WITH REGOURS OF PENALTY U/.S 271(1)(C) OF THE ACT. 8. MOREOVER WE ALSO NOTE THAT HON'BLE SUPREME COUR T IN THE CASE OF HINDUSTAN STEEL VS. STATE OF ORISSA (83 ITR 26) THR OUGH LARGER BENCH HAD EXPOUNDED THAT THE AUTHORITIES MAY NOT LEVY PENALTY IF THE CONDUCT OF THE ASSESSEE IS NOT FOUND TO BE CONTUMACIOUS. WE FIND T HAT ON THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE THE SUBMISSIONS OF THE ASSESSEE AND EXPLANATIONS ARE NOT EX FACIE BOGUS OR CONTUMACIOUS . 9. AS REGARDS THE ISSUE OF SHORTFALL IN THE DISCLOS URE OF INTEREST INCOME WE FIND THAT THE ASSESSEES EXPLANATION DESERVES TO BE ACCEPTED. WHEN INTEREST AMOUNT IS ALREADY DISCLOSED TO THE DEPARTMENT THROU GH ITS DETAILS THERE IS NO REASON WHY THE ASSESSEE WOULD DELIBERATELY TRY TO C ONCEAL THE INTEREST INCOME. OUR ADJUDICATION AND REFERENCE OF CASE LAWS ON THE EARLIER ISSUES ARE ALSO APPLICABLE ON THIS ISSUE. 10. ACCORDINGLY IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENT WE SET ASIDE THE ORDERS OF THE AUTHORITI ES BELOW AND DIRECT THAT THE PENALTY SHOULD BE DELETED. CHANDUR B. ADVANI 5 11. IN THE RESULT THIS APPEAL BY THE ASSESSEE STAN DS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1.3.2021. SD/- SD/- (RAVISH SOOD) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 01/03/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR ITAT MUMBAI 6. GUARD FILE. BY ORDER //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT MUMBAI