ACIT, Agra v. Sushil Chand Gupta, Agra

ITA 85/AGR/2009 | 2001-2002
Pronouncement Date: 27-08-2010 | Result: Dismissed

Appeal Details

RSA Number 8520314 RSA 2009
Assessee PAN ABPPG1077P
Bench Agra
Appeal Number ITA 85/AGR/2009
Duration Of Justice 1 year(s) 5 month(s) 24 day(s)
Appellant ACIT, Agra
Respondent Sushil Chand Gupta, Agra
Appeal Type Income Tax Appeal
Pronouncement Date 27-08-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 27-08-2010
Date Of Final Hearing 20-07-2010
Next Hearing Date 20-07-2010
Assessment Year 2001-2002
Appeal Filed On 05-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI R.K. GUPTA JUDICIAL MEMBER AND SHRI P.K. BANSAL ACCOUNTANT MEMBER ITA NO.85/AGR/2009 ASST. YEAR: 2001-02 A.C.I.T. CIRCLE-1 AGRA VS. SHRI SUSHIL CHAND G UPTA C/O. M/S. APEX CONSTRUCTION SANJAY PLACE AGRA. (PAN : ABPPG 1077 P). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINOD KUMAR JR. D.R. RESPONDENT BY : SHRI R.C. TOMAR I.T.P. AND SHRI S.M. GUPTA ADVOCATE ORDER PER P.K. BANSAL A.M.: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) DATED 23.12.2008 BY WHICH THE CIT(A) DELETED THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT 1961 (THE ACT HEREINAFTER). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FURNISHED HIS ORIGINAL RETURN ON 31.10.2001 DECLARING AN INCOME OF RS.7 84 429/- INC LUDING THE LONG TERM CAPITAL GAIN (LTCG) OF RS.5 63 104/- ON SALE OF SHARES. SUBSEQUENTLY O N 09.03.2005 THE ASSESSEE FILED A REVISED RETURN SHOWING INCOME OF RS.8 10 199/- IN WHICH THE SUM OF RS.5 88 874/- WAS SHOWN AS INCOME FROM OTHER SOURCES INSTEAD OF LTCG AS SHOWN IN THE ORIGINAL RETURN. THE A.O. TREATED THE REVISED RETURN TO BE INVALID AS FILED BEYOND THE ST IPULATED PERIOD AND INITIATED PROCEEDINGS UNDER 2 SECTION 147 OF THE ACT. ULTIMATELY THE ASSESSMENT WAS COMPLETED ACCEPTING THE INCOME ON THE SALE OF SHARES AT RS.5 88 874/- AND A SUM OF RS.8 0 93/- WAS ADDED AT THE RATE OF 1.5% IN THE SALE CONSIDERATION OF THE SHARES. THE A.O. INITIATED TH E PENALTY PROCEEDINGS UNDER SECTION 271(1)(C). THE A.O. IMPOSED PENALTY UNDER SECTION 271(1)(C) OF THE ACT AND LEVIED THE SAME AT RS.2 09 795/- HOLDING THAT THE ASSESSEE HAS FURNISH ED INACCURATE PARTICULARS OF HIS INCOME AND THEREBY HAS CONCEALED HIS CORRECT PARTICULARS AND I S THEREFORE LIABLE FOR IMPOSITION OF PENALTY. WHEN THE MATTER WENT BEFORE THE CIT(A) THE CIT(A) DELETED THE PENALTY BY OBSERVING AS UNDER :- 4. I HAVE CONSIDERED THE RIVAL CONTENTIONS CAREFUL LY. IN THE COMPARABLE CASE OF SHRI ASHOK KUMAR GUPTA FOR A.Y. 1998-9 THE APPE LLANT HAD FILED HIS RETURN OF INCOME SHOWING LONG TERM CAPITAL GAINS ON SALE OF S HARES THROUGH BROKEN M/S KISHAN LAL MONGA AND CO. NEW DELHI ON 14.06.2004. ON THE BASIS OF SOME NEWSPAPERS REPORT THE APPELLANT FILED A LETTER BEF ORE ADIT (INV.) AGRA AND SURRENDERED THE LONG TERM CAPITAL GAIN OFFERING THE SAME TO BE TAXED AT NORMAL RATE. ON THE BASIS OF INFORMATION RECEIVED FROM ADD L. ADIT (INV.) AGRA THE REASSESSMENT PROCEEDINGS WERE INITIATED BY THE AO B Y ISSUE OF NOTICE U/S. 148 OF THE ACT. DURING THE COURSE OF REASSESSMENT PROCEED INGS THE APPELLANT SUBMITTED THAT THE REVISED RETURN HAS ALREADY BEEN FILED BY H IM AND IN THE SAID REVISED RETURN THE APPELLANT HAD OFFERED THE CAPITAL GAINS TO BE TAXED AT NORMAL RATE. ON THIS BASIS THE APPELLANT ARGUED THAT THERE IS NO E SCAPEMENT OF INCOME. THE AO REJECTED THE APPELLANTS CLAIM STATING THAT THE RET URN WAS FILED AFTER INQUIRY WAS MADE BY THE DEPARTMENT WHICH EXPOSED THE BOGUS NATU RE OF THE TRANSACTIONS. HENCE THE SURRENDER COULD NOT BE SAID TO BE VOLUNT ARY PENALTY PROCEEDINGS WERE INITIATED U/S 271(1)(C) OF THE ACT. THE APPELLANT C ONTENDED BEFORE THE AO THAT ALL FACTS HAVE BEEN DULY DISCLOSED IN THE RETURN AND TH E INCOME SHOWN WAS DERIVED FROM SALE OF SHARES. THEREFORE IT CANNOT BE TREATE D AS A CASE WHERE PARTICULARS OF INCOME HAVE BEEN CONCEALED OR INACCURATE PARTICULAR S HAVE BEEN FURNISHED. THE APPELLANT RELIED ON VARIOUS JUDICIAL DECISIONS AS U NDER: ITAT AGRA BENCH IN THE APPEAL OF SHRI KISHAN PRASA D AGARWAL CIT(A)-I AGRA IN APPEAL OF SHRI RAM KUMAR GOYAL ( HUF) ITO VS. FASHION WAYS 77 TTJ 59 (ASR BENCH) CIT VS.VED PRAKASH 269 ITR255 (P &H) IT WAS ALSO CONTENDED BY THE APPELLANT THAT IN T HE IDENTICAL CASE OF SMT. BHAWANA GUPTA THE APPELLANT SURRENDERED THE LONG T ERM CAPITAL GAIN AS INCOME FROM OTHER SOURCES DURING ASSESSMENT PROCEEDINGS AN D THE ACIT-I AGRA DROPPED 3 PENALTY PROCEEDINGS SUBSEQUENTLY PROCEEDINGS INIT IATED U/S 263 OF THE ACT WERE WITHDRAWN BY THE CIT-I AGRA VIDE HIS ORDER DATED 17 .03.2006. ON CONSIDERATION OF AFORESAID FACTS THE LD. CIT (A)-II AGRA TOOK THE VIEW THAT THE APPELLANT HAD OFFERED THE ENTIRE CAPITAL G AINS TO BE TAXED @ NORMAL RATE AND DEPOSITED ADDITIONAL TAX AS PER SUCH SURRENDER AND FILED THE REVISED RETURN BEFORE THE AO. IT WAS MUCH AFTER THE FILING OF THE REVISED RETURN THAT PROCEEDINGS U/S. 147 WERE INITIATED WHICH CLEARLY INDICATES THA T THE APPELLANT HAD OFFERED THE CAPITAL GAINS TO BE TAXED AS INCOME FROM OTHER SOUR CES PRIOR TO ANY INQUIRY OR DETECTION BY THE AO. ACCORDINGLY THE LD. CIT(A)-II AGRA HELD THAT PENALTY IMPOSED U/S.271(1)(C) OF THE ACT IN RESPECT OF SURR ENDERED AMOUNT WAS NOT JUSTIFIED AND DELETED THE SAME. (II) ON SIMILAR FACTS LD. CIT(A)-II AGRA DELETED T HE PENALTY U/S.271(1)(C) OF THE ACT IN THE CASE OF SHRI CHANDRA SHEKHAR GUPTA F OR A.Y.1998-99. (III) IN THE CASE OF SHRI UMESH KUMAR GOYAL HUF VS .ACIT CIR.4(1) AGRA A.Y.2001-02 THE HONBLE ITAT AGRA BENCH AGRA DEL ETED THE PENALTY IMPOSED OBSERVING THAT AFTER A GAP OF ALMOST FOUR YEARS TH E APPELLANT COULD NOT GIVE PARTICULARS OF THE PURCHASERS OF THE SHARES AS THE TRANSFER DEED AND RELEVANT SHARE CERTIFICATES HAD BEEN HANDED OVER TO THE BROKER. TH E PURCHASES OF THE SHARES WERE UNDISPUTED AS THE RELEVANT INVESTMENT HAD BEEN REFL ECTED IN THE BALANCE SHEET OF THE PRECEDING PREVIOUS YEAR. THE HONBLE ITAT OBSER VED THAT NOWHERE OTHER IN THE ASSESSMENT ORDER OR IN THE PENALTY ORDER THE E XPLANATION FILED BY THE APPELLANT HAD BEEN SPECIFICALLY HELD TO BE NOT ACCE PTABLE. THE EVIDENCES RELIED UPON BY THE APPELLANT HAD NOT BEEN REFUTED WITH ANY COGENT MATERIAL. IN THOSE CIRCUMSTANCES PENALTY IMPOSED U/S.271(1)(C) WAS NO T SUSTAINABLE AND HENCE DELETED. (IV) IN THE CASE OF SHRI ANAND SWAROOP GUPTA HUF A SSESSMENT FOR A.Y.2002- 2003 WAS COMPLETED ON TOTAL INCOME OF RS.13 34 580/ - AS AGAINST RETURNED INCOME OF RS.13 30 560/- WHICH INCLUDED INCOME OF RS.12 70 844/- FROM LONG TERM CAPITAL GAIN ON SALE OF SHARES OF TITAN SECURITIES LTD. AND BESTY GROWTH FIN LTD. THROUGH MKM FINSEC. PVT. LTD. PENALTY PROCEED INGS U/S.271(1)(C) WERE INITIATED WHICH WERE SUBSEQUENTLY DROPPED AFTER CON SIDERING THE ASSESSEES EXPLANATION. A DETAILED NOTICE U/S 263 WAS ISSUED T O THE ASSESSEE TO SHOW WHY THE PENALTY ORDER U/S. 271(1)(C) SHOULD NOT BE REVISED U/S.263. BEFORE THE LD. CIT-I AGRA THE AR OF THE ASSESSEE CONTENDED THAT THE ASSE SSEE HAD SURRENDERED HIS INCOME TO BE ASSESSED UNDER THE HEAD OTHER SOURCES TO AVOID LONG DRAWN ASSESSMENT AND LITIGATION AND IN ORDER TO BUY PEACE OF MIND SUBJECT TO THE CONDITION THAT NO PENAL ACTION WOULD BE TAKEN. THE AO HAD NOT BROUGHT ANYTHING ON RECORD TO PROVE THAT THE SALE OF SHARES WAS NOT GENUINE AND AS SUCH NO CONCEALMENT OF INCOME HAS BEEN PROVED BY THE AO. WH ATEVER EVIDENCE IS REQUIRED WAS FURNISHED. ON CONSIDERATION OF THE FACTS OF THE CASE PROCEEDINGS U/S.263 WERE DROPPED. 4 (V) PROCEEDING U/S. 263 OF THE ACT WERE ALSO DROPPE D ON SIMILAR FACTS IN THE CASE OF SMT. SHARDA DEVI GUPTA FOR A.Y.2002-03. (VI) IN THE CASE OF KUMARI SAUMYA AGARWAL FOR A.Y.2 003-04 THE ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAINS ON SALE OF SHARE S HELD TO BE INCOME FROM OTHER SOURCES WAS DELETED BY THE HONBLE ITAT AGRA ON T HE GROUND THAT THERE WAS NO EVIDENCE TO SHOW THAT THESE TRANSACTIONS WERE NOT G ENUINE. THE FACT THAT THE ADDRESS OF THE STOCK BROKERS WAS NOT FOUND TO BE CO RRECT MERELY RAISES DOUBT ABOUT THE GENUINENESS OF THE TRANSACTION. ON COMING TO THIS DECISION THE ITAT AGRA RELIED UPON THE DECISION OF THE JODHPUR BENCH OF ITAT IN THE CASE OF ITO VS. SMT. KUSUMLATA AND ON THE DECISION OF HONBLE P UNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ANUPAM KAPOOR REPORTED IN 299 ITR AT PAGE 179. 5. REFERENCE IS MADE TO THE AMENDMENT OF EXPLA NATION 4(B) OF SECTION 271(1)(C) OF THE ACT BY THE FINANCE ACT 2007 WITH RETROSPECTIVE EFFECT FROM 01 ST APRIL 2003 WHEREBY EXPLANATION 4(B) HAS AMENDED AS UNDER: (B) IN ANY CASE TO WHICH EXPLANATION 3 APPLIES (M EANS THE TAX ON THE TOTAL INCOME ASSESSED AS REDUCED BY THE AMOUNT OF ADVANCE TAX TAX DEDUCTED AT SOURCE TAX COLLECTED AT SOURCE AND SELF ASSESSMENT TAX PAI D BEFORE THE ISSUE OF NOTICE UNDER SECTION 148) THE ABOVE PROVISION APPLY W.E.F. A.Y. 2003-04 S PECIFICALLY IN THE CASE OF A PERSON COVERED BY EXPLANATION 3 BEING AN ASSESSEE WHO HAS FAILED WITHOUT REASONABLE CAUSE TO FURNISH A RETURN OF INCOME WHIC H HE IS REQUIRED TO FURNISH US.139 AND NO NOTICE U/S 142 (1) OR NOTICE U/S 48 H AS BEEN ISSUED. IN SUCH CASE THE ASSESSEE SHALL BE DEEMED TO HAVE CONCEALED THE PARTICULARS O HIS INCOME IN RESPECT OF SUCH ASSESSMENT YEAR NOT WITH STANDING THAT SUCH ASSESSEE FURNISHES HIS RETURN IN PURSUANCE OF A NOTICE U/S148. EVEN IN SUCH A CASE FOR THE PURPOSE OF LEVY OF PENALTY U/S 271(1)(C) READ WITH EXPLANATION 4 THE ASSESSEE IS ENTITLED TO REDUCTION OF ADVANCE TAX TDS TCS & SA PAID BEFORE THE ISSUE OF NOTICE U/S 148 FOR THE PURPOSE OF COMPUTING THE AMOUNT OF TAX SOU GHT TO BE EVADED THE ABOVE AMENDED PROVISIONS OF EXPLANATION 4(B ) OF SECTION 271(1)(C) ARE NOT APPLICABLE TO THE APPELLANTS CASE AS THE YEAR IN QUESTION IS A.Y.2001-02 AND THE APPELLANT HAD FILED A RETURN U/S. 139 OF THE AC T. HOWEVER BY THE SAME RATIONALE THE APPELLANT IS FOUND TO HAVE PAID THE E NTIRE SELF ASSESSMENT TAX PRIOR TO ISSUE OF NOTICE U/S 148 OF THE ACT. 5 IN VIEW OF THE FOREGOING PENALTY IMPOSED U/S 2 71(1)(C) OF THE ACT IN RESPECT OF THE LONG TERM CAPITAL GAINS OF RS.5 88 874/- SUR RENDERED FOR TAX IN THE REVISED RETURN IS NOT SUSTAINABLE AND ACCORDINGLY DELETED. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY CONSIDERED THE MATERIAL ON RECORD. WE NOTED FROM THE FACTS THAT THE ASSESSEE HAS SURRENDE RED THE CAPITAL GAIN ON THE PURCHASE OF SALE OF SHARES AMOUNTING TO RS.5 88 874/- AS INCOME FROM OT HER SOURCES BEFORE THE ISSUE OF THE NOTICE BY THE A.O. BY FILING THE REVISED RETURN. THE REVISED RETURN HAS BEEN FURNISHED BY THE ASSESSEE VOLUNTARILY ON THE CONDITION THAT NO PENAL OR OTHER CONSEQUENCE WILL TAKE PLACE AGAINST THE ASSESSEE. THE A.O. MADE THE ASSESSMENT FROM THE RE VISED RETURN BUT IMPOSED PENALTY ON THE BASIS OF THE AMOUNT SURRENDERED BY THE ASSESSEE IN THE REVISED RETURN. THE ASSESSEE IN THIS CASE WAS HAVING THE EVIDENCE FOR THE PURCHASE AND SALE O F SHARES AND HAS DULY DISCLOSED ALL THE PARTICULARS CLAIMED BY THE ASSESSEE THAT HE WAS IN POSSESSION OF THE SHARES IS NOT DISPUTED OR DOUBTED BY THE REVENUE. THE ASSESSEE HAS PAID ALL THE TAX BEFORE THE ISSUANCE OF NOTICE. THE SURRENDER OF THE INCOME BY THE ASSESSEE DOES NOT ME AN THAT THE ASSESSEE HAS FURNISHED THE INACCURATE PARTICULARS OF INCOME. ACTION OF THE AS SESSEE WAS BONAFIDE SO AS TO ABSOLVE HIM FROM THE LEVY OF PENALTY. UNDER SIMILAR CIRCUMSTANCES DELHI BENCH IN THE CASE OF SMT. RAJ RANI MITTAL IN ITA NO.2275/DEL/2009 AS RELIED BY THE LD . A.R. HAS DELETED THE PENALTY. EVEN AGRA BENCH OF THIS TRIBUNAL IN THE CASE OF KUM. RUCHI RA THORE IN ITA NO.97/AGR/2007 TO WHICH THE UNDERSIGNED IS THE AUTHOR HAS DELETED THE PENALTY HOLDING AS UNDER :- WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT WHEN THE ASSESSEE FILED ORIGINAL RETURN OF INCOME HE WAS IN POSSESSION OF VALID DOCUMENTS SHOWING THAT THE AMOUNT RECEIVED BY THE ASSESSEE IS ARISING ON TRANSFER OF SHARES AND GIVING RISE TO LONG TERM CAPITAL GAIN. THE SAM E WAS DULY OFFERED AS INCOME. THE ASSESSEE FILED REVISED RETURN AFTER ISSUANCE OF NOTICE U/S.143(2) BUT PRIOR TO CONDUCTING ANY FURTHER ENQUIRY BY THE ASSESSING OFF ICER. IT IS NOT THE CASE OF THE 6 ASSESSING OFFICER THAT THE REVISED RETURN WAS FILED AFTER THE ASSESSEE WAS CORNERED AND HE COULD NOT EXPLAIN THE GENUINENESS OF CAPITAL GAINS IN VIEW OF THE EVIDENCE IN POSSESSION OF THE ASSESSING OFFICER. RATHER TH E ASSESSING OFFICER DID NOT HAVE IN HIS POSSESSION ANY EVIDENCE TO HOLD THAT THE CAP ITAL GAIN DECLARED BY THE ASSESSEE WAS BOGUS. UNDER SECTION 139(5) OF THE AC T THE ASSESSEE CAN FILE A REVISED RETURN IF HE DISCOVERS ANY OMISSION OR A WR ONG STATEMENT THEREIN. PRIOR TO FILING OF REVISED RETURN THE ASSESSING OFFICER HAD NOT MADE ANY ENQUIRY NOR WAS IN POSSESSION OF ANY INFORMATION THAT THE CLAIM OF ASSESSEE FOR REALIZING LONG TERM CAPITAL GAIN IS BOGUS. EVEN THE ENQUIRY CONDUCTED BY THE DDI WAS AFTER FILING OF THE REVISED RETURN. THEREFORE IT CAN BE SAID THAT THE REVISED RETURN WAS FILED VOLUNTARILY AND IN GOOD FAITH. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SURESH CHAND MITTAL 251 ITR 9 (SC) HELD THAT IN A CASE WHERE THE ASSESSEE ORIGINALLY FILED RETURN SHOWING MEAGER INCOME BUT AFTER ACTION U/S.132 IN RESPONSE TO NOTICE U/S.148 THE ASSESSEE FILED REVI SED RETURN SHOWING HIGHER INCOME AND THE EVENTUAL ASSESSMENTS WERE BASED ON S UCH RETURN PENALTY U/S.271(1)(C) IS NOT LEVIABLE WHERE THE ADDITIONAL INCOME IS OFFERED TO BUY PEACE OF MIND AND TO AVOID LITIGATION. HONBLE SUPREME C OURT HELD THAT WHERE THE CONCLUSION OF THE TRIBUNAL WAS THAT THE ACT OF SURR ENDER WAS VOLUNTARILY DONE BY THE ASSESSEE IN GOOD FAITH IN SUCH A SITUATION PE NALTY IS NOT LEVIABLE. SINCE IN THE PRESENT CASE THE FACTS ARE IDENTICAL WE HOLD THAT THE PENALTY IS NOT LEVIABLE U/S.271(1)(C) OF THE ACT. 4. RESPECTFULLY FOLLOWING THE SAID DECISION SINCE THE FACTS ARE IDENTICAL WE HOLD THAT THE CIT(A) HAS RIGHTLY DELETED THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. 5. IN THE RESULT APPEAL FILED BY THE REVENUE STAND S DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 27.08.2010) SD/- SD/- (R.K. GUPTA) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 27 TH AUGUST 2010. PBN/* 7 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL AGRA TRUE COPY