Income Tax Appellate Tribunal - Jaipur
Shri Rajiv Gupta, Alwar vs Assistant Commissioner Of Income Tax, ... on 18 January, 2018
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IN THE INCOME TAX APPELLATE TRIBUNAL,
JAIPUR BENCHES (SMC), JAIPUR
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BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER
vk;dj vihy la-@ITA No. 845/JP/2017
fu/kZkj.k o"kZ@Assessment Year : 2012-13
Rajiv Gupta, cuke A.C.I.T.,
4-E, Shanti Kunj, Alwar- Vs. Circle-2,
301001. Alwar.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABRPG 6101 E
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal (CA)
jktLo dh vksj ls@ Revenue by : Smt. Poonam Roy (DCIT)
lquokbZ dh rkjh[k@ Date of Hearing : 16/01/2018
mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 18/01/2018
vkns'k@ ORDER
PER: BHAGCHAND, A.M. This is the appeal filed by the assessee emanates from the order of the ld. CIT(A), Alwar dated 17/10/2017 for the A.Y. 2012-13.
2. The assessee has sold agricultural land located at MIA, Alwar on 11/08/2011 for a sale consideration of Rs. 23,00,000/-. The assessee had not filed return of income in time. However, return of income was manually filed on 01/7/2014 declaring income of Rs. 20,82,820/-. The 2 ITA 845/JP/2017_ Rajiv Gupta vs. ACIT return filed was beyond the time limit permitted for filing the return, therefore, the return was a non-est return. On the basis of the information in the return of income, the Assessing Officer issued notice U/s 148 of the Income Tax Act, 1961 (in short the Act) regarding the escapement of income to the tune of Rs. 20,82,822/-. The assessee filed return of income in response to that notice U/s 148 of the Act declaring income at Rs. 32,61,750/-. This was the income after taking into consideration. The provisions of Section 50C of the Act by adopting the value as adopted by the Stamp Duty Authority at Rs. 34,78,750/-. The assessee also had not disclosed the interest income of Rs. 1856/- in the return in response to notice U/s 148 of the Act but the computation of income was raised during the re-assessment proceedings. The Assessing Officer initiated the proceedings U/s 271(1)(c) of the Act and levied the penalty of Rs. 2,43,206/- being 100% of the difference between the tax computed on the assessment and the tax paid by the assessee prior to issuance of notice U/s 148 of the Act. The ld. CIT(A) has sustained the penalty.
3. Now the assessee is in appeal before the ITAT by taking following grounds of appeal:
3 ITA 845/JP/2017_ Rajiv Gupta vs. ACIT "1. The ld. CIT(A) has erred on facts and in law in not considering that in the absence of any specific charge, the penalty levied U/s 271(1)(c) is illegal and bad in law.
2. The ld. CIT(A) has erred on facts and in law in confirming the levy of penalty U/s 271(1)(c) at Rs. 2,43,206/-. He has further erred in ignoring that the income assessed by the A.O. is same as that declared by the assessee and there is neither any concealment of income nor furnishing of inaccurate particulars of income."
4. While pleading on behalf of the assessee, the ld AR has raised various contentions regarding the initiation of penalty proceedings. After hearing both sides, the Bench is of the view that the assessee himself has filed return in response to notice U/s 148 of the Act by disclosing the income more than what he has disclosed in his nonest return filed prior to issuance of notice U/s 148 of the Act. Thus, the assessee was very well aware about the limbs of initiation of penalty under which, the penalty was initiated. The other contention of the ld AR was that the penalty has been levied only on the amount which was offered by the assessee for taxation as per deeming provisions of Section 50C of the Act. In the return of income filed in response to notice U/s 148 except the amount of Rs. 1856/-, the bank interest which was a very petty amount. The same was also disclosed by the assessee during the reassessment proceedings prior to the detection by the Assessing Officer. The ld AR of the assessee also relied on the decisions of the 4 ITA 845/JP/2017_ Rajiv Gupta vs. ACIT various Hon'ble High Courts and ITATs i.e. CIT Vs Madan Teatres Ltd. (2013) 88 DTR 217 (Kol)(HC), CIT Vs Fortune Hotels and Estates Pvt. Ltd. (2015) 232 Taxman 481 (Bom) (HC), Chimanlal Manilal Patel Vs ACIT (2012) ITA No. 508/Adhd/2010 33 CCH 647 (Ahd)(Trib), Anita Beniwal Vs ITO (Jpr Trib) ITA No. 742/JP/12 A.Y. 2008-09 order dated 05/06/2015, DCIT Vs Trans Freight Containers Ltd. ITA No. 2337/Mum/2016 49 CCH 0055 (Mum)(Trib), Kantibhai Mohanbhai Vs. ACIT (2017) 49 CCH 0429 (Ahd)(Trib), Jagat Singh Vs ITO ITA Nos. 5851 and 5852/Del/2016 order dated 28/2/2017 49 CCH 0074 (Del)(Trib).
5. On the other hand, the ld DR has relied on the orders of the authorities below.
6. After hearing both the sides, the Bench hold that the authorities below were not justified in levying and sustaining the penalty levied on the amount of difference between the amount declared by the assessee in the return of income (non-est) prior to issuance of notice U/s 148 of the Act and income offered in the return of income filed in response to notice U/s 148 of the Act after taking into consideration the provisions of Section 50C of the Act. The Hon'ble Kolkata High Court in the case of CIT Vs. Madan Theatres Ltd. (supra) has held as under:
5 ITA 845/JP/2017_ Rajiv Gupta vs. ACIT Assessee sold property. For purpose of stamp duty, value estimated was higher.
AO found that assessee had disclosed sale price much lesser than on which stamp duty was paid. AO fixed sale price at value estimated for stamp duty and proceeded u/s 271(1)(c). Penalty was imposed. CIT(A) allowed assessee's appeal. Held, tribunal dismissed appeal filed by revenue holding that, it was only on account of deeming provisions of section 50C that AO had made addition by adopting sale consideration being value adopted for purpose of stamp valuation. Revenue had not shown as to how assessee could be held to have actually received this. It had also not been shown as to whether any corresponding addition had been made in hands of buyer. As revenue had not been able to dislodge findings of CIT(A) that bona fides of assessee were genuine, findings of CIT(A) were confirmed. Actual amount received was offered for taxation. It was only on basis of deemed consideration that proceedings u/s 271(1)(C) were started. Revenue had failed to produce any iota of evidence that assessee actually received one paise more than amount shown to have been received by him.
The Hon'ble Bombay High Court in the case of CIT Vs. Fortune Hotels and Estates Pvt. Ltd. (supra) has held as under:
Where in respect of sale of a property, matter was referred to DVO who determined sales consideration at a higher amount, that by itself would not amount to furnishing inaccurate particulars of income so as to levy penalty u/s 271(1)(c).
The Coordinate Bench of the Ahmadabad ITAT in the case of Chimanlal Manilal Patel Vs. ACIT (supra) has held as under:
A notice u/s 148 was issued on assessee on ground that in original return of income sales consideration of land was not offered as per provisions of section 50C. In response to notice, assessee filed revised return wherein his share of sales consideration was taken at stamp duty value as per provisions of section 50C. Assessee paid taxes along with interest. AO vide his order u/s 143(3) r.w.s 147 accepted revised return. AO initiated penalty proceedings u/s 271(1)(c).
6 ITA 845/JP/2017_ Rajiv Gupta vs. ACIT Held, it was not case of AO that assessee had received consideration over and above than that declared in sales deed. AO had not disputed consideration received by assessee. Addition had been made on basis of deeming provisions of section 50C. Assessee had furnished all facts of sale, documents/ material before AO. AO had not doubted genuineness of documents/details furnished by assessee. Only because assessee agreed to additions because of deeming provisions it cannot be construed to be filing of inaccurate particulars on part of assessee. Assessee agreed to addition on basis of valuation made by stamp valuation authority cannot be a conclusive proof that sale consideration as per sale agreement was incorrect and wrong. In view of these, penalty cannot be levied on basis of deeming provision. Accordingly, penalty was deleted.
The Coordinate Bench of the Jaipur ITAT in the case of Anita Beniwal Vs. ITO (Jpr.) (Trib.) (supra) has held as under:
"The assessee had shown sale consideration at Rs.8 lacs whereas as per sec. 50C of the Act, the stamp authority has assessed the value of property at Rs.12,35,730/-, there was difference at Rs.4,75,658/- in the capital gain, which has been accepted by the assessee during the course of assessment proceedings. The case laws referred by the assessee are squarely applicable. In this case also, there is no evidence with the revenue to prove that the assessee has received much more than reflected in the return. The addition was on account of deeming provision, therefore, we delete the penalty confirmed by the Ld. CIT(A)."
The Coordinate Bench of Mumbai Tribunal in the case of DCIT vs.Trans Freight Containers Ltd. (supra) has held as under:
7. We find that the issue involved is squarely covered in favour of the assessee by the decision of Hon'ble jurisdictional High Court in the case of CIT Vs M/s fortune hotels and estates private limited in ITA number 1164 of 2012. Vide order dated 26/9/2014 the Hon'ble jurisdictional High Court has upheld the ITAT finding that in case of addition by invoking provisions of section 50C, penalty under section 271(1)C is not sustainable.
7 ITA 845/JP/2017_ Rajiv Gupta vs. ACIT
8. We find that in the present case also assessee has furnished the registered sale deed. The assessing officer has made the addition by invoking deeming provisions of section 50 C. No case has been made out of any incriminating document etc. being found. In such situation assessee cannot be held guilty of furnishing of inaccurate particulars of income or concealment of income. Furthermore the conduct of the assessee cannot be held to be contumacious so as to warrant levy of penalty. This proposition is also supported by the decision rendered by the larger bench of Hon'ble apex court in the case of Hindustan steel Ltd vs state of Orissa 83 ITR 26.
The Coordinate Bench of the Ahmadabad ITAT in the case of Kantibhai Mohanbhai vs. ACIT (supra) has held as under:
Tribunal observed that section 50C is a deeming provision to tax the difference as capital gain where the consideration received as a result of transfer of capital assets, being land or building or both if less than the value adopted by the stamp valuation authority. It is only on account of deeming provisions of section 50C, the AO has made the addition after considering the valuation report of the valuation officer u/s 50C(2) of the act and determined the long term capital gain. The fact remains that the actual amount received was offered for taxation. It is only on the basis of the deemed consideration that the proceedings under Section 271(1)(c) of the act has been started. The revenue has failed to produce any iota of evidence that the assessee actually received one paise more than the amount shown to have been received by him. Court observed that in terms of deeming provisions of section 50C, higher sales consideration of property determined by the DVO did not by itself amount to furnishing inaccurate particulars of income so as to levy penalty under section 271(1)(c) of the act The revenue has also not shown as to how the assessee could be held to have actually received this amount which is in excess of the amount of mentioned in the sale deed . It has also not been shown as to whether any corresponding addition has been made in the hands of the buyer. Tribunal further notice that the addition was made totally by invoking the provision contained in section 50C of the act, therefore, penalty cannot be imposed on the income determined on the basis of deeming provision of section 50C as this solitary does not lead to concealment of income or furnishing of inaccurate particulars of income, 8 ITA 845/JP/2017_ Rajiv Gupta vs. ACIT therefore, Tribunal find ld. CIT(A) is not justified in sustaining the penalty levied by the assessing officer.
The Coordinate Bench of Delhi ITAT in the case of Jagat Singh vs. ITO (supra) has held as under:
Levy of Penalty u/s.271(1) (c)--AO observed that land sold was capital asset within meaning of section 2(14) on which long term capital gains were chargeable to tax-- But neither assessee filed return of income in response to notice u/s. 148 nor furnished any details as required vide notices issued under section 142(1) and 144--Accordingly, AO worked out taxable capital gain in which share of assessee was determined--AO thereafter, imposed penalty u/s 271(1)(c) by observing that as per Explanation-1 of Section 271(1) , assessee failed to offer any explanation--CIT(A), upheld action of AO of imposing penalty--Held, In case of Renu Hingorani vs. ACIT, Mumbai passed in ITA No. 2210/Mum/2010 (AY 2006-07) Tribunal held that AO had not given any finding that actual sale consideration was more than sale consideration admitted and mentioned in income or furnishing inaccurate particulars of income--It was also not case of revenue that assessee failed to furnish relevant record as called by AO to disclose primary facts--Assessee furnished all relevant facts, documents/ material including sale agreement and AO had not doubted genuineness and validity of documents produced before him and sale consideration received by assessee--It could not be said that assessee had not furnished correct particulars of income--Merely because by Stamp Valuation Authority would not be conclusive assessee agreed for addition on basis of valuation made proof that sale consideration as per this agreement was incorrect and wrong--Accordingly addition because of deeming provisions did not ipso facto attract penalty u/s 271(1)(c)--Following decision in case of Renu Hingorani vs. ACIT, Mumbai, penalty in dispute was deleted--Assessee's Appeal allowed.
Considering all these facts and the case laws relied upon, the appeal of the assessee stands allowed to the extent of levy of penalty to the extent of difference of tax between the long term capital gain declared
9 ITA 845/JP/2017_ Rajiv Gupta vs. ACIT prior to the filing of the return of income and income offered in the return of income in response to the notice U/s 148 of the Act. With regard to the bank interest of Rs. 1,856/-, the Bench is of the view that this was a petty amount and the amount was also disclosed during reassessment proceedings prior to detection by the A.O.
7. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 18/01/2018.
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¼Hkkxpan½ (BHAGCHAND) ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 18th January, 2018 *Ranjan vkns'k dh izfrfyfi vxzsf'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Shri Rajiv Gupta, Alwar.
2. izR;FkhZ@ The Respondent- The A.C.I.T., Circle-2, Alwar.
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr¼vihy½@The CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
6. xkMZ QkbZy@ Guard File (ITA No. 845/JP/2017) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar