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Income Tax Appellate Tribunal - Jodhpur

Smt. Supriya Kanwar, Jodhpur vs Department Of Income Tax on 14 March, 2016

              IN THE INCOME TAX APPELLATE TRIBUNAL
                     JODHPUR BENCH, JODHPUR

BEFORE SHRI N.S. SAINI, HON'BLE ACCOUNTANT MEMBER AND
    SHRI GEORGE MATHAN, HON'BLE JUDICIAL MEMBER

                       ITA No. 85/JODH/2015
                        (Asst. Year : 2007-08)

ITO, Ward-1(4),              Vs.         Smt. Supriya Kanwar,
Jodhpur.                                 C/o Ashapurna Buildcon Ltd.,
                                         Mahaveer Palace, Near Circuit
                                         House, Dist. Jodhpur (Raj.)

                                         PAN No. AIPPK 8926 N
(Appellant)                              (Respondent)



           Assessee by              :     None.
           Department By            :     Shri S.L. Mourya - DR

           Date of hearing          :     14/03/2016.
     Date of pronouncement          :     14/03/2016.

                               ORDER

PER N.S. SAINI, ACCOUNTANT MEMBER

This is an appeal filed by the Revenue against the order of Commissioner of Income Tax (Appeals)-1, Jodhpur, dated 01/12/2014.

2. The Revenue has raised the following grounds of appeal:-

"1. The ld. CIT(A) has erred in deleting the penalty levied under sec. 271(1)(c) by accepting the decision of the ITAT in ITA No. 362/Jodh/2010 in assessee's own case for A.Y.2007-08 as final decision on the issue where transactions of purchase and sale of land is in nature of trade is pending before the Hon'ble High Court.

2. The appellant craves leave to add, amend or later any or all the grounds of appeal on or before the date of appeal is finally heard for disposal."

3. Brief facts of the case are that the Assessing Officer observed that the assessee was in the line of business of purchase and sale of lands and 05 pieces of agricultural land at Shahajahanpur, which is more than 500 km. away from her residence, which were situated in the NCR where a Global city was being set up on NH-8, were also purchased with a view to earn profit on sale of the same and was clearly part of her activity in the nature of trade. In fact, it is only when the huge profit of Rs. 1,68,72,453/- was earned on sale of these 05 pieces of agricultural land, on which the tax liability of about Rs. 50 Lac or so arose, she thought of deviating from her earlier stand of declaring the profit earned from the activity of purchase and sale of land and declared the profit earned from sale of these land under the head 'agricultural income' with a clear intention to evade the legitimate tax on the profit earned from the business. To escape from the legitimate tax liability she had furnished inaccurate particulars in the return of income filed. Had the Assessing Officer not vigilant, the assessee would have escaped from the tax liability with this devise and would have caused irreparable loss to the exchequer. He, was therefore, fully satisfied that the assessee declared the income earned from sales of these lands as her agricultural income, instead of business income, with a view to evade the legitimate tax and therefore, he levied penalty under sec. 271(1)(c) of the Act being 100% of the tax sought to be levied of Rs. 56,19,240/-.

4. On appeal, Commissioner of Income Tax (Appeals) deleted the levy of penalty on the ground that on appeal filed by the assessee, the Tribunal vide its order dated 29/04/2014 held that the impugned land will not fall within the purview of the capital asset being land situated beyond the prescribed municipal limit and the sale proceeds thereof are not assessable to tax.

5. Departmental Representative relied on the order of the Assessing Officer, whereas none appeared on behalf of the assessee in spite of notice of hearing sent to the assessee.

6. We find that the levy of penalty on the ground of furnishing inaccurate particular of income by the assessee of Rs. 56,19,240/- under sec. 271(1)(c) of the Act was deleted by the Commissioner of Income Tax (Appeals) on the ground that in the quantum appeal filed by the assessee, the addition made was deleted by the Tribunal. We find that the Hon'ble Supreme Court in the case of K.C. Builders and another Vs. ACIT (265 ITR 562) held as under:-

"Where the additions made in the assessment order on the basis of which penalty for concealment is levied, are deleted, there remains no basis at all for levying penalty for concealment and, therefore, in such a case no penalty can survive and the penalty is liable to be cancelled. Ordinarily, penalty cannot stand if the assessment itself is set aside."

Hence, we find no good reason to interfere with the order of the Commissioner of Income Tax (Appeals), which is confirmed and the ground of appeal of the Revenue is dismissed.

7. In the result, appeal of the Revenue is dismissed.

Order Pronounced in the Court at the close of the hearing on Monday, the 14th day of March, 2016 at Jodhpur.

                  Sd/-                                sd/-

       (GEORGE MATHAN)                          (N.S.SAINI)
         Judicial Member                     Accountant Member

Dated : 14 t h March, 2016.

vr/-
                        4
                                ITA No. 85/JODH/2015

Copy to:

  1.   The Assessee.
  2.   The Revenue.
  3.   The CIT
  4.   The CIT(A)
  5.   The D.R.
  6.   Guard file.
                           By order.