Income Tax Appellate Tribunal - Mumbai
Chiranjeev Lal Khanna, Mumbai vs Department Of Income Tax on 26 February, 2015
आयकर अपीलीय अिधकरण,
अिधकरण मुंबई
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES 'C' MUMBAI
सव ौी आय.पी. बंसल, याियक सदःय एवं चंि पुजार , लेखा सदःय के सम
BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND
SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER
ITA NO.6005/MUM/2013 (A.Y. 2005-06)
Income Tax Officer 11(2)(2), Shri Chiranjeev Lal Khanna,
Room No.479, 4th Floor, 91, Chiranjeev, Gulmohar Cross
Aaykar Bhavan, M.K.Road, Vs. Road No.4, JVPD Scheme,
Mumbai 400 020 Mumbai 400 049.
(Appellant ) PAN: AABPK 3888K
(Respondent)
Appellant by : Shri Neil Philip.
Respondent by : Shri K.R.Lakshminarayanan
Date of hearing : 26/02/2015
Date of pronouncement : 26/02/2015
ORDER
PER I.P.BANSAL, J.M:
This is an appeal filed by the Revenue and it is directed against order passed by Ld. CIT(A)-3, Mumbai dated 11/07/2013 for assessment year 2005-06. The grounds of appeal read as under:
"On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) was justified in canceling penalty imposed u/s. 271(1)(c) on addition u/s. 50C."
2. For development of old residential house the assessee entered into an agreement with developer who agreed to construct additional accommodation for the assessee out of compensation payable for transfer of development rights. On 2 ITA NO.6005/MUM/2013 (A.Y. 2005-06) such agreement the capital gain was computed by the AO on the basis of stamp value of the property under section 50C of the Income Tax Act,1961 (the Act) and share of the assessee was worked out at Rs.1,91,25,000/- and after reducing the cost of acquisition, exemption under section 54 and 54EC, etc., capital gain was worked at Rs.83,64,438/- and on such addition concealment penalty of Rs.18,77,000/- was levied. Before Ld. CIT(A) it was submitted that concealment penalty could not be levied on such addition and reliance was placed on various decisions to contend that in such cases no concealment penalty could be levied. The cases relied upon before Ld. CIT(A) are as under:
Sr.No. Name of Case A.Y 1. Renu Hingorani vs. ACIT, ITA No.2210/M/10 2006-07 2. Fortune Hotels & Estates P. Ltd. vs. ACIT, ITA No.5403/M/10 2004-05 3. ACIT vs. Kamala Sankaran, ITA No.4761/M/11 2006-07 4. Shri Chimanlal Manilal Patel vs. ACIT, ITA No.508/AHM/2010 2006-07
5. CIT vs. Madan Theatres Ltd., GA No.684/2013 Calcutta High Court Order dated 14/05/2013
6. Basker vs. ACIT, ITA No.997/MADS/12 2007-08
3. Ld. DR submitted that the penalty was rightly levied by AO and it has wrongly been deleted by Ld. CIT(A) and he submitted that the impugned penalty should be restored and order passed by Ld.CIT(A) should be set aside.
4. On the other hand, Ld. AR has filed before us a paper book containing case law and relied upon the following decisions:
Sr.No. Name of Case A.Y
1. Renu Hingorani vs. ACIT, ITA No.2210/M/10 1-6
2. Fortune Hotels & Estates P. Ltd. vs. ACIT, ITA No.5403/M/10, 7-12
A.Y 2004-05
3. ACIT vs. Kamala Sankaran, ITA No.4761/M/11 13-16
4. Shri Chimanlal Manilal Patel vs. ACIT, ITA No.508/AHM/2010, 17-20
A.Y. 2006-07
5. CIT vs. Madan Theatres Ltd., GA No.684/2013 Calcutta High 21-24
3 ITA NO.6005/MUM/2013 (A.Y. 2005-06)
Court Order dated 14/05/2013
6. Basker vs. ACIT, ITA No.997/MADS/12 25-36
7. CIT vs. Fortune Hotels & Estates Pvt. Ltd., ITA No.1164/2012 37-40 of Bombay High Court 4.1 Particular reference was made by him to the decision of Hon'ble Bombay High Court in the case of CIT vs. Fortune Hotels & Estates P. Ltd. vs. ACIT (supra) and special reference was invited to Para-3 of the said order, which read as under:
"3. To this extent there is no dispute and what later on followed the imposition of penalty. The Tribunal held that this cannot be taken as a case of furnishing inaccurate particulars of income inasmuch as there was a registered sale deed and there was consideration mentioned therein. That ground was raised and therefore, the document was forwarded to the Valuer and for determination of the value, by itself would not mean that the Assessee had furnished inaccurate particulars of income or has concealed the income. In these peculiar circumstances the imposition of penalty was not justified, is the conclusion drawn. The larger question posed for our consideration by Mr.Vimal Gupta really does not arise in the peculiar facts of the case. We leave that question and contentions based thereon open for being canvassed in an appropriate case. The Tribunal's order even if containing any reference to some deeming provision will not preclude or prevent the Revenue from raising such contentions. With this clarification and finding that the Tribunal's order does not raise any substantial question of law 'tha( we proceed to dismiss the Appeal. It is, accordingly, dismissed. No costs."
4.2 It was further submitted that Mumbai Tribunal has been taking consistent view that in such cases no penalty can be made and reference was made to the decision mentioned at Sl.No.1, Sl.No.2 and Sl.No.3 of the decisions placed in the paper book. Reference was invited to para-8 of the decision in the case of Renu Hingorani vs. ACIT(surpra), which read as under:
4 ITA NO.6005/MUM/2013 (A.Y. 2005-06)"8. We have considered the rival contentions and relevant record . We find that the AC had made addition of Rs.9,00,824/- being difference between the sale consideration as per sale agreement and the valuation made by the Stamp Valuation Authority. Thus, the addition has been made by the AC by applying the provisions of section 50C of the Act. It is evident from the assessment order that the AC has not questioned the actual consideration received by the assessee but the addition is made purely on the basis of deeming provisions of the Income Tax Act, 1961. The AO has not given any finding that the actual sale consideration is more than the sale consideration admitted and mentioned in the sale agreement. Thus it does not amount to concealment of income of furnishing inaccurate particulars of income. It is also not the case of the revenue that the assessee has failed to furnish the relevant record as called by the AO to disclose the primary facts. The assessee has furnished all the relevant facts, documents/material including the sale agreement and the AO has not doubted the genuineness and validity of the documents produced before him and the sale consideration received by the assessee. Under these facts and circumstances, it cannot be said that the assessee has not furnished correct particulars of income. Merely because the assessee agreed for addition on the basis of valuation made by the Stamp Valuation Authority would not be a conclusive proof that the sale consideration as per this agreement was incorrect and wrong. Accordingly the addition because of the deeming provisions does not ipso facto attract the penalty u/s 271(1)(c ). Hence in view of the decision of the Hon'ble Supreme Court in the case of CIT V/s Reliance Petroproducts Pvt.Ltd (supra), the penalty levied u/s 271(1)( c ) is not sustainable. The same is deleted."
4.3 Reference was also made to Para-6 of the decision of Mumbai ITAT in the case of Fortune Hotels & Estates Pvt. Ltd. (supra) which read as under:-
" 6. We have considered the rival submissions. A copy of the return of income filed by the assessee is available at page-1 of the assessee's paper book. The assessee has given the computation of capital gain at Rs. Nil and has further attached the following note:
"NOTE: During the previrn.s year relevant to the assessment year the. assessee company has sold premises 1401, at Laheja Centre, Nariman Point ,Mumbai -21, as per Deed of Sale & Transfer dated 5 ITA NO.6005/MUM/2013 (A.Y. 2005-06) 21-08-2003. The Total Sale Value as per the agreement is Rs 2. 00,00,000/-. However, as per Stamp Duty ct the Market Value of premises is determined at Rs, 3,72.42,000/-. A copy of the Deed of Sale and Transfer & Registration receipt are enclosed with the Return of Income for your reference and record. The assessee company has sold the premises for Rs.2,00,00,000/- and the Capital Gain is calculated on the basis of Sale value as per agreement dated 2 1-08- 2003 at the prevailing market rate. However, Stamp Duty authorities has valued at Rs. 3,72,42,000/- This is to place on record."
It is thus clear that the assessee has placed all the facts before the AO. In the assessment proceedings there has been no finding nor is there any material to show that the assessee received something more than a sum of Rs. 2.00 crores which is the full value of consideration received as per instrument of transfer. Thus it is clear that but for the provisions of section 50C of the Act, the impugned addition for which penalty was imposed would not have been made. We are of the view that the claim made by the assessee in the present case cannot be said to be totally baseless or untenable in law. We are of the view that the decision of the Tribunal in the case of Renu Hingorani (supra) squarely applies to the facts of the present case. We, therefore, direct that the penalty imposed on the assessee be cancelled. The appeal by the assessee is allowed".
This decision is also confirmed by Hon'ble Bombay High Court and relevant observations have been reproduced above.
4.4 Further, reliance is placed on Para-8 & 9 of the decision in the case of ACIT vs. Kamala Sankar (supra), which read as under:
" 8. We have heard both the learned representatives. Also perused the penalty order as well as impugned order. Undisputedly, so far as initial value of the premises stated in the return is concerned, it is Rs. 81 lakhs. Thereafter, the valuation authorities determined the value of the premises as Rs. 1,04,95,778/-. The assessee admitted this value also. Accordingly, paid the tax. Since, the assessee had earlier computed the amount of capital gains on the original sale consideration, therefore, in view of the revaluation amount; the Assessing Officer could always be requested for reference to the valuation officer under the provisions of the Act. As it has been held by the 6 ITA NO.6005/MUM/2013 (A.Y. 2005-06) Ld. CIT (A), if the said the value had been adopted by the stamp authorities as deemed sale consideration, the very purpose of section 50C(2) would be defeated.
9. Therefore, in our opinion, action of the assessee in depositing the tax per redetermined value of the premises in hand neither amount to 'concealment' nor it has caused any loss to the revenue. The same can also not be termed as a case of 'furnishing inaccurate particulars' of income."
Thus, it was submitted that Ld. CIT(A) has rightly deleted the penalty and his order should be upheld.
5. We have heard the both the parties and their contentions have carefully been considered. In the present case also, apart from making the addition on the basis of section 50C no other material has been brought on record to say that the actual consideration received by the assessee was more than the consideration stated in the title deed. In this view of the situation, the decisions relied upon by Ld. AR would be applicable to the present case. The relevant observations from those have already been reproduced above. Therefore, following the aforementioned decisions. we decline to interfere in the relief granted by Ld. CIT(A) and the Revenue's appeal is dismissed.
6. In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in the open court on 26/02/2015 आदे श क" घोषणा खुले यायालय म& 'दनांकः 26/02/2015 को क" गई ।
Sd/- Sd/-
(चंि पुजार /CHANDRA POOJARI ) (आय.पी. बंसल / I.P. BANSAL)
लेखा सदःय /ACCOUNTANT MEMBER याियक सदःय / JUDICIAL EMBER
मुंबई Mumbai; 'दनांक Dated 26/02/2015
7 ITA NO.6005/MUM/2013 (A.Y. 2005-06)
आदे श क" ूितिल.प अमे.षत/Copy
षत of the Order forwarded to :
1. अपीलाथ1 / The Appellant
2. ू2यथ1 / The Respondent.
3. आयकर आयु3(अपील) / The CIT(A)-
4. आयकर आयु3 / CIT
5. .वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, मुंबई
/ DR, ITAT, Mumbai
6. गाड फाईल / Guard file.
आदे शानुसार/
ार BY ORDER,
स2या.पत ूित //True Copy//
उप/सहायक
उप सहायक पंजीकार (Dy./Asstt. Registrar)
आयकर अपीलीय अिधकरण,
अिधकरण मुंबई / ITAT, Mumbai
व.िन.स./Vm, Sr. PS