GIRDHARI LAL,GURGAON vs. ITO WARD - 1(5), GURGAON

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ITA 3458/DEL/2019Status: DisposedITAT Delhi17 June 2022AY 2015-165 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee's claim for deductions under sections 54F and 54B was incorrect and not in consonance with the documents. The revised computation and payment of tax were made after the AO confronted the assessee with the correct position, indicating it was not a voluntary disclosure.

What were the facts?

The assessee sold agricultural land and claimed deductions under sections 54F and 54B of the Income-tax Act. The Assessing Officer (AO) recomputed the capital gains, and the assessee subsequently revised the computation and paid the tax. The AO levied a penalty under section 271(1)(c) for concealment of income.

What were the issues?

Whether the penalty under section 271(1)(c) is leviable for incorrect claim of deduction and whether the revised computation was a voluntary disclosure or made under compulsion.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 54F,Section 54B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘H’ : NEW DELHI

For Respondent: Shri Tufail Tahir, Senior DR
Hearing: 02.06.2022

ASSESSEE BY : None REVENUE BY : Shri Tufail Tahir, Senior DR Date of Hearing : 02.06.2022 Date of Order : 17.06.2022

ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : The appeal by the assessee is directed against the order of the ld.

CIT (Appeals)-1, Gurgaon pertaining to the assessment year 2015-16 wherein penalty levied under section 271(1)(c) of the Income-tax Act, 1961 (for short ‘the Act’) for an amount of Rs.59,19,590/- has been confirmed.

2.

Brief facts of this case leading to levy of penalty are as under. During the assessment year, assessee along with his brother Shri Ramesh Chand sold agricultural land for a consideration of Rs.38,44,75,000/-. assessee claimed deduction u/s 54F and 54B of the Act. Assessee made some revision of calculation of Long Term Capital Gain (LTCG). By perusing the revised calculation, AO observed that assessee purchased a residential house for a sum of Rs.3,07,55,000/-. Besides the assessee also purchased agricultural land of Rs.4,02,06,000/-. Further, assessee had deposited Rs.9,40,00,000/- in capital gains deposit account bonds. Hence AO reworked the assessee’s capital gain and came to the conclusion that the capital gain of Rs.2,61,23,549/- was taxable. Assessee in this regard made following response :-

“In continuous of the case. Please find enclosed herewith the following reply information and documents for your kind perusal.

1.

The assessee had deposited the amt in Capital Cain Account Scheme INR.2.90 Cr. & 6.50 cr. (6.30 cr +2.0 cr) = 9.4 cr and the assessee total investment before 31-08-2015 with capital gain a/c scheme was Rs.16,49,61,000.00 and the long term capital gain chargeable to tax is Rs.2,61,23,549.00 for which your honour had given the show case is the correct figures and the assessee had agreed with this.

2. It is mentioned here that the assessee had deposited the income tax on the Long Term Capital Gain of Rs.2,41,05,864.00 suo moto and he had submitted the revised computation of total income with the challan deposited of income tax of Rs.71,90,140.00 in Punjab National Bank through BSR code 0301497 challan no.00001 dated 28.09.2017.

3.

The assessee had deposited this tax of Rs.71,90,140.00 suo moto to buy peace and to avoid the litigation and with the condition that no penalty will be imposed.”

3. AO made addition of Rs.2,61,23,549/-. On this addition, penalty notice was issued. The AO found that above conduct of the assessee was assessee was completely cornered by the AO he had no option to offer the said LTCG for taxation. Concluding portion of the penalty order reads as under :-

“On consideration of overall factual matrix of this case, I am of considered view that the conduct of the assessee is not at all bonafide and explanations offered by him is not correct that the said revised computation of income was filed voluntarily. It was in fact when assessee was completely cornered by the AO and no option was left with the assessee but to offer the said LTCG for taxation, the assessee came forward by disclosing the said income in the revised Computation of income filed on 09.10.2017 in that too. L TCG was decal red at Rs.2,41,05,8641- whereas when pointed out and show cause was given that correct LTCG as per documents available on record comes to Rs. 2.61.23.549/-, assessee offered the same for taxation. Thus, the conduct and explanation of the assessee w.r.t. offering this income in the revised computation of income on 09.10.2017 was neither bonafide nor voluntary but was rather under compulsion as the assessee was cornered by the AO.”

4.

Before the ld. CIT (A), assessee stated that assessee has earlier filed a wrong computation/defective computation on the advice of counsel at that time. Thereafter, assessee had corrected the defect to a great extent and the balance surrender so made was voluntary and no concealment of income was there. However, ld. CIT (A) rejected the same by observing that even after being pointed out Shri Rajpal Yadav, assessee’s counsel insisted on the claim of depreciation u/s 54B and 54F.

Ld. CIT (A) also agreed that the surrender of balance amount was not voluntary. Ld. CIT (A) proceeded to refer several case laws and confirmed the penalty.

5.

Against this order, assessee is in appeal before us. been levied u/s 271(1)(c) of the Act being the incorrect claim of deduction by the assessee on LTCG. Assessee’s plea before the ld. CIT(A) that the same was on account of wrong advice by the counsel has been rejected by the ld. CIT (A). Ld. CIT (A) made such observation that even after AO’s pointing out that correct amount of claim as per documents be submitted for section 54B and 54F, the said counsel proceeded with the inflated claim. 7. In this view of the matter, in our considered opinion, the wrong claim of section 54B and 54F exemption not being in consonance with the documents invites the rigors of penalty. Further, the assessee’s plea of having income voluntary offered, the same has rightly been rejected by the authorities below as it is clearly after the AO’s confrontation with the assessee with the correct position, that the assessee offered the same. Hence, we uphold the order of Revenue authorities. 9. In the result, this appeal of the assessee is dismissed. Order pronounced in the open court on this 17th day of June, 2022.

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