SHRI AZIZ AKHTAR,BHOPAL vs. ITO 4(4), BHOPAL, BHOPAL

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ITA 745/IND/2018Status: DisposedITAT Indore11 October 2019AY 2008-097 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO was not justified in levying penalty under Section 271(1)(c) on an addition made based on the estimated valuation of the property by the DVO. The Tribunal relied on the Supreme Court's judgment in CIT vs. Reliance Petro Products Ltd., stating that a claim not accepted by the revenue does not automatically attract penalty.

What were the facts?

The assessee sold an immovable property and declared a sale consideration in their return. The Assessing Officer (AO) initiated reassessment proceedings based on AIR information regarding a higher stamp duty value. During reassessment, the AO accepted the assessee's challenge to the valuation and referred the matter to the Departmental Valuation Officer (DVO).

What were the issues?

Whether penalty under Section 271(1)(c) can be levied on an addition made on the basis of estimated property valuation when the assessee disclosed the transaction and accepted the DVO's valuation during reassessment.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 148,Section 50C(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI KUL BHARAT & SHRI MANISH BORAD

For Appellant: Shri Ashish Goyal and N.D
For Respondent: Shri K.G. Goyal Sr.DR, Shri Ashish Goyal and N.D
Hearing: 09.10.2019Pronounced: 11.10.2019

PER MANISH BORAD, AM.

The above captioned appeal is filed at the instance of assessee

pertaining to Assessment Year 2008-09 and is directed against the orders of Ld. Commissioner of Income Tax (Appeals)-2 (in short

‘Ld.CIT(A)’], Bhopal dated 24.07.2018 which are arising out of the order u/s 271(1)(c) of the Income Tax Act 1961(In short the ‘Act’)

dated 03.06.2016 framed by ITO-4(4), Bhopal.

2.

Assessee has raised following grounds of appeal; 1

Aziz Akhtar On the facts and in the circumstances of the case :- 1.The Ld. CIT(A) was not justified in confirming the order of penalty, which is void-ab-initio, invalid, unjustified, barred by limitation and therefore liable to be quashed. 2.The Ld. CIT(A) did not provide proper and meaningful opportunity of being head to the appellant. 3.The Ld. CIT(A) was not justified in confirming the levy of penalty u/s 271(1)(c) of Rs.65,000/-. The appellant carves leave to add, amend or modify any of the grounds of appeal.

3.

The sole grievance of the assessee is against the levy of penalty

imposed u/s 271(1)(c) of the Act at Rs.65,000/-.

4.

Briefly stated facts as culled out from the records are that the assessee is an individual earning income from salary. Income of Rs.2,06,266/- declared in the return of income filed on 26.5.2008. As per the AIR information Ld. A.O observed that during the financial year 2007-08 an immoveable property was sold on 14.8.2007 and the value as per Stamp Valuation Authority is Rs.30,36,000/-. Based on this information notice u/s 148 of the Act was served upon the assessee for re-opening the assessment.

During the course of reassessment proceedings assessee filed the return of income in compliance to notice u/s 148 of the Act on Aziz Akhtar 06.11.2015 and declared income of Rs.2,89,726/- after including

the alleged transaction of sale of immoveable property. During the course of reassessment proceedings when the assessee was confronted with the alleged sale consideration of Rs.30,36,000/-

from sale of immoveable property the assessee challenged the valuation and also submitted that he is only having 33.33% owner

in the said property. Ld. A.O accepted the request of the assessee

and referred the matter to the Departmental Valuation Officer u/s 50C(2) of the Act, who valued the property at Rs.16,61,500/-. This valuation was accepted by the assessee and Long Term Capital

Gain was recomputed and addition of Rs.1,53,833/- was made

thereby assessing income at Rs.4,43,559/-.

5.

On this addition penalty proceedings u/s 271(1)(c) of the Act

were initiated and thereafter penalty was levied at Rs.65,000/-

after considering the submissions filed by the assessee.

6.

Against the levy of penalty assessee preferred appeal before

Ld. CIT(A) but failed to succeed.

7.

Now the assessee is in appeal before the Tribunal challenging

Aziz Akhtar the order of Ld. CIT(A) confirming the penalty of Rs.65,000/- levied

u/s 271(1)(c) of the Act.

8.

Ld. Counsel for the assessee submitted that the assessee duly

revised the income before the conclusion of reassessment

proceedings and has shown the transaction. It was also submitted

that the sale consideration has been duly reflected in the Income

Tax return and the penalty has been levied merely for the difference

in sale consideration estimated by Ld. Departmental Valuation

Officer. However no concealment of particulars of income or inaccurate particulars of income have been made on the part of the assessee and therefore the penalty is liable to be deleted. Reliance

was placed on the judgment of Hon'ble Supreme Court in the case

of CIT(Ahmedabad) V/s Reliance Petro Products Ltd Civil Appeal

No.2463/2010 dated 17.3.2010. 9. Per contra Ld. Departmental Representative vehemently argued

and supporting the orders of lower authorities.

10.

We have heard rival contentions and perused the records

placed before us. The grievance of the assessee is solely centered

Aziz Akhtar around the levy of penalty imposed u/s 271(1)(c) of the Act at Rs.65,000/-. The said penalty has been levied on the addition

made on account of difference between the sale consideration

shown by the assessee in the return of income filed in compliance

to notice issued u/s 148 of the Act and the value adopted by the Departmental Valuation Officer u/s 50C(2) of the Act.

11.

We observe that the sale consideration shown by the assessee in the Income Tax return was at Rs.12,00,000/-. Value

taken by the Stamp Valuation Authority in the registered sale deed

is Rs.30,36,000/-. The Departmental Valuation Officer valued the same property at Rs.16,61,500/-. The assessee has objected the value of the property of Rs.30,36,000/- but subsequently accepted

the valuation done by Departmental Valuation Officer and offered

the income for tax calculated accordingly.

12.

We find that the addition has been made on the estimated

valuation of the property. Assessee has duly disclosed the transaction in the Income Tax Return. The valuation adopted by Stamp Valuation Authority at Rs.30,36,000/- whereas the Departmental Valuation Officer valued much lower i.e. at 5

Aziz Akhtar Rs.16,61,500/-. This fact itself show that the addition has been made on the estimated income.

13.

At this juncture we would like to refer to the judgment of Hon'ble Supreme Court in the case of CIT(Ahmedabad) V/s Reliance

Petro Products Ltd (supra) wherein Hon'ble Court while dealing with the issue of levy of penalty u/s 271(1)(c) of the Act decided against

the revenue observing that “ a mere making of the claim which is not sustainable in law, by itself, will not amount to furnishing inaccurate

particulars regarding the income of the assessee. Such claim made in the return cannot amount to the inaccurate particulars. Hon'ble

Supreme Court further observed that since the assessee has already

furnished all the details of its expenditure as well as income in its return, which details, in themselves, were not found to be inaccurate

nor can be viewed as concealment of income on its part, it was up to the authorities to accept its claim in the return of not. Merely because

the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to revenue, that by itself would not,

in our opinion, attract the penalty u/s 271(1)(c) ”

Aziz Akhtar

14.

We therefore respectfully following the above judgment as well as in the given facts and circumstances of the case are of the considered view that Ld. A.O was not justified in levying the penalty

u/s 271(1)(c) of the Act on the assessee on the addition made on the basis of estimated valuation of the immoveable property carried

out u/s 50C(2) of the Act. We accordingly delete the penalty of Rs.65,000/- and allow the appeal of the assessee.

15.

In the result appeals of the assessee is allowed.

The order pronounced in the open Court on 11.10.2019. ( KUL BHARAT) ACCOUNTANT MEMBER "दनांक /Dated : 11 October 2019 /Dev Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file.

By Order, Asstt.

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