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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI G.S.PANNU, AM & SHRI AMARJIT SINGH, JM
Assessee by: Shri N.M.Porwal Department by: Shri M. Rajan सुनवाईकीतारीख / Date of Hearing:27.09.2016 घोषणाकीतारीख /Date of Pronouncement:25.01.2017 आदेश / O R D E R
PER AMARJIT SINGH, JM:
The assessee has filed the present appeal against the order dated 07.02.2011 passed by the Commissioner of Income Tax (Appeals)23, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the assessment year 1994-95 wherein the CIT(A) has partly allowed the order dated 26.02.2010 passed by the Assessing Officer and directed A.Y. 1994-95 him to not to impose the penalty on the difference of the valuation of Rs.10,91,710/-.
The assessee has raised the following grounds:-
“1. On the facts and in the circumstances of the case, Ld. CIT(A) erred in not appreciating that Ld. ITO has initiated penalty proceedings u/s.271(1)(c) in respect of business income at Rs.1,10,72,543/- whereas he has levied penalty on capital gains sought to be evaded which is not permissible.
2. Without prejudice to ground no.1, the Ld. CIT(A) erred in not appreciating that appellant has disclosed full facts of the case at all stages and there is no finding either by the Ld. CIT(A) or by the Hon’ble Tribunal to the effect that the appellant has concealed facts from the department.
3. Without prejudice to ground no.1, the Ld. CIT(A) erred in directing the ITO to reduced a sum of Rs.10,91,700/- (before indexation) only from the capital gains sought to be evaded as against a correct sum of Rs.26.63 lacs (after indexation) towards difference in valuation between the appellant’s authorized registered value and the DVO.
Without prejudice to ground no.1, the Ld. CIT(A) erred in not reducing business loss of Rs.25,38,659/- from the figure of income sought to be evaded.
Without prejudice to ground no.1, the Ld. CIT(A) erred in not appreciating that the appellant had claimed a sum of Rs.15 lacs as expenditure for clearing the Urban Land Ceiling Application in the year 1992 when the same was allowable till the subsequent amendment in section 37 of the I.T. Act. Therefore the said amount of Rs.15 lacs cannot become the subject matter of penalty u/s.271(1)(c). A.Y. 1994-95
The brief facts of the case are that the assessment of the assessee was completed on 27.03.1997 u/s.143(3) r.w.s.144A of the Income Tax Act, 1961( in short “the Act”) determining total income to the tune of Rs.72,21,590/- as against the returned income of Rs.21,84,530/-. The major addition was on account of Long Term Capital Gain determined to the tune of Rs.70,87,395/- as against the Long Term Capital Gain shown by the assessee to the tune of Rs.20,50,335/-. Thereafter, the assessment was cancelled by the order of the CIT-12 vide order u/s.263 of the Act dated 05.02.1998 wherein it was held that the transaction on which Long Term Capital Gain was shown is actually in the nature of business income. Consequently a revised order u/s.143(3) r.w.s 263 of the Act was made on 22.02.2000 determining the total income to the tune of Rs.1,04,49,700/- which was due to the transaction shown by the assessee as Long Term Capital Gain being considered by the assessee as business income. The said order has also upheld by the CIT(A) vide order dated 05.03.2004. However, on certain issues including the assessee being considered as AOP and seized cash being considered as advance tax payment, the CIT(A) held in favour of the assessee. The department filed an appeal against the said order but the Hon’ble ITAT dismissed the said appeal by virtue of order dated 05.01.2007 on the issue of the status of the assessee and treatment of seized cash. A.Y. 1994-95
4. The appeal of the assessee was decided by the Hon’ble ITAT vide order dated 30.05.2006 wherein it was held that the income from sale of land should be taxed as capital gain till the date of conversion and the income there from for the subsequent period should be considered as business income. Consequently, an order u/s.143(3) r.w.s.254 of the Act was passed on 18.12.2007 determining the total income to the tune of Rs.1.2 crores which included business income of Rs.1.11 crores on sale of land. The assessee filed further appeal against the said order before the CIT(A) which was decided on 10.10.2008. The CIT(A) granted the relief to the assessee regarding the fair market value of the property on the date of conversion to stock in trade and the value as on 01.04.81. Consequent to giving effect to the order of CIT(A), the total income was determined at Rs.9.46 lacs wherein the business income was determined at loss of Rs.25.39 lacs and the Long Term Capital Gain was determined of Rs.83.51 lacs. Thereafter, the penalty proceedings was initiated u/s.271(1)(c) of the Act in view of the original order u/s.143(3) of the Act dated 27.03.1997 due to concealment and filing of inaccurate particulars regarding its income as enumerated in the said order. Thereafter, in the subsequent orders the penalty proceeding was also initiated and after considering the reply, the Assessing Officer levied the penalty to the tune of Rs.14,11,220/- Thereafter, the assessee filed an appeal before the CIT(A) who allowed the appeal partly by saying that the A.Y. 1994-95