ASST CIT 16(2), MUMBAI vs. JAMSHED E BAPASOLA, MUMBAI

The issue raised in this appeal relates to the penalty levied u/s 271(1)(c) of the Act in respect of the addition relating to invoking the provisions of section 50C of the Act and also relating to the disturbance of the assessee‟s claim relating to the cost of acquisition. At the very outset, Ld Counsel for the assessee submitted that the addition made u/s 50C of the Act was confirmed by the Tribunal. Further, it is also submitted that the penalty levied u/s 271(1)(c) in respect of such additions are not sustainable in law in view of the binding jurisdictional High Court judgment in the case of CIT vs. Fortune Hotels and Estates (P) Ltd [2014] 232 Taxman 481 (Bombay), dated 26.9.2014 copy of which is placed on record.

After hearing both the parties on this issue and on perusal of the cited binding jurisdictional High Court judgment in the case of Fortune Hotels and Estates (P) Ltd (supra), we find the same is relevant for the following proposition:- “In terms of section 50C, higher sales consideration of property determined by DVO did not by itself amount to furnishing inaccurate particulars of income so as to levy penalty under section 271(1)(c) of the Act.”

Considering the above binding ratio laid down by the Hon‟ble jurisdictional High Court, we are of the opinion that the relevant relatable penalty should be deleted as held by the CIT (A). Accordingly, the order of the CIT (A) in this regard does not call for any intereference.

Further, Ld Counsel for the assessee submitted that the other segment of penalty levied by the AO relates to the disturbing of the assessee‟s claim relating to the cost of acquisition. In this regard, bringing our attention to the order of the Tribunal on merits relating to the said cost of acquisition, ld Counsel for the assessee read out the relevant para 5.2 and submitted that the cost of acquisition is required to be adopted only as on 1.4.1986 and the indexed cost of acquisition of Rs. 33 lakhs worked out to Rs. 1,13,14,285/-. On appeal, CIT (A) deleted the relatable penalty calling it „a debatable issue‟ and the same is evident from the contents of para 2.4.2 of the impugned order. In this regard, the only argument raised by the Revenue relates to non-consideration of the payment of Rs. 3 lakhs by the CIT (A) in his order while discussing the penalty on the said part of the cost of consideration.

After hearing both the parties and after going through the order of the CIT (A) as well as the said Tribunal‟s order dated 10.7.2013 (supra), we find the CIT (A) is categorical in stating that the indexed cost of acquisition to the cost of Rs. 1,13,14,285/- does not attract any penalty u/s 271(1)(c) of the Act, with which we agree. On the issue of Rs. 3 lakhs, the CIT (A) is directed to apply his mind once again in the remanding proceedings and pass a speaking order in this regard. Therefore, in summary, we find the order of the CIT (A) does not call for any interference so far as the penalty relatable to addition u/s 50C of the Act as well as the cost of consideration as on 1.4.1986 amounting to Rs. 1,13,14,285/- is concerned. For that limited purpose of examining the levyability of penalty on the sum of Rs. 3 lakhs, the matter needs to be remanded to the file of the CIT (A) for want of speaking order. CIT (A) will grant a reasonable opportunity of being heard to the assessee and pass a speaking order within a reasonable time. Accordingly we order.

In the result, appeal of the Revenue is disposed of with the above directions. Order pronounced in the open court on 16th October, 2015. (SANDEEP GOSAIN) ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक 16.10.2015 व.नन.स./ OKK , Sr. PS आदेश की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to : 1. अऩीराथी / The Appellant प्रत्मथी / The Respondent. 2. आमकय आमुक्त(अऩीर) / The CIT(A)- 3. आमकय आमुक्त / CIT 4. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR,

ITAT, Mumbai गार्ड पाईर / Guard file. 6. सत्मावऩत प्रनत //// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt.