Shri Abhinav Ajmera, New Delhi v. ACIT, New Delhi

ITA 1363/DEL/2010 | 2006-2007
Pronouncement Date: 31-05-2010 | Result: Allowed

Appeal Details

RSA Number 136320114 RSA 2010
Assessee PAN AAEPJ0086D
Bench Delhi
Appeal Number ITA 1363/DEL/2010
Duration Of Justice 2 month(s) 1 day(s)
Appellant Shri Abhinav Ajmera, New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 31-05-2010
Date Of Final Hearing 31-05-2010
Next Hearing Date 31-05-2010
Assessment Year 2006-2007
Appeal Filed On 29-03-2010
Judgment Text
ITA NO. 1363/DEL/2010 A.Y. 2006-07 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 1363/DEL/2010 A.Y. : 2006-07 SHRI ABHINAV AJMERA VS. ASSTT. COMMISSIONE R OF INCOME TAX LEGAL HEIR OF LATE SH. D.C. JAIN CIRCLE-37(1) N EW DELHI PROP.: D.C. JAIN AND ASSOCIATES 58 BAHUBALI ENCLAVE VIKAS MARG EXTN. DELHI 110 092 (PAN: AAEPJ0086D) [APPELLANT] (RESPONDENT) ASSESSEE BY : SHRI ABHINAV AJMERA (SELF) DEPARTMENT BY : SHRI AMRISH BEDI SR. DR PER SHAMIM YAHYA: AM THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 21.12.20 09 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INC OME TAX (APPEALS) ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS. 2 17 964/- U /S 271(1)(C) OF THE IT ACT. 3. IN THIS CASE THE MAIN ISSUE INVOLVED WAS THE TR EATMENT OF RECEIPT OF RS. 10 03 814/-. THE ASSESSEE HAD SHOWN THE INCOME FROM SALE OF PLANTS AND TREES AS AGRICULTURAL INCOME AND HENCE CLAIMED IT A S EXEMPT. HOWEVER THE ASSESSING OFFICER DID NOT AGREE WITH THE ASSESSEE. RELYING ON THE DECISION ITA NO. 1363/DEL/2010 A.Y. 2006-07 2 REPORTED IN 172 ITR 197 THE ASSESSING OFFICER TREA TED THE RECEIPT AS CAPITAL THUS TAXABLE AS PER THE PROVISION OF THE ACT UNDER THE H EAD CAPITAL GAINS. 4. FURTHER PENALTY PROCEEDINGS U/S 271(1)(C) WAS A LSO INITIATED. IN THE PENALTY ORDER THE ASSESSING OFFICER OBSERVED AS U NDER:- THERE IS NO DOUBT REGARDING THE TAXABILITY OF RECE IPT ON ACCOUNT OF SALE OF TREES. IT IS A SETTLED LAW THAT THE TREES STANDING ON AGRICULTURAL LAND CONSTITUTE PROPERTY OF ANY KIND U/S 2(14) OF THE ACT AND ARE THEREFORE CAPITAL ASSETS IN THE HANDS OF THE ASSESSEE (93 ITR 314). THE APEX COURT HAS HELD THAT THE RECEIPT ON TRANSFER OF TREES IS NOT A REVENUE RECEIPT BUT CAPITAL RECEIPT (60 ITR 435). FURTHER ON PERUSAL O F THE SALE DEED IT IS OBSERVED THAT THE SALE PROCEEDS WAS ARBITRARILY BIF URCATED INTO THE VALUE OF THE LAND AND THE VALUE OF THE TREES. AS HAS ALSO B EEN OBSERVED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) THERE WAS NO LOGICAL BASIS FOR SUCH BIFURCATION. IT WAS JUST DONE TO AVOID TAX ON THIS A MOUNT. FURTHER THE ASSESSEE WAS SHOWING AN AGRICULTURAL INCOME RANGING FROM APPROX. RS. 3 000 TO RS. 8 000 P.A. IN EARLIER YEARS. THIS MEAG ER INCOME IN NO WAY JUSTIFY THE VALUE OF RS. 10 00 000 ATTRIBUTED TO TRE ES PLANTS ETC. 5. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOM E TAX (APPEALS) REFERRED TO THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF C.I.T. VS. ESCORT FINANCE LTD. 193 TAXMAN 453 AND HONBLE APEX COURT DECISION IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS 306 ITR 277. HE REITERATED THE OBSERVATION OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN THE QUANTUM APPEAL AND HELD THAT NO LOGICAL BASIS FOR THE BIFURCATION AND VALUA TION HAS BEEN GIVEN BY THE ASSESSEE. HENCE HE CONFIRMED THE LEVY OF PENALTY. ITA NO. 1363/DEL/2010 A.Y. 2006-07 3 6. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEF ORE US. 7. WE HAVE HEARD THE ASSESSEE AND THE LD. DEPARTMEN TAL REPRESENTATIVE. WE FIND THAT PENALTY IN THIS CASE HAS BEEN LEVIED FOR DIFFERENCE IN TREATMENT OF RECEIPT FROM SALE OF TREES AND AGRICULTURAL LAND. ASSESS EE HAS SUBMITTED TO THE ASSESSING OFFICER THAT ASSESSEE HAS RECEIVED RS. 1 0 LACS FOR THE TOTAL REIMBURSEMENT OF ALL THE TRESS AND ANOTHER EXISTING CROP OF HORTICULTURE AND THE SAME WERE INCLUDED IN THE TOTAL SALE VALUE. THE CO PY OF KHASRA GIDAURI SHOWING THE CROP WAS ALSO ATTACHED. ASSESSING OFFICER D ID NOT ACCEPT THE SAME BY HOLDING THAT IT WAS A COMPOSITE SALE ALONG WITH THE LAND. ON THIS BASIS THE PENALTY WAS IMPOSED U/S 271(1)(C). WE FIND THAT SECTION 27 1(1(C) OF THE ACT POSTULATES IMPOSITION OF PENALTY FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. IN THIS REGARD WE FIND THAT ASSESSEE HAS S OLD LAND ON WHICH VARIOUS CROPS AND HORTICULTURE ETC. WERE EXISTING. IN EARLIER YEARS THE ASSESSEE HAD BEEN CLAIMING INCOME FROM SUCH AGRICULTURAL ACTIVITY. NOW THE ASSESSEE HAS FURNISHED ALL THE NECESSARY PARTICULARS AND MADE A CLAIM. THE RE WAS NO CONCEALMENT OF PARTICULARS. IT WAS ONLY ASSESSING OFFICER S OPINI ON THAT BEING COMPOSITE SALE ASSESSEES CLAIM CANNOT BE ACCEPTED. THE CLAIM OF THE ASSESSEE CANNOT BE CONSTRUED AS EX-FACIE BOGUS. THIS IN OUR CONSIDERE D OPINION CANNOT BE A REASON TO LEVY PENALTY U/S 271(1)(C) OF THE IT ACT. 8. IN THIS REGARD WE PLACE RELIANCE UPON THE HON BLE APEX COURT DECISION IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD. I N CIVIL APPEAL NO. 2463 OF 2010. IN THIS CASE VIDE ORDER DATED 17.3.2010 IT HAS BEE N HELD THAT THE LAW LAID DOWN IN THE DILIP SHEROFF CASE 291 ITR 519 (SC) AS TO THE M EANING OF WORD CONCEALMENT AND INACCURATE CONTINUES TO BE A GOOD LAW BECAUS E WHAT WAS OVERRULED IN THE ITA NO. 1363/DEL/2010 A.Y. 2006-07 4 DHARMENDER TEXTILE CASE WAS ONLY THAT PART IN DILI P SHEROFF CASE WHERE IT WAS HELD THAT MENSREA WAS A ESSENTIAL REQUIREMENT OF PE NALTY U/S 271(1)(C). THE HONBLE APEX COURT ALSO OBSERVED THAT IF THE CONTEN TION OF THE REVENUE IS ACCEPTED THEN IN CASE OF EVERY RETURN WHERE THE CL AIM IS NOT ACCEPTED BY THE AO FOR ANY REASON THE ASSESSEE WILL INVITE THE PENAL TY U/S 271(1)(C). THIS IS CLEARLY NOT THE INTENDMENT OF LEGISLATURE. 9. IN THE BACKGROUND OF THE AFORESAID DISCUSSION A ND PRECEDENT WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE TH E LEVY OF PENALTY. 10. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/5/2010 UPO N CONCLUSION OF HEARING. SD/- SD/- [I.P. BANSAL] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 31/5/2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES