M/s. Gokulmani Agricom Ltd. (Formerly known as Gokulmani Real Estate De. Pvt. Ltd.) Akhandanand, 38, Vs. DCIT, Range-8(1) Aayakar Bhavan Mumbai 400 020
June, 05th 2015
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IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "G", MUMBAI
. . , ,
Before Shri Joginder Singh, Judicial Member, and
Shri N.K. Billaiya, Accountant Member
Assessment Year: 2005-06
M/s. Gokulmani Agricom Ltd. DCIT, Range-8(1)
(Formerly known as Aayakar Bhavan
Gokulmani Real Estate De. / Mumbai 400 020
Pvt. Ltd.) Akhandanand, 38,
Marol Co-op. Industrial Estate Vs.
Off M.V. Road, Sakinaka
Andheri (E), Mumbai 400 059
/ Appellant / Respondent
/ Revenue by Shri N.V. Nadkarni
/ Assessee by Shri Madhur Agarwal
/ Date of Hearing : 27/05/2015
04 / 06 /2015
/Date of Order:
2 M/s. Gokulmani Agricom Ltd.
/ O R D E R
Per Joginder Singh (Judicial Member)
The assessee is aggrieved by the impugned order dated 30 th
September 2013, of the learned first appellate authority, Mumbai,
confirming penalty of Rs.2,07,403, imposed u/s 271(1)(c) of the
Income Tax Act, 1961 (hereinafter "the Act") on depreciation
claimed at Rs.5,66,789.
2. During the hearing of this appeal, the learned Counsel for the
assessee, Shri Madhur Agarwal, contended that neither there is
concealment of income nor furnishing of inaccurate particulars of
such income by explaining that part of the depreciation was
allowed by the learned CIT(A) and short term capital gain was
deleted. It was pleaded that the quantum was not challenged being
the addition was small and the AO as well as the learned CIT(A)
did dispute the stand of the assessee. Our attention was invited to
the submissions made before the AO as well as the learned CIT(A)
along with other pages of the paper book by contending that the
MoU was produced before the AO as well as before the learned
CIT(A). Our attention was also invited to pages 121 (agreement),
135 (receipt) by explaining that all the details were duly furnished
before the AO as well as before the learned CIT(A) and the
transaction was made by cheque in the year 1997. The crux of the
argument is that the assessee filed the necessary details, thus, it is
not a case of penalty. On the other hand, Mrs. N.V. Nadkarni,
learned D.R. defended the imposition as well as confirmation of
3 M/s. Gokulmani Agricom Ltd.
penalty by contending that necessary details were not filed by the
assessee, therefore, it is a clear case of concealment or furnishing
of inaccurate particulars.
3. We have considered the rival submissions and perused the
material available on record. If the observation made in the
assessment order, leading to addition made to the total income,
conclusion drawn in the impugned order, material available on
record, assertions made by the ld. respective counsels, if kept in
juxtaposition and analyzed, we find that the assessee is engaged in
the business leasing and warehousing, etc. The assessee declared
loss of Rs.18,62,455, on 26th October 2005, and the assessment
was completed u/s 143(3) of the Act, assessing the income at
Rs.2,61,167 (erroneously stated as Rs.2,67,160 in the order). The
aggrieved assessee challenged the assessment order in appeal
before the learned CIT(A) wherein vide order dated 20th August
2010, the addition of depreciation of Rs.5,66,789, and short term
capital gain of Rs.5,89,364, was affirmed. Thereafter, the A.O.
imposed penalty u/s 271(1)(c) of the Act @ 100% on the additions
which was confirmed by the learned CIT(A). The assessee is in
appeal before the Tribunal.
3.1 We find that while dealing with the quantum addition and
even penalty proceedings, part relief was given to the assessee by
the learned first appellate authority. The fact remains that the
assessee filed the necessary details of sales and the transaction
was made by cheque in the year 1997 meaning thereby, the
4 M/s. Gokulmani Agricom Ltd.
necessary details were duly filed before the A.O. as well as before
the learned CIT(A). Insofar as the deeming fiction and alleged
failure of the assessee is concerned, we are of the view that since
the assessee has duly declared the details of sales right from the
assessment stage, therefore, even if part relief is given to the
assessee, the fact remains that the assessee neither concealed its
income nor furnished inaccurate particulars, therefore, the
decision from the Hon'ble Supreme Court in Reliance
Petroproducts Pvt. Ltd., 322 ITR 158 (SC) comes to the rescue of
the assessee. The Vashi Property, held by the assessee, belonged
to Jayant Group of Companies up to 2002 and after the partition
in the group, the assessee company was given the property initially
belonging to Jayant Oil Mills Pvt. Ltd., the other group. The
property up to partition was held as stock-in-trade in the books of
M/s. Jayant Oil Mills Pvt. Ltd., and subsequently, the assessee
treated this property in its books as fixed assets. A unit of the said
property was sold to Mrs. Kavita Patil, as per sale agreement dated
23rd April 2004. The learned A.O. considered Rs.27,28,500, as sale
consideration, as per the sale agreement for calculating capital
gains of this unit out of Vashi property. M/s. Jayant Oil Mills Ltd.,
earlier owner of the Vashi property, offered the amount to tax. On
partition with M/s. Jayant Oil Mills, the Vashi property was
transferred to the assessee company who received the balance
consideration of Rs.5 lakhs and as per the copy of agreement with
Mrs. Kavita Patil, the sale price was paid as per the agreement.
The details of payment / cheque details recorded in the agreement
have been reproduced at Page-4 (Para-3.2 of the impugned order).
5 M/s. Gokulmani Agricom Ltd.
The learned CIT(A) in Para-3.3 (Page-7) has mentioned that "this
cannot be said to be a bona fide claim, even though all particulars
were furnished before the A.O." rather favours the assessee
because it has been admitted that all particulars were furnished
before the A.O. Presumably, even if, the depreciation has been
incorrectly worked out, it cannot be said that the necessary details
were not filed by the assessee. It was the duty of the A.O. to take a
view on the basis of information filed by the assessee. In view of
these facts, we are satisfied that the assessee neither concealed its
income nor furnished inaccurate particulars of income which are
the main ingredients for imposing penalty u/s 271(1)(c) of the Act.
Our view is fortified by the decision of the Hon'ble Supreme Court
in Reliance Petroproducts Pvt. Ltd. (supra). It is also not the case
that concealment, if any, was detected by the Department and
thereafter, the assessee filed the details. The necessary details
were already available with the A.O. and the lapses, if any, were
detected thereafter i.e., during the scrutiny proceedings but the
fact remains that the necessary details were already available on
record. The learned CIT(A) observed that the person who makes a
false claim should not get away with the liability. However, the
Hon'ble Apex Court, as mentioned earlier, has held that mere
making a false claim by itself cannot be said that the assessee
concealed its income and per-se cannot lead to imposition of
penalty. At Page-9 of the impugned order, the learned CIT(A) has
mentioned as under:-
"in the present case, the appellant did file an explanation to
support its claim, but the same was not found acceptable as
6 M/s. Gokulmani Agricom Ltd.
the claim was not allowable and it was not a bona fide claim
as has been brought out above. In these circumstances, the
explanation of the assessee that since all material facts were
disclosed and the claim is bona fide, does not merit
acceptance. The penalty levied by A.O. on this disallowance of
depreciation is accordingly confirmed".
The above observation of the assessee has already been
answered by the Hon'ble Apex Court in the case of Reliance
Petroproducts Pvt. Ltd. (supra), therefore, the assessee is having
merit in its contention.
3.2 Insofar as the enhancement of long term capital gains and
levy of penalty with respect to the addition so made taking the
value of sale consideration adopted by the stamp valuation
authority invoking the provisions of section 50C of the Act is
concerned, we note that the addition has been made on the basis
of deeming provisions of the Act. No evidence have been produced
by the Revenue that the assessee actually received a higher
amount than what was disclosed in the sale deed. The learned
CIT(A) followed Renu Hingorani case passed by the Tribunal and
deleted the addition, we appreciate the reasoning contained
therein. Totality of facts clearly indicate that the assessee neither
concealed the income nor furnished inaccurate particulars of
income, therefore, it is not a fit case for imposing penalty u/s
271(1)(c) of the Act, therefore, we direct the A.O. to delete the
7 M/s. Gokulmani Agricom Ltd.
Finally, the appeal of the assessee is allowed.
This Order was pronounced in the open court in the presence
of ld. representatives from both sides at the conclusion of the
hearing on 27th May 2016.
(N.K. Billaiya) (Joginder Singh)
/ ACCOUNTANT MEMBER / JUDICIAL MEMBER
Mumbai; Dated : 04/06/2015
S.K , P.S/.. . / Pradeep Chowdhury
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent.
3. () / The CIT, Mumbai.
4. / CIT(A)- , Mumbai
5. , , / DR, ITAT,
6. / Guard file.
/ BY ORDER,
/ (Dy./Asstt. Registrar)
, / ITAT, Mumbai