Gokuldham Agricom Ltd, Mumbai vs Assessee

M/s. Gokulmani Agricom Ltd. DCIT, Range-8(1) (Formerly known as Aayakar Bhavan Gokulmani Real Estate De. बनाम/ Mumbai 400 020 Pvt. Ltd.) Akhandanand, 38, Marol Co-op. Industrial Estate Vs. Off M.V. Road, Sakinaka Andheri (E), Mumbai 400 059 P.A. No.AABCG5860C अऩीराथी / Appellant प्रत्मथी / Respondent

याजस्व की ओर से / Revenue by Shri N.V. Nadkarni

यनधाारयती की ओर से / Assessee by Shri Madhur Agarwal

न ु वाई की तायीख / Date of Hearing : 27/05/2015

04 / 06 /2015 आदे श की तायीख /Date of Order:

2 M/s. Gokulmani Agricom Ltd.

आदे श / 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 penalty.

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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.

Sd/- Sd/- (N.K. Billaiya) (Joginder Singh)

ऱेखा सदस्य / ACCOUNTANT MEMBER न्याययक सदस्य / JUDICIAL MEMBER

भुिंफई Mumbai; ददनािंक Dated : 04/06/2015

S.K , P.S/.यन. . / Pradeep Chowdhury

आदे श की प्रयिलऱपप अग्रेपषि/Copy of the Order forwarded to :

1. अऩीराथी / The Appellant

2. प्रत्मथी / The Respondent.

3. आमकय आमक् ु त(अऩीर) / The CIT, Mumbai.

4. आमकय आमक् ु त / CIT(A)- , Mumbai

5. ववबागीम प्रयतयनगध, आमकय अऩीरीम अगधकयण, भफ ुिं ई / DR, ITAT, Mumbai

6. गार्ा पाईर / Guard file.

आदे शानसार/ BY ORDER, त्मावऩत प्रयत //True Copy// उप/सहायक पुंजीकार (Dy./Asstt. Registrar) आयकर अपीऱीय अधिकरण, भफ ुिं ई / ITAT, Mumbai