Gopal Rameshkumar Vazir, Mumbai vs Assessee

सर्वश्री आय.सी.शभमव, रेखम सदस्म एवुं श्री वर्जम ऩमर यमर्, न्ममयमक सदस्म BEFORE : SHRI R.C.SHARMA, AM & SHRI VIJAY PAL RAO, JM आमकय अऩीर सं./ITA No.1221/Mum/2013 ( नििाारण वषा / Assessment Year :2009-10) Shri Gopal Rameshkumar Vs. ITO, 19(2)(3), Mumbai Vazir, 1st Floor, Ashiana Building, Linking Road, Nr.

Grindlays, Santacruz (W), Mumbai-400054 स्थममी रेखम सं ./ जीआइआय सं ./ PAN/GIR No. : AABPV 1172 D (अऩीरमथी /Appellant) .. (प्रत्मथी / Respondent)

यनधमवरयती की ओर से /Assessee by : Shri Rakesh Joshi यमजस्र् की ओर से /Revenue by : Shri Love Kumar

सन ु र्मई की तमयीख / Date of Hearing : 27/04/2015 घोषणम की तमयीख/Date of Pronouncement : 08/05/2015 आदे श / O R D E R

PER R.C.SHARMA (A.M.) :

This is an appeal filed by the assessee against the order of CIT(A)-

33, Mumbai, dated 12-11-2012, for the assessment year 2009-10, in the

matter of imposition of penalty u/s.271(1)(c) of the I.T.Act amounting to

Rs.3,50,000/-.

2. Rival contentions have been heard and record perused. Facts in

brief are that the assessee e-filed return of income on 2/3/2010 declaring

total income of Rs.1) 43)294. The case was subsequently selected for

scrutiny and regular assessment u/s. 143(3) was completed on

24.10.2011) wherein the part of exemption claimed u/s.54 was denied in

respect of the cost of construction amounting to Rs.15,17,730/-. Penalty 2 ITA No.1221/2013

proceedings u/s. 271(1)(c) were initiated vide issue of notice u/ s. 274 r.

w.s. 271 (l)(c) dated 24.10.2011. During the year assessee had sold Flat

No.702 in Meridian. Apartments for a consideration of Rs.28,56,360/- and

had worked out the long term capital gain as under:

Sale consideration 28,56,360 Less: Exemption u/s.54 Investment in Dapoli Property Tamastirti, Dapoli House No.16 Dt.15/01/2009 13,60,000 Construction cost 15,18,300 28,78,300 28,56,360 Nil

During the course of the assessment proceedings the assessee was

asked to produce relevant bills in respect of the cost incurred towards

construction. In response the assessee filed a letter stating therein that

the work of improvement to the residential house was managed and

supervised by assessee's late father Shri Ramesh N. Vazir, who expired

on 14/10/2010 and as his father is no more, he was unable to locate

relevant bills to substantiate the claim for cost of

construction/improvement. A revised computation of capital gain was also

filed a sunder :-

Sale consideration 28,56,360

Less: Exemption u/s.54 Investment in Dapoli Property Tamastirti, Dapoli House No.16 Dt.15/01/2009 13,38,630 15,17,730

However, the AO did not convince with the assessee's explanation and

imposed penalty of Rs.3,50,000/- u/s.271(1)(c). 3 ITA No.1221/2013

4. By the impugned order the CIT(A) confirmed the action of the AO. It

was argued by the ld. AR that some new work was carried out in the

house, details of which could not be furnished due to the fact that

construction was taken care of by his father, who was no more. There

was no concealment of income and the amount of revised capital gains

was surrendered during the course of assessment itself. Therefore, no

penalty was imposable u/s.271(1)(c). For this purpose, reliance was

placed on the decision of Hon'ble Supreme Court reported in 251 ITR 1,

on the decision of Hon'ble Bombay High Court reported in 271 ITR 278 &

on the decision of Hon'ble Allahabad High Court reported in 246 ITR 216.

5. On the other hand, ld. DR relied on the orders of the authorities

below.

6. We have considered rival contentions, carefully gone through the

orders of the authorities below and found from the record that assessee

acquired a residential house during the year under consideration. Sale

proceeds was utilized for acquiring a new house. Thereafter he undertook

some improvement in the said residential house. The work of

improvement of this residential house was managed and supervised by

assessee's father, who expired on 14-10-2010 due to cardiac arrest.

Since assessee's father was no more, assessee could not locate relevant

improvement cost bills to substantiate the claim for cost of improvements.

During the course of assessment itself, assessee at its own voluntarily

submitted revised computation of income before the AO wherein claim of

exemption u/s.54 was revised and due taxes were also paid by the

assessee at its own before completion of assessment. This voluntary 4 ITA No.1221/2013

declaration was made in the month of August, 2011 and due taxes was

also paid on 25-8-2011 before passing of the order by the AO u/s.143(3)

on 24-10-2011. It is not the case of concealment of particulars of income

but merely because of reduction in the claim made u/s.54 by the

assessee himself at its own during the course of assessment itself. The

fact that assessee has incurred improvement expenditure of

Rs.13,39,670/- is evident as per the balance sheet filed along with the

return, but the same could not be supported by documents because of

death of father of the assessee. Considering the proposition of law laid

down by the Hon'ble Supreme Court in the case of 251 ITR 1 and keeping

in view totality of facts and circumstances of the case, we do not find any

merit for imposition of penalty u/s.271(1)(c) of the Act.

7. In the result, appeal of the assessee is allowed.

Order pronounced in the open court on this 08/05/2015.

Sd/- Sd/- (वर्जम ऩमर यमर्) (आय.सी.शभमव) (VIJAY PAL RAO) (R.C.SHARMA) न्यानयक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER भुंफई Mumbai; ददनमंक Dated 08/05/2015 प्र.कु.मभ/pkm, यन.स/ PS

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

1. अऩीरमथी / The Appellant

2. प्रत्मथी / The Respondent.

3. आमकय आमुक्त(अऩीर) / The CIT(A), Mumbai.

आदे शािसार/ BY ORDER,

4. आमकय आमक् ु त / CIT

5. वर्बमगीम प्रयतयनधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai

6. गमर्व पमईर / Guard file.

उप/सहायक पुंजीकार

सत्ममवऩत प्रयत //True Copy// (Asstt. Registrar) आयकर अपीऱीय अधिकरण, भंफ ु ई/ ITAT, Mumbai