TMI Blog2018 (7) TMI 1472X X X X Extracts X X X X X X X X Extracts X X X X ..... notice dated 30.06.2013 produced by the Ld. AR during the hearing, it can be seen that the Assessing Officer was not sure under which limb of provisions of Section 271 of the Income Tax Act, 1961, the assessee is liable for penalty. See CIT Vs. SSA’s Emerald Meadows [2016 (8) TMI 1145 - SUPREME COURT]- Decided in favour of assessee. - ITA No. 4913/Del/2015 - - - Dated:- 18-7-2018 - SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER Appellant / Assessee by : Sh. M.P. Rastogi, Adv. Respondent / Revenue by : Sh. S.S. Rana, CIT DR ORDER Per Suchitra Kamble, JM This appeal is filed by the assessee against the order dated 18.05.2015 passed by the Pr. CIT(A)-8, New Delhi for AY 2006-07. 2. Grounds of appeal are as under: 1. That the CIT (Appeals) has erred on facts and under law in confirming the penalty order of AO in treating the sale of boundary walls (referred as Building ) as a short term capital asset and consequently held the said building as depreciable asset u/s 50 of the Income Tax Act, 1961. As the result of such confirmation by the CIT (Appeals) a penalty of ₹ 10,74,878/- was held to be payable by the assessee u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer treated the capital gain on building as short term capital gain u/s 50 of the IT Act. However, the CIT (A) directed the Assessing Officer to refer the property for valuation by the DVO and accordingly on the basis of valuation, he hold that AO could have made an addition of ₹ 17,46,000/- which is the difference between the amount as per DVO s report and as shown by the assessee. He has also directed to allow the set off of long term capital losses against the current long term capital gains. On appeal before the ITAT by the Department, it was observed by the ITAT that building is a depreciable asset and it was admitted by the AR of the assessee that depreciation has been claimed on the value of building. Since the CIT (A) has not considered the full facts and he has combined the issue of capital gain calculated on land and building together, the ITAT set aside the issue to the file of the Assessing Officer to treat the transaction of land as long term capital gain and building as short term capital gain u/s 50 and allow the set off of losses of earlier years on account of capital gains against the land. After considering these issues at the time of penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es as issued by the Assessing Officer from time to time, it is not clear under which limb of the provision he has granted the opportunity to the assessee. 6. The Ld. AR further submitted that if we look at the Assessment Order dated 27.11.2008, it is clear that the penalty proceedings was initiated by the Assessing Officer on account of his treatment of market value of the property at ₹ 51,30,000/- as determined by the registered valuer against the disclosed sale consideration of ₹ 55,00,000/- by the assessee. In the Assessment Order, the Assessing Officer separately assessed the value of the boundary wall mentioned in the sale deed at ₹ 4,00,00,000/- as income from other sources but on appeal the CIT(A) held that the sum of ₹ 4,00,00,000/- is part of the sale consideration. So much so, the CIT(A) also held that because the DVO also worked out the value of the property at ₹ 56,74,000/-, the sale consideration as shown by the assessee is correct and long term capital gain has to be computed accordingly. The ITAT, on appeal filed by the Revenue against the order of CIT(A) held that because the assessee claimed depreciation on the building (wall), henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bazar Patrika 116 ITR 416 5. CIT vs. Shadi Ram Bal Mukund 84 ITR 183 As far as the merit of the case is concerned, the Ld. AR submitted that the penalty proceeding are independent proceedings from Assessment and no penalty can be levied merely on the basis of finding given in the Assessment Order unless cogent material is brought on record to prove its falsity. In the penalty proceedings, the assessee may furnish fresh evidence which should be considered to prove the bonafide of the assessee. The Ld. AR relied upon the following decisions: 1. CIT vs. Khoday Eswarsa Sons 83 ITR 369 (SC) 2. Devsons Pvt. Ltd. vs. CIT 329 ITR 483 (Del) 3. Prasanna Enterprises vs. CIT 244 ITR 188 (Ker) 8. The Ld. AR further submitted that the very observation of the Tribunal that the assessee claimed depreciation on the building as alleged to have been admitted by the counsel in the proceeding and then invoking the provision of Section 50 of the Act, is not correct. The fact of the assessee s case is that the so called building is in the shape of wall constructed around the farm land. While preparing the profit loss account in accordance with the provisions of the Company Law, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a different plank, which was not basically the issue before the ITAT as is clear even from the grounds of appeal filed by the Revenue before ITAT. Therefore, the Ld. AR further submitted that merely on account of the treatment of the capital gain as short term capital gain on the portion of the value of the building of the sale consideration instead of long term capital gain as claimed by the assessee does not amount to furnishing of inaccurate particulars because the particulars as furnished by the assessee remained the same. It is only the difference in inference as made by each authorities in a different manner. The Ld. AR relied upon the Hon ble Apex Court decision in case of CIT vs. Reliance Petroproducts Pvt. Ltd. 323 ITR 158 (SC). 10. The Ld. DR relied upon the Penalty Order and the order of the CIT(A). The Ld. DR also relied upon the following decisions: i. UOI vs. Dharmendra Textile Processors 295 ITR 244 (SC) ii. R L Traders vs. ITO 2017-TIOL-2583-HC-DEL-IT iii CIT vs. Zoom Communication P. Ltd. 327 ITR 510 (Del) iv. CIT vs. Moser Baer India Ltd. 315 ITR 460 (SC) v. CIT vs. Gold Coin Health Food P. Ltd. 304 ITR 308 (SC) vi. MAK Data P. Ltd. CIT 358 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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