Principal Commissioner of Wealth-tax-I v. Narayana Heights & Towers - 2017-LL-0817-6

Citation	2017-LL-0817-6
Appellant Name	Principal Commissioner of Wealth-tax-I
Respondent Name	Narayana Heights & Towers
Court	HIGH COURT OF RAJASTHAN
Relevant Act	Income-tax
Date of Order	17/08/2017
Judgment	View Judgment
Keyword Tags	profit and loss account • compulsory acquisition • sale consideration • penalty proceeding • fair market value • agriculture land • concealed income • compensation • capital gain • actual sale • sale deed
Bot Summary:	Counsel for the appellant has framed the following questions of law: i) Whether the Tribunal was justified in deleting the penalty levied by Assessing Officer and confirmed by CIT(A) u/s 271(a)(c) of Rs. 34,05,436/- levied in respect of addition of Rs. 1,10,20,831/- ii) Whether the Tribunal was justidied in deleting the penalty of Rs. 34,05,436/- without considering the fact that no appeal was filed against the quantum order passed by Assessing ITA-203/2017 Officer iii) Whether on the facts and circumstances of the case, the finding of the Tribunal is perverse, contrary to the record and untenable in the eye of law In view of the observations made by the Tribunal in para 4.2 and 4.4 which reads as under:- 4.2. The assessing officer ignored the actual sale consideration at Rs. 1,81,95,000/- as well as the deemed consideration under Section 50C of the Act of Rs. 1,98,42,556/- but took the sale consideration of Rs. 2,65,28,870/- treating the same as fair market value on the basis of compensation paid by NHAI. He submitted that had the actual sale consideration and deem consideration under section 54C was taken then there have been no profit but loss. He further submitted that the assessee was of the view that compulsory acquisition by NHAI would not attract the capital gain further in respect of addition of Rs. 49,11,349/- the assessee was under bonafide belief that the income was exempt from the tax on account of compulsory acquisition under section 10(37) of the Act. In support of this Ld. Counsel for the assessee drew our attention to profit and loss account and the details on fixed assets as furnished during the course of assessment proceedings. Counsel for the assessee that out of two additions one addition of Rs. 61,09,482/- was wrongly made and the assessee has furnished all material facts before the Assessing Officer under these facts the assessing officer ought not to have levied the penalty. We find force into the contention of Ld. Counsel for the assessee that in the penalty proceeding the AO should consider the facts in right perspective. In the considered view, the explanation as given by the assessee ought to have been considered by the AO, The AO should not to have passed penalty order in a mechanical way merely on the assumption that the assessee has accepted the charge of concealment of income.

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 203 / 2017 Principal Commissioner of Wealth Tax-I, New Central Revenue Building, Statue Circle, Jaipur (Raj.) ----Appellant Versus Narayana Heights & Towers, S-220, Time Square, Central Spine, Vidhyadhar Nagar, Jaipur ----Respondent For Appellant(s) : Mr. Aditya Vijay for Mr. Anuroop Singhi For Respondent(s) : HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Order 17/08/2017 By way of this appeal, appellant has assailed judgment and order of Tribunal whereby Tribunal has allowed appeal preferred by assessee under Section 271 (1)(c) of Income Tax Act, 1961. Counsel for appellant has framed following questions of law: i) Whether Tribunal was justified in deleting penalty levied by Assessing Officer and confirmed by CIT(A) u/s 271(a)(c) of Rs. 34,05,436/- levied in respect of addition of Rs. 1,10,20,831/-? ii) Whether Tribunal was justidied in deleting penalty of Rs. 34,05,436/- without considering fact that no appeal was filed against quantum order passed by Assessing (2 of 3) [ITA-203/2017] Officer? iii) Whether on facts and circumstances of case, finding of Tribunal is perverse, contrary to record and untenable in eye of law? In view of observations made by Tribunal in para 4.2 and 4.4 which reads as under:- 4.2. He submitted that in respect of addition of Rs. 61,09,482/-, assessee transfer its part of agriculture land (0.2300 hectares) to one of its partners shri Sitaram on redemption as part of capital redemption while sale deed dated 5/11/2011 for Rs. 1,81,95,000/- cost of land against sale was Rs. 2,04,19,388/- stamped authority adopted value for purpose of stamp duty of Rs. 1,98,42,556/-. However, assessing officer ignored actual sale consideration at Rs. 1,81,95,000/- as well as deemed consideration under Section 50C of Act of Rs. 1,98,42,556/- but took sale consideration of Rs. 2,65,28,870/- treating same as fair market value on basis of compensation paid by NHAI. He submitted that had actual sale consideration and deem consideration under section 54C was taken then there have been no profit but loss. He submitted that this addition is patently wrong and it can not be considered as concealed income for which inaccurate particulars have been filed. He submitted that even Section 45(4) of Act can not be applied. He further submitted that assessee was of view that compulsory acquisition by NHAI would not attract capital gain further in respect of addition of Rs. 49,11,349/- assessee was under bonafide belief that income was exempt from tax on account of compulsory acquisition under section 10(37) of Act. Ld. Counsel relied on decision of coordinate bench rendered in case of GTO Vs. Rajmata Shanti Devi(2001) 76 ITR 299 (Ahd) and also place reliance on judgment of Hon ble Supreme Court rendered in case of Price Waterhouse Coopers Pvt. Ltd. Vs. CIT and another 348 ITR 306 (SC). He further submitted that assessment order under section 143(3) of Act, was passed on basis of information supplied by assessee. So, it is not case where assessee has deliberately concealed (3 of 3) [ITA-203/2017] material particulars. In support of this Ld. Counsel for assessee drew our attention to profit and loss account and details on fixed assets as furnished during course of assessment proceedings. 4.4. We have heard rival contention and perused material available on record, we find merit into contention of ld. Counsel for assessee that out of two additions one addition of Rs. 61,09,482/- was wrongly made and assessee has furnished all material facts before Assessing Officer under these facts assessing officer ought not to have levied penalty. We find force into contention of Ld. Counsel for assessee that in penalty proceeding AO should consider facts in right perspective. He should come to specific finding with regard to concealment of income. In considered view, explanation as given by assessee ought to have been considered by AO, AO should not to have passed penalty order in mechanical way merely on assumption that assessee has accepted charge of concealment of income. Ground no. 2 of appeal is allowed. We see no reason to interfere with matter. No substantial question of law arises. Hence, appeal stands dismissed. (INDERJEET SINGH),J. (K.S. JHAVERI),J. A.Sharma/14 Principal Commissioner of Wealth-tax-I v. Narayana Heights & Tower

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