9911796707
TMI Blog2024 (7) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer of capital asset, assessee has also received consideration. The capital asset was also acquired at a total cost of ₹ 3,36,60,000/- for each flat. The right to acquire was acquired on 20th September, 2010, on transfer of such right naturally the capital gain arises in the hands of the assessee. The consideration received by the assessee, cost of acquisition and fact of surrender of capital asset squarely prove that there is a transfer of a capital asset for consideration which has cost of acquisition and therefore, there has to be a computation of capital gain on such transfer. AO was submitted both the cancellation letter where the amount of consideration received by the assessee is duly mentioned. Therefore according to us, on transfer of right to acquire these flats, has resulted in to a long term capital loss in the hands of the assessee and same dserves to be allowed. CIT (A) agreed that there is a transfer and capital gain is chargeable, however, he held that provisions of Section 50C of the Act and Section 56(2)(X) of the Act applies. This observation of the CIT (A) clearly shows that computation of capital gain is required to be made on these transactions. Whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has raised following grounds of appeal: - 1) On the facts of case the learned AO erred and learned CIT(A) erred in confirming of not determining Long Term Capital Loss Rs 3,39,66,946/and allowing the same to be carried forward. 2) Appellant craves, leave to add, alter and/or modify any ground of appeal before or at any time of hearing of Appeal. 03. The brief facts of the case shows that the assessee is an individual deriving income from salary and other sources, filed his return of income on 13th August, 2018, declaring total income at ₹ 72,25,940/-. 04. This return was selected for scrutiny showing specific information pointing tax evasion received from other agency. Therefore, notice under Section 142(1) of the Act was issued on 1st February, 2021. As per information on record it was found that the assessee has entered into transaction of immovable property for total consideration of ₹ 6,73,20,000/-, whereas the stamp duty valuation of such property is ₹ 6,84,70,540/-, thereby, difference of ₹ 11,50,540/- resulted on transaction of flat no. 2301, E Wing and 2506 B Wing, Navraj Grainder, Hiranandani, Mumbai-7. Now this issue is not in appeal before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explain the reason why he got allotment cancelled since substantial payments were made against the purchase of both these flats. He further held that as there is a transfer of allotted flats of the assessee in favour of the builders, provisions of Section 50C of the Act and 56(2)(x)(b) of the Act are applicable in this case. Since, the assessee has not taken prevailing market value of the flats whose allotments were cancelled and returned back to the builder, the long term capital loss cannot be allowed to the assessee. Therefore, he confirmed the action of the learned Assessing Officer. The assessee aggrieved with the same preferred the appeal before us. 09. The assessee has submitted two different paper books, one containing 49 pages and another containing 18 pages along with several judicial precedents. The learned Authorized Representative explain the facts of the case and stated that assessee has surrendered his right to acquire a flat, which is capital asset, on extinguishment of such right, the assessee received consideration and computed the capital loss therein. On such transaction provisions of Section 50C of the Act does not apply. 010. He further submitted that the cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, there is a transfer of capital asset. On the transfer of capital asset, assessee has also received consideration. The capital asset was also acquired at a total cost of ₹ 3,36,60,000/- for each flat. The right to acquire was acquired on 20th September, 2010, on transfer of such right naturally the capital gain arises in the hands of the assessee. The consideration received by the assessee, cost of acquisition and fact of surrender of capital asset squarely prove that there is a transfer of a capital asset for consideration which has cost of acquisition and therefore, there has to be a computation of capital gain on such transfer. The learned Assessing Officer was submitted both the cancellation letter where the amount of consideration received by the assessee is duly mentioned. Therfore according to us, on transfer of right to acquire these flats, has resulted in to a long term capital loss in the hands of the assessee and same dserves to be allowed. 013. The learned CIT (A) agreed that there is a transfer and capital gain is chargeable, however, he held that provisions of Section 50C of the Act and Section 56(2)(X) of the Act applies. This observation of the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee for A.Y. 2010-11 and 2012-13, were not available. Notice under Section 148 of the Act was issued on 30th March, 2019, in response to which assessee filed his return of income on 11th December, 2019, declaring total income of ₹ 23,30,520/-. The assessment under Section 143(3) read with section 147 of the Act was passed on 24th December, 2019 at a total income of ₹ 23,30,520/-. This is so because of the reason that assessee has offered income which was covered for the reopening of the assessment. The learned Assessing Officer initiated the penalty proceedings under Section 271(1)(c) of the Act for the additional income offered by the assessee in return in response to notice under Section 148 of the Act for concealment of income. After several notice issued to the assessee the assessee furnished the reply on 3rd March, 2021, stating that there is no concealment of income. The learned Assessing Officer noted that original return of income was at ₹ 9,54,268/-/ while the return of income filed in response to notice under section 148 of the income tax act was ₹ 2,330,520/ . Therefore it is evident that there is additional income shown in the return filed unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and income from other sources loss of ₹ 1,445,732 was claimed. Resulting into the net taxable income of ₹ 954,268. The case of the assessee was reopened where the reasons was not with respect to the claim of income from other sources of loss of ₹ 4,045,732/ . While filing the return of income under section 148 of the income tax act the assessee did not claim the loss of income from other sources of ₹ 4,045,732/ . The revised return was furnished declaring total income of ₹ 2,330,518/ . Thus it is apparent that assessee has offered higher income in response to notice under section 148 of the income tax act but the higher income is not on account of issues recorded in the reasons for reopening of the assessment. Therefore it is not correct to state that there was a detection by the revenue authorities that the assessee has claimed loss under the head income from other sources which is not allowable. This loss was offered for taxation by not claiming the same in the return of income in response to notice under section 148 of the act. Thus according to us the assessee has offered the higher income prior to detection by the revenue authorities. 024. Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d [2011-12], and in the finalised assessment, there was no addition to the income of the respondent/assessee over and in addition to what was already disclosed and admitted by him before the Revenue authorities. XXXXXXX 9. XXXXXX It will be seen from a perusal of Section 271 of the I.T. Act that it is a specific provision providing for imposition of penalties, and is a complete code in itself, regulating the procedure for the imposition of penalties prescribed. The proceedings are therefore to be conducted in accordance therewith, subject always to the rules of natural justice. The provisions for the assessment and levy of tax will not apply as such for the imposition of penalty, and when there is a specific provision, it is trite that it alone will govern the imposition of penalties. In terms of Section 271(1)(c) of the I.T. Act, the penal provision is attracted only when the conditions therein are fulfilled namely, when there is a concealment of the particulars of an assessee's income or when the assessee has furnished inaccurate particulars of such income. The crucial question that arises for consideration before us is whether on the facts of the instant case those pre-condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of Section 271(1)(c) to ensure that only the clear and unambiguous cases of defaults specified therein would attract a penalty. On the facts of this case, we fail to see how an assessee who disclosed his liability to tax, well before the Assessing Authority himself could determine it, can be seen as having concealed or incorrectly stated the facts leading to his liability. To invoke the penal provisions of the Act against an assessee in such a situation would throw to the winds the elements of fairness in tax administration and discourage assessees from disclosing defects in their tax returns before their Assessing Authorities. This is more so when, as in the present case, the assessee had also paid the interest on the differential tax to cover the period of delay in payment thereof. The payment of statutory interest having compensated the exchequer adequately, to further penalise the assessee would tantamount to an act of overkill and would be antithetical to the rule of law. We are of the firm view that the honesty of an assessee cannot attract the penal provisions under the I.T. Act and that, in the instant case, the essential pre-conditions for the invocation of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
