TaxTMI 
TaxTMI 
2012 (12) TMI 62
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.... from M/s. Celica in the form of 8 flats admeasuring 4055 Sq. ft. The AO stated that as per the agreement entered into, the developer i.e. M/s. Celica, was to pay compensation @ 18% simple interest on the area of said flats at the rate of Rs.3000/- per sq. ft. in case of delay and until actual physical possession of said flats were handed over. Thus, AO considered the value of the flats allotted to assessee @ 3000 per Sq. ft and worked out value on account of surrender of tenancy right at the rate of Rs. 1,21,65,000/-. The AO stated that it was a Long Term Capital Gain on transfer of tenancy rights. Further AO stated that assessee sold one flat in the assessment year under consideration and offered Short Term Capital Gain of Rs. 9,06,509/-. The AO stated that assessee also received advance of Rs. 7,00,000/- against sale of another flat i.e. Flat No. 408 having super built up area of 620 sq. ft. AO observed that Stamp Duty estimated value of the flat @ Rs. 3,264/- per Sq. ft and accordingly computed Short Term Capital Gain of Rs. 3,67,180/- in the assessment year under consideration. 3. Being aggrieved, assessee filed appeal before First Appellate Authority. 4. The Ld. CIT(A) conf....
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....ed, assessee filed appeal before First Appellate authority. The assessee contended that penalty order is barred by limitation as per Sec. 275 of I.T. Act. The assessee also contended before Ld. CIT(A) that levy of penalty is bad in law, unjustified, unreasonable, excessive , void ab initio and is liable to be cancelled. 7. In respect of the contention of assessee that penalty order is barred by limitation, Ld. CIT(A) has held that period of limitation to pass impugned order of penalty commenced from the date of order of fresh assessment i.e. 21.12.2009 and was to expire either on 31.3.2010 i.e. last date of financial year in which said assessment was completed or 30.6.2010 i.e. 6 months from the end of the month in which impugned penalty proceedings was initiated, whichever period expired later. Therefore, impugned penalty order was to be passed on or before 30.6.2010. Since penalty order was passed on 25.6.2010, it is well within time as provided u/s. 275 of the Act and accordingly rejected the contention of assessee that penalty order is barred by limitation. 8. In respect of contention, as to whether levy of penalty is justified or not, Ld. CIT(A) has held that levy of penalt....
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.... of tenancy rights. The appellant had not declared any income on surrender of tenancy rights. The AO could detect this only when he made enquiries into the source of Short Term Capital Gain declared in respect of sale of a flat. Even at that stage the appellant instead of admitting its liability to declare Long Term Capital Gain on surrender of tenancy right made a false claim that it had surrendered the tenancy right in the year 1993 and no capital gain was assessable in the current year. The appellant could not prove this claim even before the Tribunal. This shows that the appellant kept under the wrap the Long Term Capital Gain brought to tax by the AO, which could not have been detected had the AO not launched inquiry into it suo motto. The appellant has again made a false claim before me contending that it had furnished on its own all particulars necessary for computation of Short Term Capital Gain on surrender of tenancy rights. It has also made a false claim that the income assessed by the AO by way of Long Term Capital Gain on surrender of tenancy rights had been offered to tax by it in a staggered form by way of Short Term Capital Gain on sale of flats in later years. Dec....
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....also stated in para-6 of impugned order that penalty is in respect of fresh assessment order and as per clause (c) of Sec. 275(1) of the Act, period of limitation prescribe is to pass penalty order in six months from the end of the month in which penalty proceedings are initiated or before expiry of financial year in which proceedings in the course of which action for imposition of penalty is initiated. Ld. DR submitted that in the present case, fresh assessment order was passed on 21.12.2009 and therefore period of 6 months is to expire after the relevant financial year i.e. on 30.6.2010. Hence penalty could be imposed on or before 30.6.2010. Since penalty order is passed on 25.6.2010, it is within time as provided u/s. 275 of the Act. Ld. DR further submitted that decision of CIT Vs Moradabad General Art Metal Mills(supra) relied upon by Ld. AR is not applicable to the facts of the case. 10. We have carefully considered submissions of Ld. Representatives of parties and orders of authorities below as well as provisions of Sec. 275 of I.T. Act. We have also gone through decision of Allahabad High Court in the case of CIT Vs Moradabad General Art Metal Mills (supra) relied upon by ....
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....ting confirmation of penalty in respect of Long Term Capital Gain, as computed, Ld. AR submitted that assessee was allotted 8 flats in lieu of surrender of tenancy rights. The assessee sold only one flat in the assessment year under consideration and remaining flats were sold in subsequent assessment years. He submitted that assessee offered Short Term Capital Gain aggregating Rs.81,69,370/- (i.e. Rs. 9,25,509 in A.Y. 2001-02, Rs. 65,56,714/- in A.Y. 2002-03 & Rs. 6,56,147/- in A.Y. 2003-04) and paid tax aggregating Rs. 29,58,780/- which is more than the tax as computed by AO. He further submitted that whatever tax has been computed by AO in the assessment year under consideration is on the basis of information given by assessee. Hence, there is no furnishing of inaccurate particulars by AO. He submitted that dispute is only as to whether total tax is to be paid in one assessment year i.e. assessment year 2001-02 or it is to be paid in more than one assessment year. He submitted that assessee paid more tax by way of Short Term Capital Gain i.e. aggregating Rs. 29,58,780/-, no penalty should be levied and relied on following decisions: 1) CIT Vs Manilal Tarachand (Guj) - 254 ITR 63....
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....ssee made a false claim as far as Long Term Capital Gain which arose to assessee in the assessment year under consideration. 16. Hence, we hold that declaring of Short Term Capital Gain by assessee in assessment year under consideration i.e. assessment year 2001-02 of Rs. 9,06,509/- does not satisfy the facts and cannot be a substitute of Long Term Capital Gain of Rs. 1,21,65,000/- and Short Term Capital Gain of Rs. 3,67,180/- arose to assessee in the assessment year under consideration. Similarly the fact that in the subsequent assessment years i.e. 2002-03 and 2003-04, declaring Short Term Capital Gain by assessee on sale of remaining flats, which assessee got from the developer M/s. Celica on account of surrender of tenancy rights does not set right the fact that assessee has not rightly declared Long Term Capital Gain arose to assessee in the assessment year 2001-02. The fact is that in the assessment year under consideration, assessee did not declare capital gains correctly and it resulted in not disclosing correct income liable to tax. The reliance placed by Ld. AR on the decision of CIT Vs Manilal Tarachand (Guj) (supra) is not applicable to the facts of the case before us ....