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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Shri Mahavir Prasad & Shri Amarjit Singh
Revenue by: Shri R.R. Makwana, Sr. D.R. Assessee by: Shri S.N. Divatia, A.R. Date of hearing : 06-09-2021 Date of pronouncement : 21-09-2021 आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
This assessee’s appeal for A.Y. 2014-15, arises from order of the CIT(A)-6, Ahmedabad dated 12-02-2018, in proceedings under section 271(1)(c) of the Income Tax Act, 1961; in short “the Act”.
The solitary ground of appeal
of the assessee is directed against the decision of ld. CIT(A) in sustaining the penalty levied u/s. 271(1)(c) of the Act of Rs. 5,45,725/- Page No 2. Ghanshyambhai Kanubhai Desai vs. ITO
3. In the case of the assessee, assessment u/s. 143(3) of the Act for the year under consideration was finalized on 24-11-2016. At the time of assessment, the Assessing Officer noticed that the assessee has introduced capital as a immoveable property of Rs. 1,14,72,000/- in the partnership firm namely Jai Corporation . The said property was purchased jointly with four other co-owners at Rs. 4,14,35,000/- in F.Y. 2012-13 wherein assessee’s share was of 25%. During the course of assessment, the Assessing Officer noticed that assessee has not shown the aforesaid investment in the land in his return of income. Therefore, share of the assessee in the land @ 25% was determined at Rs. 1,04,75,147/- on which short term capital gain of Rs. 9,96,853/- was computed. Because of not furnishing any explanation, the same was added to the total income of the assessee. The Assessing Officer has also levied penalty u/s. 271(1)(c) of Rs. 3,40,851/- for furnishing inaccurate particulars of income.
During the course of appellate proceedings before us at the outset, the ld. counsel contended that on identical facts and similar issue penalty levied in the case of co-owner was deleted by the decision of Co-ordinate Bench of the ITAT in the case of Pravinbhai Kanubhai Desai vs. ACIT vide dated 01-06-2020. The ld. Departmental Representative has not disputed the fact that on similar issue and facts the ITAT vide above cited order has decided the issue in favour of the assessee. The relevant part of the decision of the Co-ordinate Bench of the ITAT is reproduced as under:-
“16. We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly the notice under section 143(2) was issued dated 20 September 2015 and notice under section 142(1) was issued upon the assessee dated 27th of May 2016. However the Page No 3 Ghanshyambhai Kanubhai Desai vs. ITO assessee has filed the revised computation of income and paid the taxes of Rs. 2,69,732/- vide . A.Y. 2014-15 challan dated 31st December 2015. Thus what is transpired is this that the assessee has disclosed the income before the detection of the same by the AO in the assessment proceedings.
Now the first controversy before us arises so as to adjudicate whether the assessee has furnished inaccurate particulars of income by not disclosing the income under the head capital gain and by claiming the excess interest expenses. The term inaccurate particular of income has not been defined under the provisions of section 271(1)(c) or elsewhere in the Act the Act. However, the meaning of the term inaccurate has been discussed by the Hon'ble Supreme Court in the case of Reliance Petroproducts (P) Ltd reported in 189 taxman 322 wherein it was held that the term 'inaccurate' signifies deliberate act or omission on the part of the assessee. As such, the details/information contained in the return of income /financial statements /audit report which are not correct according to truth, and were furnished by the assessee with the dishonest intent shall be treated as inaccurate particulars. In holding so, we find support and guidance from the judgement of Hon'ble Supreme Court in the case of Reliance Petroproducts (P) Ltd (supra).
We are not concerned in the present case with the mensrea. However, we have to only see as to whether in this case, as a matter of fact, the assessee has given inaccurate particulars. In Webster's Dictionary, the word "inaccurate" has been defined as :-- "not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript."
We have already seen the meaning of the word "particulars" in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied in the Return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false.
Now, if we analyses the facts of the present case in the light of the above stated discussion, we find that the assessee has offered income by filing the revised computation of income which was accepted by the revenue. The assessee has filed such revised computation of income before the detection by the revenue about such additions made during the assessment proceedings. Thus it can be inferred that the assessee has not disclose the income with any dishonest intent. Accordingly, in our considered view the assessee cannot be visited with the penalty under section 271 (1)(c) of the Act.
We are also conscious to the fact that the addition in the present case under the head capital gain has been made under the provisions of section 45(3) of the Act, representing the such addition during the assessment proceedings being deemed income does not automatically attract the penalty provisions as envisaged under the provisions of section 271(1)(c) of the Act. As such, the onus, in the case of deemed income as specified under section 45(3) of the Act, lies on the Revenue to prove that such deemed income is the real income of the assessee in order to attract the penalty provisions specified under section 271(1)(c) of the Act. In holding so we find support and guidance from the judgment of Hon'ble Gujarat High Court in the case of CIT Vs. Baroda Tin works Box reported in 221 ITR 661 wherein it was held as under:
Sections 68, 69, 69A, 69B and 69C are all part of the same scheme where certain amounts though not proved to be the income of the assessee of the previous year concerned are for the purpose of charging to tax are deemed to be so by creating legal fiction absolving the department from its initial duty to prove that any such is the income of the assessee. But for these provisions, it was for the revenue to prove that any sum, not disclosed by the assessee but which is sought to be taxed as Page No 4 Ghanshyambhai Kanubhai Desai vs. ITO income of the assessee, is the income of the assessee for the previous year relevant to the assessment year.
In view of the above, we hold that the assessee has not deliberately undisclosed the income under the head capital gain and claimed excessive interest expenses. As such the assessee himself suo-moto revised the computation and paid the taxes before any finding from the AO. Accordingly, in such a situation the penalty provisions cannot be attracted. Hence, we set aside the finding of the learned CIT (A) and direct the AO to delete the penalty imposed by him. Thus the ground of appeal of the assessee is allowed.” Since on identical issue and similar fact the penalty levied u/s. 271(1)(c) as cited above has been deleted by the ITAT, Ahmedabad in the case of other co-owner i.e. Pravinbhai Kanubhai vs. ACIT, therefore, following the principle of consistency and finding of the Co-ordinate Bench, the appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 21-09-2021 Sd/- Sd/- (MAHAVIR PRASAD) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 21/09/2021 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद