THE INCOME-TAX OFFICER, AMRITSAR. vs. SH. RAJIV MEHRA PROP., AMRITSAR.

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. N. S. SAINI, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I. T. A. No. 452(Asr)/2014 Assessment Year: 2008-09

Income Tax Officer,\Ward 3(3), Vs. Shri Rajiv Mehra Prop. Amritsar M/s H.D. Mehra Chemical Works, Lahori Gate, Amritsar PAN No. ABPQM 1297C (Appellant) (Respondent)

Appellant by : Sh. Ashwani Kalia, CA Respondent by: Sh. Bhawani Shankar, DR

Date of Hearing : 13.2.2019 Date of Pronouncement : 14.2.2019

ORDER Per N.S. SAINI, AM: This is an Appeal by the Revenue directed against the Order by the Commissioner of Income Tax (Appeals), Amritsar dated 5.5.2014.

a) Addition on account to Long Term Capital Gains Rs. 84,17,645/-

2 ITA No. 452/Asr/2014 – Shri Rajiv Mehra Prop. M/s H.D. Mehra Chemical Works, Amritsar b) Disallowance out of car expenses Rs. 45,142/- c) Disallowance out of telephone expenses Rs. 11,483/- d) Disallowance out of interest Rs. 4,69,267/-

Capital Gains’ to Rs. 84,17,645/- to Rs. 1,70,737/-.

reversed the order of the CIT(A).

inaccurate particulars of income by the assessee of Rs. 84,17,645/- and levied penalty

of 200% tax sought to the evaded by the assessee at Rs. 37,07,496/-

assessee had made mere legal claim for the purpose of indexation and indexed cost of

acquisition should be taken as on 1.4.1981 in view of the fact that the assessee has

received the property by inheritance / will form his father, therefore, it cannot be said

that the assessee submitted any particulars which was false and for this he placed

reliance on the decision of the Hon'ble Supreme Court in the case of Reliance Petro

proudcts P Ltd 322 ITR 158, wherein, the Hon'ble Supreme Court held that a mere

making of a claim, which is not sustainable in law, by itself, will not amount to

furnishing inaccurate particulars regarding income of the assessee. Such a claim

made in the return cannot amount to furnishing inaccurate particulars. The CIT(A)

therefore, deleted the penalty observing that the AO has not proved that claim was

3 ITA No. 452/Asr/2014 – Shri Rajiv Mehra Prop. M/s H.D. Mehra Chemical Works, Amritsar

false anywhere in the penalty order and earlier CIT(A) has also given findings that

indexed cost should be adopted as on 1.4.1981, thus, there is difference of opinion on

this issue and he was also of the opinion that there was no transfer of property by

virtue of family settlement dated 2.9.2003, hence, the penalty levied u/s 271(1)(c) of

the Act for furnishing of inaccurate particulars of income is deleted. He observed that

the AO has levied penalty @ 200% of the tax sought to the evaded without giving any

reason for levying penalty on such a higher rate. The action of the AO levying

penalty @ 200% is not sustainable and accordingly he held that the grounds of appeal

are decided in favour of the assessee as he has neither concealed any particulars nor

furnished inaccurate particulars of income and allowed the appeal of the assessee.

are of the considered view that the Ld. DR simply relied upon the order of the AO. He

could not point any specific error in the order of the CIT(A). He also could not

controvert the findings of the CIT(A) which is to the effect that the AO has not proved

the claim made in the return of income as false in the penalty order and that CIT(A)

earlier had given a findings that indexed cost should be adopted as on 1.4.1981 and

thus there was difference of opinion on the issue and that he was also of the opinion

that there was no transfer of property by virtue of family settlement dated 2.9.2003.

Therefore, we find no reason to interfere with the order of the CIT(A) which is hereby

confirmed. The grounds of appeal are dismissed.

4 ITA No. 452/Asr/2014 – Shri Rajiv Mehra Prop. M/s H.D. Mehra Chemical Works, Amritsar 10. In the result, the appeal of Revenue is dismissed.

Order pronounced in the open court on 14.2.2019.

Sd/- Sd/- (N. K. Choudhry) (N.S. Saini) Judicial Member Accountant Member

Date: 14.02.2019 ‘rkk’ Copy of the order forwarded to: (1) The Appellant (2) The Respondent (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T.

5 ITA No. 452/Asr/2014 – Shri Rajiv Mehra Prop. M/s H.D. Mehra Chemical Works, Amritsar

Date Initial 1. Draft dictated on 13.2.19 Sr.PS/PS 2. Draft placed before 14.2.19 Sr.PS/PS author 3. Draft proposed & placed JM/AM before the Second Member 4. Draft JM/AM discussed/approved by Second Member 5. Approved Draft comes 14.2.19 Sr.PS/PS to the Sr. P.S./P.S. 6. Kept for pronouncement 14.2.19 Sr.PS/PS on 7. File sent to the Bench 15.2.19 Sr.PS/PS Clerk 8. Date on which file goes to the A.R. 9. Date on which file goes to the Head Clerk 10. Date of dispatch of Order