SHRI MAYANK J. PATEL,,BARODA vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(2),, BARODA

By way of this appeal, the assessee appellant has challenged correctness of the order dated 16th September, 2016, passed by the learned CIT(A), upholding imposition of penalty under section 271(1)(c) of the Income Tax Act, 1961 (‘the Act’ hereinafter) for the assessment year 2010-11.

Grievance of the appellant is that the learned CIT(A) ought to have deleted the impugned penalty of Rs.1,44,260/-.

To adjudicate on this appeal, it is sufficient to take note of the fact that while computing capital gains the assessee had taken the cost of acquisition of Rs.1,28,650/- as in the financial year 1981-82 while it was actually purchased in the financial year 1985-86. The explanation of the assessee was that the information taken by the assessee was on the basis of inputs from his father who has passed away on 07.01.2015. The Assessing Officer, however, imposed the penalty of Rs.1,44,260/- for furnishing of inaccurate particulars. Aggrieved, assessee carried the matter in appeal before the learned CIT(A) but without any success. The assessee is not satisfied and is in second appeal before me.

I have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position.

I have noted that the asset in question was purchased by assessee’s father who has since passed away, and it was based on this input that the assessee had computed the capital gain incorrectly. In these circumstances, in my view, the explanation of the assessee cannot be rejected so far as limited purpose of imposition of penalty is concerned.

In view of these discussions, and bearing in mind entirety of the case, I delete the impugned penalty of Rs.1,44,260/-

In the result, the appeal is allowed. Pronounced in the open court today on the 15th day of October, 2018.