SALIL S. RANADIVE,MUMBAI vs. DCIT CEN CIR 15 & 16, MUMBAI

Assessee by: Shri K. Gopal Department by: Shri Shandrajit Singh सुनवाई क" तार"ख / Date of Hearing: 28.03.2016 घोषणा क" तार"ख /Date of Pronouncement: 08.07.2016 आदेश / O R D E R PER AMARJIT SINGH, JM:

The assessee has filed the present appeal against the order dated 02.07.2012 passed by the Commissioner of Income Tax (Appeal) 39, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2001-02. Under this appeal the assessee has challenged the confirmation of penalty levied u/s.271(1)(c)of the Income Tax Act, 1961 ( in short “the Act”).

ITA No.1797/Mum/11 A.Y.2007-08

“5. I have carefully considered the assessee’s submissions. It is admitted fact that in the original return of income the assessee had claimed Long Term Capital Loss of Rs.6,78,228/- on the sale of the flats when in actual fact the period of holding of the flats was less 3 years. Thus, the assessee’s reliance on the Supreme Court judgement in the case of Reliance Petroproduct (Private) Ltd. (322 ITR 158) can be clearly distinguished since in this case it is not a question of inaccurate claim but a wrong claim based on facts. It is further seen that had the search not taken place at the premises of the assessee, A.Y.2007-08 the fact regarding the receipt in cash of Rs.8 lakhs on the sale of flat would not have come to light and the assessee would not have offered the same for taxation. I am accordingly satisfied that the assessee had filed inaccurate particulars in respect of the capital gain arising from the sale of the flats at Krishna Kaveri CHS.

5.1 It is seen from the above facts that the short term capital gain of Rs.8 lakhs was not disclosed in the original return of income by the assessee. Further, long term capital loss of Rs.6,78,228/- was wrongly claimed and to that extent the assessee has filed inaccurate particulars of income. The assessee has admittedly sold the flats for Rs.28 lakhs and received Rs.20 lakhs in cheque and the remaining amount of Rs.8 lakhs in cash which he has not offered for assessment as short term capital gain in the original return. The assessee offered the income accruing on account of receipt of cash on sale of flat only after the search was conducted on the assessee. It is thus apparent that the assessee has concealed the particulars of income and furnished inaccurate particulars of his income. It is further seen that the assessee has not only failed to offer this Rs.8 lakhs which was received in cash for assessment in the original return filed and in addition to the above the assessee claimed a further long term capital loss of Rs.6,78,228/-. In A.Y.2007-08 view of the above taxable income a further long term capital loss of Rs.6,78,228/-. In view of the above taxable income has been under stated to the tune of Rs.14,78,228/- by filing wrong particulars regarding the nature of capital gain i.e. short term capital gain was wrongly claimed as long term capital loss. Hence, the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished by the assessee is Rs.14,78,228/-

6.4.1 In this case total incomes returned in the original return of income and in the return to income filed in response to section 153A of the I.T. Act are positive and hence Explanation 4(a) is not applicable. Certainly Explanation 4(6) is not applicable. As a result the amount of tax sought to be evaded should be found out by invoking Explanation 4(c) to section 271(1)(c) of the I. T. Act. In this case total income assessed ultimately is Rs.15,01,060/- and the amount of income in respect of which particulars have been concealed is the short term capital gains of Rs.8 lakhs. The A.O. is directed to recompute the penalty u/s.271(1)(c) applying Explanation 4(c) to section 271(1)(c) of the I. T. Act.

3.2 The Assessing Officer assessed the concealment of income to the tune of Rs.14,78,228/-and levy a penalty @ 100% of tax sought to be evaded amounting to Rs.4,88,438/-. However, the learned CIT(A) has arrived at this conclusion that the assessee only concealed the Rs.8 lakhs has not been shown as Short Term Capital Gain. It is not in dispute moreover admitted by the assessee also that the assessee failed A.Y.2007-08 to show the sale account to the tune of Rs.8 lakhs in his return. Undoubtedly, there is no explanation on record as to why the said amount of Rs.8 lakhs was not reflected in the return of income resultantly the assessee did not show the Short Term Capital Gain to the tune of Rs.8 lakhs. It is clear case wherein the assessee did not disclose an amount of Rs.8 lakhs in his return. Making the statement before the tax authority nowhere justify the claim of the assessee because it is not a case of the recovery of unaccounted cash / other articles such as jeweler etc. In simple sense, the assessee did not show the said amount as income in his return which came into existence only after the search was conducted on the assessee. There is no cogent and convincing evidence on record to which it can be assumed that the learned CIT(A) has passed the order wrongly and illegally. No distinguishable facts to the finding of the learned CIT(A) has been produced on record. In view of the above said discussion we are of the view that the learned CIT(A) has passed the order judiciously and correctly which does not require to interfere with at this appellant stage.