SHRI MUKESHBHAI KALIDAS PATEL,AHMEDABAD vs. THE ASST.DIT.,(INTL.TAXN.), AHMEDABAD

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ITA 1208/AHD/2014Status: DisposedITAT Ahmedabad27 October 2017AY 2007-082 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the expenses claimed were for improvements to land, which was not disputed, and the interest credits were inadvertently omitted. Therefore, it was not a fit case for imposing a concealment penalty.

What were the facts?

The assessee, a non-resident, had a quantum disallowance of Rs. 5,70,000 for reimbursement of land levelling and construction expenses, and an addition of Rs. 67,919 for interest, which had attained finality. The Assessing Officer imposed a penalty under Section 271(1)(c) for concealment of income.

What were the issues?

Whether the penalty for concealment of income under Section 271(1)(c) was rightly imposed when the disallowances were due to lack of evidence and inadvertent omission, and not necessarily concealment.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD ‘D’ BENCH, AHMEDABAD

Per Pramod Kumar AM:

1.

This appeal challenges learned CIT(A)’s order dated 03.02.2014 upholding penalty of Rs.1,37,996/-, under Section 271(1)(c) of the Income-tax Act, 1961, for the assessment year 2007-08.

2.

The related quantum disallowance of Rs.5,70,000/- was in respect of reimbursement of expenses for levelling of land, construction of compound wall and related expenses in connection with sale of land. The disallowance was made for want of satisfactory supporting evidences, and has now attained finality. There is another related small addition of Rs.67,919/- in respect of interest credited in bank accounts. The Assessing Officer has imposed the impugned penalty by observing that had the case was not been picked up for scrutiny assessment, the income would have remained undetected. The assessee carried the matter in appeal before the CIT(A) but without any success. The assessee is now in second appeal before us.

ITA No. 1208/Ahd/2014 Shri Mukeshbhai Kalidas Patel vs. ADIT A.Y. 2007-08 Page 2 of 2

3.

We 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.

4.

We find that the assessee is a non-resident and the present assessment is basically on account of sale of land in the relevant previous year. The expenses are also stated to have been incurred over a period of time and are claimed as cost of improvement. The fact of improvement however is stated in the sale deed and is not even disputed. The small interest credits to assessee’s account having been inadvertently left out cannot be straightaway rejected either. In view of these discussions, in our considered view, it was not a fit case for imposition of concealment penalty under Section 271(1)(c) of the Act. We, therefore, delete the same.

5.

In the result, the appeal is allowed. Order pronounced in the open Court on this 27th of October, 2017.

Sd/- Sd/-

Mahavir Prasad Pramod Kumar (Judicial Member) (Accountant Member) Ahmedabad, the 27th day of October, 2017 **bt* Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad

Date of taking dictation: ....26.10.2017.....- ..prepared as per two page manuscript of Hon’ble AM 1. which is attached with this case file......................... 2. Date of typing & draft order placed before the Dictating Member: ........26.10.2017.................. 3. Date on which the approved draft comes to the Sr. P.S./P.S.: ....... 26.10.2017......................... 4. Dt. on which the fair order is placed before the Dictating Member for Pronouncement: .... 26.10.2017........... 5. Date on which the file goes to the Bench Clerk: ...... 30.10.2017..................... 6. Date on which the file goes to the Head Clerk: ..…………………... 7. The dt. on which the file goes to the Astt. Registrar for signature on the order: ......................... 8. Date of despatch of the Order: .........................

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