SMT. BHAVINIBEN K. PATEL,AHMEDABAD vs. THE DY.CIT, CIRCLE-9, AHMEDABAD

आयकर अपील"य अ"धकरण, अहमदाबाद "यायपीठ ‘बी’ अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “ B ” BENCH, AHMEDABAD U;kf;d lnL; ds le{kA loZJh iznhi dqekj dsfM;k] ys[kk lnL; ,oa egkohn izlkn] loZJh iznhi dqekj dsfM;k] ys[kk lnL; ,oa egkohn izlkn] U;kf;d lnL; ds le{kA loZJh iznhi dqekj dsfM;k] ys[kk lnL; ,oa egkohn izlkn] loZJh iznhi dqekj dsfM;k] ys[kk lnL; ,oa egkohn izlkn] U;kf;d lnL; ds le{kA U;kf;d lnL; ds le{kA BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER And SHRI MAHAVIR PRASAD, JUDICIAL MEMBER

आयकर अपील सं./I.T.A. No.2235/Ahd/2014 ("नधा"रण वष" / Assessment Year : 2006-07) Smt. Bhavniben K. Patel Dy. Commissioner of बनाम/ Office No.3 & 4, Income-Tax, Vs. Hasubhai Chambers, Circle – 9, Nr. Town Hall, Ellisbridge, Ahmedabad. Ahmedabad - 380006 "थायी लेखा सं./जीआइआर सं./PAN/GIR No. : APEPP 8958 K .. (अपीलाथ" /Appellant) (""यथ" / Respondent) अपीलाथ" ओर से / Appellant by : --None-- ""यथ" क" ओर से/Respondent by : Shri Alok Kumar, Sr. D.R.

25/07/2017 सुनवाई क" तार"ख / Date of Hearing 07/09/2017 घोषणा क" तार"ख /Date of Pronouncement

आदेश / O R D E R

PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : This is an appeal by the assessee against the order of the Commissioner of Income Tax(Appeals)-XV, Ahmedabad, dated 28th May, 2014, for confirming the penalty under section 271(1)(c) of the Income tax Act, 1961 (‘the Act hereinafter’) for the Assessment Year (AY) 2006-07, on the following Grounds: i. The learned CIT (A)-XV, Ahmedabad has erred in law and on the facts of the case by confirming penalty of Rs.83,000/- u/s.271(1)(c) levied by the Assessing Officer. 2. The relevant facts as culled out from the materials on record are as under:- The assessee has filed his return of income for the year under consideration on 25/07/2006 showing therein total income of Rs.45,03,890/-. The assessment was finalized u/s.143(3) of the I.T. Act, determining therein total income of Rs.48,70,240/- and Short Term Capital Gain of Rs.3,66,353/-.

2.2 The reply was considered but not acceptable. In para 3 of the AO stated that the claim of cost of improvement of Rs.3,66,353/- is disallowed in the absence of details furnished. During the course of appellate proceedings on query through submission dtd.18/01/2011 it was informed by the ld. AR that the betterment charges have been paid to AUDA for the land situated at Bodakdev-Makrba-Vejalpur as a result of finalization of Town Planning Scheme by AUDA which go to increase the cost of land and therefore the same has been rightly considered as cost of improvement while calculating the capital gain. It was stated that copy of land account was filed along with the return in which payments made to AUDA with dates and amounts were informed. Penalty u/s.271(1)(c) of the Act are separately initiated for furnishing inaccurate particulars of income. It is his duty to furnish correct information to the department while filing the return of income.

2.3 Having regard to the above facts and circumstances of the case, it is clear that assessee had concealed his income, within the meaning of Smt. Bhavniben K. Patel vs. DCIT explanation 5A to Section 271(1)(c) of the I.T. Act. Learned AO levy the penalty u/s.271(1)(c) of the I.T. Act of Rs.83,000/-.

4.2 For imposing of penalty, it is further necessary to bring on record some materials or evidences or the circumstances leading to reasonable conclusion that the amounts of additions under consideration represent the income of the appeallant. There is conscious concealment or act of furnishing inaccurate particulars of income on the part of the appellant. Moreover, onus lies on the Department to prove that the explanation offered by the Appellant is false.

4.3 Assessee filed written submission and cited Supreme Court’s judgment in the case of Dharmendra Textile Processors [306 ITR 277] in which it has been held that the penalty u/s.271(1)(c) is a civil liability and, therefore, ‘willful concealment’ and ‘mens rea’ are not essential ingredient for imposing penalty, meaning thereby, where addition is confirmed, penalty shall mechanically follow. This judgment of the Supreme Court has been over-ruled by the Supreme Court itself in case of Rajasthan Spg. & Wvg. Mills [23 DTR 158 (SC)]. In the case of Kanbay Software India (P.) Ltd. vs. DCIT [22 DTR (Pune) (Trib) 481], has also held that no penalty can be levied in respect of bonafide claim.

4.4 Assessee also submitted Supreme Court decision in the case of Reliance Petroproducts Pvt. Ltd. [322 ITR 158] wherein penalty was levied on account of disallowance u/s.14A and the Hon’ble Supreme Court decided the appeal in favour of the assessee. In the present case as explanation duly elaborately the claim of improvement cost from capital gain. Because the same has not been accepted by the AO, no penalty u/s.271(1)(c) can be levied as held by various judicial pronouncement narrated herein above. 8. In view of the above, we are of the considered opinion that this is not a fit case where penalty can be confirmed. Therefore, we allow this appeal.

This Order pronounced in Open Court on 07/09/2017 ¼iznhi dqekj dsfM;k½ Yks[kk lnL; (PRADIP KUMAR KEDIA) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 07/09/2017 Priti Yadav, Sr.PS आदेश क" ""त"ल"प अ"े"षत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant 2. ""यथ" / The Respondent. 3. संबं"धत आयकर आयु"त / Concerned CIT 4. आयकर आयु"त(अपील) / The CIT(A)-XVI , Ahmedabad. "वभागीय ""त"न"ध, आयकर अपील"य अ"धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड" फाईल / Guard file. आदेशानुसार/ BY ORDER, स"या"पत ""त //// उप/सहायक पंजीकार (Dy./Asstt.