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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SHRI D. KARUNAKARA RAO, AM & SHRI AMARJIT SINGH, JM
सुनवाई क� तार�ख / Date of Hearing: 10.12.2015 घोषणा क� तार�ख /Date of Pronouncement: 16.03.2016 आदेश / O R D E R PER AMARJIT SINGH, JM:
This is an appeal filed by the assessee against the order dated 30.09.2013 passed by the learned Commissioner of Income Tax (Appeals) 32, Mumbai [hereinafter referred to as the learned “CIT(A)”] relevant to the A.Y.2009-10 wherein levy of penalty by the Assessing Officer has been confirmed.
The assessee is an individual and engaged in the business of civil contract and manufacturing of RMC in the name and style of M/s. Mehta Enterprises. During the year, assessee has shown gross turnover of Rs.19.02 crores and other income on account of interest and declared net income of Rs.88,21,559/-. After the selection of the case of the assessee in scrutiny, notice u/s. 143(2) of the of the Income Tax Act, 1961 ( in short “the Act”) was issued and subsequently, notice u/s. 142(1) of the Act along with questionnaire was issued and served upon the assessee. After the receipt of the notices, the representative of the assessee furnished the following details:-
DIFFERENCES IN ITS DETAILS:-
As per the ITS details available on record, assessee received contract income from various parties. The assessee was asked to reconcile the ITS details and explain how the same has been reflected in computation of total income. On verification of the details, it was noticed that the assessee has short declared contract income in respect of M/s. Cowtown Land Development to the tune of Rs.3880 and M/s. Azure Tree Township Rs.3600/-. In view of the above, an amount of Rs.7480(3880+3600), is added to assessee’s total income.
REVISED COMPUTATION OF TOTAL INCOME :-
On verification of the ITS details, it was noticed that the assessee has sold immovable property for an amount of Rs.43,00,000/-. During the course of assessment proceedings, the representative of the assessee furnished revised computation of total income computing total income at Rs.1,02,59,826/- as against declared income of Rs.94,67,826/- in the original return of income. Assessee also enclosed form No.ITR-4 for revised income. In the revised computation, assessee offered short term capital gain on sale of property amounting to Rs.7,92,000/- on sale of flat reflected in ITS details.
Since the assessee declared short term capital gain only after issuance of notice u/s.143(2) of the Act and the transaction reported in ITS details, penalty proceedings u/s.271(1)(c) are initiated for furnishing inaccurate particulars of income. The revised computation filed by the assessee is considered for computation.
CLAIM OF EXPENSES:-
During the year, assessee has debited conveyance expenses of Rs.1,12,575/-, site expenses of Rs.2,48,695/-. On verification of the details of site expenses and conveyance expenses, it was noticed that some of the expenses were incurred in cash. Further, the element of personal usage of telephones and motor car cannot be ruled out.
The assessee was asked to furnish the supporting bills / vouchers in respect conveyance and site expenses. The vouchers produced in respect of cash expenses revealed that the same are incurred in petty cash, for which proper third party bills were not attached to it. However, the representative of the assessee explained that the nature of business is like that it is difficult to maintain third party bill in respect of all above expenses. The explanation of the assessee has been considered, however, the same cannot be accepted in toto in the absence of complete corroborative evidence. In view of the above and also to cover up the discrepancies, an amount of Rs.40,000/- is disallowed and added to assessee’s total income.
TELEPHONE AND MOTOR CAR EXPENSES:-
During the year, assessee has debited vehicle expenses of Rs.1,04,740/-, telephone expenses of Rs.2,36,295/-. The assessee was asked to furnish the item wise bills and log book in respect of usage of motor car, however, he has submitted that he has not maintained the log book and nor he maintained the item wise bills. In the absence of above, the usage of above items for personal purposes cannot be ruled out. In view of the above, an amount of Rs.35,000/- is treated as personal in nature and added to assessee’s total income.
After explanation submitted by the assessee the taxable income to the tune of Rs.1,03,42,306/- was found. Subsequently, the penalty proceedings u/s. 271(1)(c) of the Act was initiated on account of this fact that the assessee has sold immovable property of Rs.43,00,000/- but did not figure the detail in the return however after the issuance of notice the assessee submitted the revised return and disclosed the said transaction by showing the income to the tune of Rs.1,02,59,826/- as against returned income of Rs.94,67,826/-. Assessee also enclosed form No.ITR-4 for revised income. In the revised computation, assessee offered short term capital gain on sale of property amounting to Rs.7,92,000/- on sale of flat reflected in ITS details. Since the Assessing Officer is of the view that short term capital gain was disclosed by the assessee after issuance of notice u/s.143(2), therefore, the Assessing Officer levied the penalty in question. The representative of the assessee has argued that the revenue nowhere in his notice disclosed about the sale of flat however assessee has voluntarily disclosed the transaction therefore no penalty is leviable in accordance with law. It is also argued that the transaction has been disclosed but profit was not disclosed inadvertently, therefore the present case is not the case of furnishing the inaccurate particulars of income and concealment the particulars of income to evade the tax, hence the penalty is liable to be set aside. On the other hand the learned departmental representative has strongly relied upon the order passed by the learned CIT(A). After the selection of the case for scrutiny the above said four additions were made and on the appeal the only addition with regard to the short term capital gain was sustain. Subsequently, after the issuance of notice, the Assessing Officer levied the penalty to the tune of Rs.2,75,000/- which has been confirmed by the learned CIT(A) order in question. It is not disputed that the assessee has reflected in his return about the sale of flat of Rs.43,00,000/- however, short term capital gain which the assessee has been received has not been reflected. Subsequently the assessee filed the revised return voluntarily offering the tax to the tune of Rs.7,92,000/-. The authority did not highlight the fact about non furnishing of the details of profit on short term capital gain if any received by the assessee. The notice dated 20.08.2010 issued u/s. 143(2) of the Act nowhere speaks about the non- furnishing of tax on short term capital gain upon the sale of flat received to the tune of Rs.43,00,000/-. Moreover, the notices which have been received by the assessee before levying the penalty dated 22.12.2011 and 06.06.2012 which has been attached at page 48 of the paper book no.2 nowhere speaks about any particulars to levy the penalty on account of non furnishing the particulars in connection with short term capital gain. The notice is blank and in a specific format which nowhere contained the particulars of the present case. No doubt, there should be an intention on the part of the assessee to concealment of particulars of income to evade the tax which does not seem on record. In view of the law settled in CIT Vs. Manjunath Cotton and Ginning Factory (2013) 359 ITR 565 (Karataka) and in view of the order dated 06.11.2015 passed by the Income Tax Appellate Tribunal, B bench, Kolkata in ITA No.1303/Kol/2010. We are of the view that the learned CIT(A) did not passed the order judiciously and correctly therefore, we set aside the same. We are of the view that the present case is not the fit case to levy the penalty hence we order to delete the penalty.
In the result, appeal of the Assessee is Allowed. 4.