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Income Tax Appellate Tribunal, DELHI BENCH “E”, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI PRASHANT MAHARISHI
Date of Hearing : 23 Date of Hearing : 23-11111111-201 2015 Date of Hearing : Date of Hearing : 23 23 201 201 Date of Order : Date of Order : 24-11111111-201 Date of Order : Date of Order : 201 2015 201
ORDER ORDER ORDER ORDER PER PER H.S. SIDHU PER PER H.S. SIDHU H.S. SIDHU : : : : JM H.S. SIDHU The Revenue has filed this against the order dated 6.11.2012 passed by the Ld. CIT(A)-XXV, New Delhi on the following grounds:-
“1. On the facts and circumstances of the case the Ld. CIT(A) erred in law and in facts in deleting the penalty of Rs. 6,31,113/-.
2. On the facts and circumstances of the case the Ld. CIT(A) erred in deleting the penalty u/s. 271(1)(c) by ignoring the fact that the assessee should have offered the income under the provisions of section 50C of the I.T. Act, 1961.
3. On the facts and circumstances of the case the ld. CIT(A) erred in observing in para 3.4 of his order that no penalty is leviable in the case of additions which are made on estimated income by ignoring the decision in the case of Addl. CIT vs. Chandrakantha and another (MP) 205 ITR 607; Addl. CIT vs. Lakshmi Industries and Cold Storage Co. Ltd. (All) 146 ITR 492; CIT vs. Md. Warasat Hussain (Patna) 171 ITR 405; AM Shah & Co. Vs. CIT (Guj) 238 ITR 415.”
The brief facts of the case are that the assessee has filed the return income of Rs. 28,28,749/- which included the short term capital gain of Rs. 2,33,000/- The case was taken up for scrutiny and it was found that the assessee has sold a property at C-96, Chander Nagar, Ghazaiabad UP for a sale consideration of Rs. 33,50,000/-. The sale consideration as per the stamp valuation authority was Rs. 43,40,000/-. The assessee was confronted about the cost of the property and about the sale consideration as per the stamp valuation authority u/s. 50C. Subsequently, the assessee has revised the cost of property at Rs. 22,40,000/- and has offered the short term capital gain of Rs. 21,00,000/- (Rs. 43,40,000 (-) Rs. 22,40,000) in place of Rs. 2,33,000/- declared by the assessee. So, the short term capital gain as per the AI was Rs. 21,00,000/- and the AO has made the addition of Rs. 18,67,000/- (Rs. 21,00,000/- (-) Rs. 2,33,000) and the AO had also initiated the penalty proceedings u/s. 271(1)© and has levied the penalty of Rs. 6,31,113/- on 28.6.2011.
Aggrieved by the aforesaid penalty order, Assessee appealed before the Ld. CIT(A), who vide impugned order dated 6.11.2012 has cancelled the penalty in dispute.
Now the Revenue is in appeal before the Tribunal against the order dated 6.11.2012 passed by the Ld. CIT(A).
In this case, Notice of hearing to the assessee was sent by the Registered AD post, in spite of the same, assessee, nor his authorized representative appeared to prosecute the matter in dispute, nor filed any application for adjournment. Keeping in view the facts and circumstances of the present case and the issue involved in the present Appeal, I am of the view that no useful purpose would be served to issue notice again and again to the assessee, therefore, I am deciding the present appeal exparte qua assessee, after hearing the Ld. DR and perusing the records
Ld. Departmental Representative relied upon the order of the AO and reiterated the contention raised in the Grounds of Appeal filed by them.
We have heard the Ld. DR and perused the records especially the orders of the Revenue authorities. We find that assessee submitted before the Ld. CIT(A) that AO was not justified to levy the penalty as there was no concealment of income and there was no furnishing of inaccurate particulars of income. We find that in this case the assessee has sold the property for Rs. 33,50,000/- and the assessee has declared the STCG of Rs 2,33,000/-. The AO has taken the circle rate of the property which is Rs 43,40,000/- and accordingly has worked out the capital gain of Rs 21,00,000/- uls 5OC. It was further submitted before the Ld. CIT(A) that the addition made by the AO is a notional addition and no penalty can be levied on notional addition or on notional income. It was further submitted that the assessee has accepted the addition with a view to buy peace with the department and also to avoid the litigation and the assessee also relied on the various case laws to support his claim that no penalty can be levied on surrendered income and the case laws are as under :-
(i) CIT V s Harshvardhan Chemicals & Minerals Ltd, 259 ITR 212 [2003] (Raj)
(ii) CIT Vs Adamkhan, 223 ITR 264 [1997] (Mad) (iii) Akshay Bhander Vs CIT, 220 ITR 325 [1996] (Gau) 7.1 From the above, we find AO has not detected any concealment of income either in the return of income or in the books of accounts of the assessee. In our considered opinion, the case of the assessee is also supported by the case of CIT vs. Reliance Petroproducts Pvt. Ltd (2010) 322 ITR 158 (SC) in which it has been held that mere making of a claim which is unsustainable law cannot be treated as furnishing of inaccurate particulars of income and as such will not attract the penalty proceedings uls 271(1)(c).
7.2 We also find that in the case of CIT Vs Harshvardhan Chemicals & Minerals Ltd, 259 ITR 212 [2:9~3] (Raj), that no penalty is leviable for any addition which is debatable, arguable and a controversial addition. In the case of CIT Vs Adamkhan, 223 ITR 264 [1997] (Mad), it has been held that no penalty is leviable in the case of additions which are made on estimated income or a conditional surrender is made by the assessee to avoid the penalty and to buy peace with the department. In the case of Akshay Bhander Vs CIT, 220 ITR 325 [1996] (Gau), it has been held that the penalty is a quasi-criminal in nature and no penalty can be levied unless there is evidence of concealment or the assessee is held guilty of concealment.
7.3 Keeping in view of the facts and circumstances of the case and the precedents relied upon by the Ld. CIT(A) in his impugned order, we are of the considered view that the AO has not detected or found any concealment of income in the case of the assessee and as such the AO is not justified to levy the penalty within the meaning of section 271(1)(c) and accordingly, the penalty levied by the AO was rightly cancelled by the Ld. CIT(A). Therefore, we do not see any infirmity in the well reasoned order passed by the Ld. CIT(A), hence, we uphold the same and dismiss the Appeal filed by the Revenue.
In the result, the Appeal filed by the Revenue stands dismissed.
Order pronounced in the Open Court on 24/11/2015.