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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: S/SHRI B.R.BASKARAN & AMARJIT SINGH
PER AMARJIT SINGH, JM:
The assessee has filed the present appeal challenging the order dated 04.08.2010 passed by the Commissioner of Income Tax (Appeals)-8, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the assessment year 2006-07. The assessee is aggrieved by the decision of learned CIT(A) for confirming the penalty to the tune of Rs.21,39,513/- levied by the Assessing Officer u/s. 271(1)(c) of the Income Tax Act, 1961( in short “the Act”).
ITA No.6981/M/10 A.Y. 2006-07
We have heard the arguments advanced by the learned representative of the parties and perused the records carefully. The facts of case are that the assessee has filed his return of income for A.Y.2006-07 on 30.10.2006 declaring total income at Rs.6,18,703/-. The return was processed u/s. 143(1) of the Act on 05.07.2007 determining refund of Rs.34,789/-. Subsequently, the case was selected for scrutiny and notice u/s.143(2) dated 24.10.2007 and notice u/s. 142(1) were issued on the assessee. It came into the notice that the assessee claimed the Long Term Capital Gain of Rs.1,06,08,050/- on Debentures u/s. 10(38) of the Act and also claimed Short Term Capital Gain of Rs.1,94,522/- on Debentures. Since Long Term Capital Gain of Rs.1,06,08,050/- on Debentures & Short Term Capital Gain of Rs.1,94,522/- on Debentures were not exempted u/s. 10(38) of the Act, therefore, the notice was given to the assessee which was replied by the assessee admitting his mistake and subsequently filed the revised return. Thereafter, the Assessing Officer took the action against the assessee u/s. 271(1)(c) and levied the penalty of Rs.21,39,513/- which was confirmed by the learned CIT(A) hence the assessee is in appeal before us.
The contention of the representative of the assessee is that the assessee did not conceal any income nor furnished inaccurate particulars to avoid tax. It was further submitted that the Budget Speech of Finance Minister stated that the Long Term Capital Gain arising on “Securities” is proposed to be exempted. Since “Securities” includes debentures, therefore the assessee was under the impression that Long Term Capital Gain arising on sale of debentures was exempted.
Therefore no penalty is leviable in view of the law settled in 322 ITR 158(SC) case titled as CIT Vs. Reliance Petroproducts (P) Ltd. in view of order passed by co- A.Y. 2006-07
ordinate bench dated 05.01.2015 in I.T.A. No.1113/M/2012 titled as Mr. Narayan Ramchandra Rathi. However, learned Departmental Representative strongly relied upon the order passed by the learned CIT(A) in question. In the instant case assessee nowhere concealed the particulars of income nor furnished any inaccurate particulars of income. Assessee claimed exemption upon the Long Term Capital Gain and Short Term Capital Gain u/s. 10(38) of the Act. However, when the authority drew the attention of the assessee towards this fact that the claim of the assessee of the exemption upon the Long Term Capital Gain and Short Term Capital Gain is not in accordance with law then the assessee filed the revised return by paying the entire tax to the respondent. In case Reliance Petroproducts (P) Ltd.(Supra) it has been held that the claim which was not sustainable in the eyes of law, will not give rise to furnish of inaccurate particulars of income. Moreover under the similar circumstances co-ordinate bench of Mumbai in I.T.A. No.1113/M/2012 Mr. Narayan Ramchandra Rathi (Supra) has also accepted the contention of the assessee and set aside the penalty. By following the above mentioned law we are of the view that penalty levied in this case is liable to be deleted. Accordingly, we set aside the order of learned CIT(A) in question and delete the penalty levied u/s. 271(1)(c) of the Act.
In the result, the appeal of the assessee is hereby allowed.
Order pronounced in the open court on 20th January, 2016. (AMARJIT SINGH) (B.R.BASKARAN) लेखा सद"य / ACCOUNTANT MEMBER "या"यक सद"य/JUDICIAL MEMBER मुंबई Mumbai; "दनांक Dated : 20th January, 2016 MP MP MP MP A.Y. 2006-07
आदेश क" ""त"ल"प अ"े"षत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant
""यथ" / The Respondent. 3. आयकर आयु"त(अपील) / The CIT(A)- 4. आयकर आयु"त / CIT
"वभागीय ""त"न"ध, आयकर अपील"य अ"धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड" फाईल / Guard file. आदेशानुसार/ BY ORDER, स"या"पत ""त //// उप/सहायक पंजीकार (Dy./Asstt.