NARAYAN RAMCHANDRA RATHI, MUMBAI V. ITO 3(1), THANE

ITA 1113/MUM/2012

• Counselvise Citation: 111319914 RSA 2012
• Duration Of Justice: 2 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 15-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Assessee Lawyers: C N VAZE
• Section: 10

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE S/SHRI I.P. BANSAL, (JM) AND B.R.BASKARAN (AM) . . , . . , ./ I.T.A. NO.1113/MUM/2012 ( / ASSESSMENT YEAR : 2006-07) MR.NARAYAN RAMCHANDRA RATHI, M/S CVK ASSOCIATES, CAS, A-103, VARADLAXMI, GOKHALE ROAD, MULUND(E), MUMBAI-400081 / VS. INCOME TAX OFFICER 3(1), THANE ( / APPELLANT) .. ( / RESPONDENT) ./ !' ./PAN/GIR NO. :ABNPR5130Q # / ASSESSEE BY: SHRI C N VAZE $ # / REVENUE BY:: SHRI PREMANAND J % & $ ' ( / DATE OF HEARING :5.1.2015 )* $ ' ( / DATE OF PRONOUNCEMENT : 5.1.2015 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 28.11.2011 PASSED BY LD CIT(A)-1, THANE AND IT RELA TES TO THE ASSESSMENT YEAR 2006-07. THE ASSESSEE IS AGGRIEVED BY THE DEC ISION OF LD CIT(A) IN CONFIRMING THE PENALTY OF RS.5,36,234/- LEVIED BY T HE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. TH E FACTS THAT LED TO LEVY OF PENALTY ARE THAT THE ASSESSEE, DURING THE Y EAR UNDER CONSIDERATION, SOLD SARDAR SAROVAR NARMADA NIGAM LTD BONDS AND CLA IMED THE CAPITAL GAIN OF RS.36,06,169/- ARISING THERE FROM AS EXEMPT U/S 10(36). THE AO NOTICED THAT THE EXEMPTION U/S 10(36) IS AVAILABLE ONLY FOR ELIGIBLE EQUITY ITA NO.1113/M/12 2 SHARES. WHEN IT WAS POINTED OUT THAT THE ASSESSEE ACCEPTED THE MISTAKE AND AGREED FOR THE ADDITION. THE AO INITIATED PENA LTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. THE ASSESSEE SUBMITTED THAT HE HAS NOT CONCEALED ANY PARTICULARS OF INCOME OR FURNISHED INACCURATE P ARTICULARS OF INCOME AND THE MISTAKE OCCURRED DUE TO UNDUE FAITH REPOSED ON THE ADVICE OF THE CONSULTANT. HOWEVER, THE SAID EXPLANATIONS WERE NO T CONVINCING TO THE ASSESSING OFFICER AND HENCE HE LEVIED A PENALTY OF RS.5,36,234/- U/S 271(1)(C) OF THE ACT. 3. BEFORE THE LD CIT(A), THE ASSESSEE SUBMITTED T HAT HE WAS GUIDED BY THE TAX CONSULTANT IN THIS REGARD, SINCE HE WAS NOT AWARE OF INTRICACIES OF LAW. HE FURTHER SUBMITTED THAT HE HAS NOT CONCEALE D ANY PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E. THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT RENDERED IN THE CASE OF RELIANCE PETROPRODUCTS LTD (322 ITR 158). THE LD CIT(A) WAS ALSO NOT SATISFIED WITH THE EXPLANATIONS OF THE ASSESSEE AND ACCORDINGLY CONFIRMED THE PENALTY. 4. THE ADMITTED FACTS ARE THAT THE ASSESSING OFF ICER HAS DULY DISCLOSED THE DETAILS OF CAPITAL GAIN ARISING ON SALE OF SARD AR SAROVAR NARMADA NIGAM LTD BONDS. THUS IT IS NOT A CASE OF CONCEALM ENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. THE MISTAKE COMMITTED BY THE ASSESSEE WAS THE CLAIM MADE U/S 10 (36) OF THE ACT, WHICH CLAIM WAS NOT SUSTAINABLE IN LAW. THE ASSESS EE HAS ALSO SUBMITTED THAT HE HAD TO DEPEND UPON HIS TAX CONSULTANT FOR P REPARATION OF RETURN OF INCOME. IN THE CASE OF RELIANCE PETRO PRODUCTS LTD (SUPRA), IT HAS BEEN HELD THAT THE CLAIM, WHICH WAS NOT SUSTAINABLE IN L AW, WILL NOT GIVE TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. AC CORDINGLY WE ARE OF THE VIEW THAT THE PENALTY LEVIED IN THIS CASE IS LIABLE TO BE DELETED. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) AN D DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. ITA NO.1113/M/12 3 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESS EE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 5TH JAN, 2015. )* % + , - 5TH JAN, 2015 * $ .& / SD SD ( . . /I.P. BANSAL ) ( . . ,/ B.R. BASKARAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER % & MUMBAI: 5TH JAN,2015. . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. % 2' ( ) / THE CIT(A)- CONCERNED 4. % 2' / CIT CONCERNED 5. 6. 34 . '5 , ( 5 , % & / DR, ITAT, MUMBAI CONCERNED . 6 7 & / GUARD FILE. 8 % / BY ORDER, TRUE COPY 9 ! (ASSTT. REGISTRAR) ( 5 , % & /ITAT, MUMBAI