Dr. S.N. Ganguly, Kolkata V. ACIT, Circle-21, Kolkata, Kolkata

ITA 1900/KOL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4901 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 13-10-2014
• Court: TRIBUNAL
• Assessee Lawyers: K M ROY
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A, KO LKATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI M.BALAGANES H, AM] ITA NO.1900/KOL/2014 ASSESSMENT YEAR : 2006-07 DR.S.N.GANGULY -VERSUS- A.C.I.T., CIRCLE-21, KOLKATA KOLKATA (PAN:ACWPG8412E) ( APPELLANT ) (RESPONDENT) FOR THE APPELLANT : SHRI K.M.ROY, FCA FOR THE RESPONDENT : SHRI SALLONG YADEN, ADDL.CIT, SR.DR DATE OF HEARING : 04.05.2016. DATE OF PRONOUNCEMENT : 06.05.2016. ORDER PER SHRI M.BALAGANESH, AM 1. THIS APPEAL OF THE ASSESSEE ARISES OUT OF THE OR DER OF THE LEARNED CIT(A)- XXIV, KOLKATA IN APPEAL NO.1607/CIT(A)-XXIV/CIR.21/ 13-14/KOL DATED 07.08.2014 PASSED AGAINST THE ORDER OF PENALTY LEV IED BY THE LEARNED AO U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER, THE LEARNED AO IS JUSTIFIED IN LEVYING PENALTY U/S 271(1) (C) OF THE ACT IN THE SUM OF RS.7819/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSES SEE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME FOR A.Y.2006-07 ON 31.07.2006 DECLARING H IS TOTAL INCOME OF RS.6,25,590/-. IN THE SAID RETURN HE COMPUTED SHORT TERM CAPITAL G AIN OF RS.3,94,150/- AFTER SETTING OFF SHORT TERM CAPITAL LOSS OF RS.1,16,249/-. THE LD. A O OBSERVED THAT THE SHORT TERM CAPITAL LOSS HAD BEEN INCURRED BY THE ASSESSEE OUT OF SALE OF FRANKLIN INDIA OPP FUND WHICH WAS PURCHASED BY THE ASSESSEE ON 02.09.2005 F OR RS.5,00,000/- AND REDEEMED ON 19.10.2005 FOR RS. 3,83,751/-. IN THE INTERVENIN G PERIOD, THE ASSESSEE DERIVED DIVIDEND INCOME OF RS.77,399/- FROM THE SAID FUND. THE LD.AO APPLIED THE PROVISION ITA NO.1900/KOL/2014 DR.S.N.GANGULY A.Y.2006-07 2 OF SECTION 94(7) OF THE ACT AND HELD THAT THE LOSS TO THE EXTENT OF DIVIDEND INCOME SHOULD BE IGNORED WHILE COMPUTING THE SHORT TERM CA PITAL LOSS. SIMILARLY THE ASSESSEE CLAIMED DEDUCTION TOWARDS SECURITY TRANSACTION TAX (STT) OF RS.8,490/- WHILE COMPUTING THE SHORT TERM CAPITAL GAIN WHICH IS NOT ADMISSIBLE AS DEDUCTION FROM THE CAPITAL GAIN. THE LD. AO ACCORDINGLY ADDED A SUM OF RS.85,889/- (RS.77,399/- + RS.8,490/-) IN THE ASSESSMENT. 4. THE ASSESSEE DISCLOSED INTEREST FROM SAVING B ANK ACCOUNT, INTEREST FREE DEPOSITS, NSC ACCRUED INTEREST AND LIC PENSION TOTALING TO RS .98,755/- IN THE RETURN OF INCOME. THE LD. AO OBSERVED THAT THE ASSESSEE HAD ACTUALLY DERIVED SAVINGS BANK INTEREST OF RS.87,548/- AS AGAINST WHICH ASSESSEE HAD DISCLOSED ONLY RS.36,373/- IN HIS RETURN OF INCOME AND BROUGHT THE DIFFERENCE OF RS.51,175/- TO TAX. THESE ADDITIONS WERE ADMITTEDLY NOT AGITATED BY THE ASSESSEE IN APPELLAT E PROCEEDINGS. THE LD. AO PASSED AN ORDER LEVYING PENALTY U/S 271(1)(C) OF THE ACT IN R ESPECT OF THE AFORESAID ADDITIONS AND LEVIED PENALTY OF RS.7819/- AS BELOW :- ORDER U/S 271(1)(C) OF THE I.T.ACT, 1961 DURING THE A.Y. 2006-07, THE ASSESSEE UNDERSTATED S HORT TERM CAPITAL GAIN OF RS.85889/-. HE ALSO DID NOT DISCLOSE INTEREST INCOME OF RS.5117 5/-. PENALTY PROCEEDINGS U/S 271(1) WERE INITIATED. PENALTY @ 100% ON THE AMOUNT OF TAX SOUGHT TO BE EV ADED IS NOW IMPOSED. THE SAME IS WORKED OUT AS UNDER :- TOTAL INCLUDING CONCEALED INCOME 52748/- TAX EXCLUDING CONCEALED INCOME 44929/- EVADED TAX : 7819/- 5. ON FIRST APPEAL THE PENALTY WAS CONFIRMED BY T HE LD. CIT(A). AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD. AR ARGUED THAT THE ASSESSEE IS RETIR ED SCIENTIST AND IS AGED 68 YEARS AND IS NOT VERY MUCH CONVERSANT WITH THE PROVISIONS OF THE INCOME TAX ACT. ON KNOWING THE BONAFIDE ERROR COMMITTED BY HIM IN HIS RETURN OF IN COME BY WAY OF ERRONEOUS CLAIM OF SHORT TERM CAPITAL LOSS; ERRONEOUS CLAIM OF STT WHI LE COMPUTING SHORT TERM CAPITAL LOSS AND ERRONEOUS OMISSION TO OFFER SAVINGS BANK I NTEREST INCOME IN PART, CAME FORWARD TO ACCEPT THE SAME DURING THE COURSE OF ASS ESSMENT PROCEEDINGS AND PAID ITA NO.1900/KOL/2014 DR.S.N.GANGULY A.Y.2006-07 3 TAXES THEREON WITHOUT PREFERRING ANY FURTHER APPEAL . HE FURTHER ARGUED THAT THE LD. AO HAD NOT RECORDED HIS SATISFACTION IN THE ORDER LEVY ING PENALTY U/S 271(1)(C) OF THE ACT AS IT HAS BEEN PASSED IN A CRYPTIC MANNER. IN RESPO NSE TO THIS, THE LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. WE FIND FROM THE PENALTY ORDER THAT THE LD. AO HAD NOT RECORDED ANY SATISFACTION REGARDING THE CONTUMACIOUS CONDUCT OF THE ASSESSEE AND GOING BY THE AGE OF THE ASSESSEE AND FROM THE FIELD FROM WHICH THE A SSESSEE WAS ENGAGED, THE ARGUMENTS OF THE LD. AR THAT ASSESSEE WAS NOT CONVE RSANT WITH THE PROVISIONS OF THE INCOME TAX ACT IS VERY LOGICAL.. WE FIND FROM THE A BOVE AFORESAID FACTS THAT THE ASSESSEES CONDUCT IS NOT MALAFIDE TO EVADE PAYMENT OF TAX AND HENCE WE HAVE NO HESITATION IN DIRECTING THE AO TO DISALLOW THE PENA LTY OF RS.7819/- LEVIED U/S 271(1)(C) OF THE ACT. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 06.05.2016. SD/- SD/- [MAHAVIR SINGH] [M.BALAGANESH] JUDICIAL MEMBER ACCOUNTANT MEMBE R DATE: 06.05.2016. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . DR.S.N.GANGULY, FLAT NO.10, AH0BLOCK, DIGANTIKA SAL T LAKE, KOLKATA- 700091. 2 THE ACIT, CENTRAL-21, KOLKATA. 3 . .CIT(A)-XXIV, KOLKATA 4. CIT-IX, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES ITA NO.1900/KOL/2014 DR.S.N.GANGULY A.Y.2006-07 4