SAJID DAYANADAN, MUMBAI V. ACIT CEN CIR 46, MUMBAI

ITA 2170/MUM/2010

• Counselvise Citation: 217019914 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 04-08-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 18-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: SANJAY R PARIKH
• Keywords: Search and seizure; Salary income; Cost of acquisition; Reasonable cause; Revised return; Bonafide mistake; TDS; Capital Gains
• Section: 271(1)(c); 80C; 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NOS. 2170 & 2171/MUM/2010 (ASSESSMENT YEARS: 2005-06 & 2007-08) SHRI SAJID DAYANANDAN ACIT, CENTRAL CIRCLE 46 3A/414, DHEERAJ VALLEY AAYAKAR BHAVAN, M.K. ROAD NR. SAI BABA COMPLEX, CIBA ROAD VS. MUMBAI 400020 GOREGAON (E), MUMBAI 400063 PAN - AABPD 0301 N APPELLANT RESPONDENT APPELLANT BY: SHRI SANJAY R. PARIKH RESPONDENT BY: SHRI A.K. NAYAK DATE OF HEARING: 04.08.2011 DATE OF PRONOUNCEMENT: 30.08.2011 O R D E R PER B. RAMAKOTAIAH, A.M. THESE TWO APPEALS ARE BY ASSESSEE FOR ASSESSMENT YE ARS 2005-06 AND 2007-08 AGAINST THE ORDERS OF THE A.O. LEVYING PENA LTY UNDER SECTION 271(1)(C) OF ` 81,345/- AND ` 65,844/- RESPECTIVELY WHICH WERE CONFIRMED BY THE CIT(A). 2. THERE WAS A SEARCH AND SEIZURE OPERATION CONDUCTED IN THE CASE OF COMMODITIES EXCHANGE GROUP ON 19.06.2007 AND SUBSEQ UENT DATES. ASSESSEE IS A MEMBER OF FINANCIAL TECHNOLOGIES INDI A LIMITED GROUP (FTIL) AND WAS COVERED IN THE SAID SEARCH. IN THE COURSE O F SEARCH PROCEEDINGS IT HAS COME TO THE KNOWLEDGE THAT ASSESSEE HAS RESIGNE D FROM FTIL AND JOINED STP DOMAIN TECHNOLOGIES P. LTD. HOWEVER, THE TRANSA CTIONS PERTAINING TO FTIL WERE ENQUIRED. IT WAS TRANSPIRED THAT ASSESSEE RECEIVED A SUM OF ` 6,00,000/- FROM MR. JIGNESH P. SHAH, MANAGING DIREC TOR OF THE COMPANY AND ` 5,00,000/- FROM M/S. SIGMA INVESTMENTS. WITH REFERE NCE TO THE SAID RECEIPTS IT WAS STATED THAT ASSESSEE HAS ISSUED BLA NK SHARE TRANSFER FORMS AND DELIVERED 72,252 SHARES HELD BY ASSESSEE IN THE SAID COMPANY IN FULL ITA NOS. 2170 & 2171/MUM/2010 SHRI SAJID DAYANANDAN 2 AND FINAL SETTLEMENT OF ALL DUES AND COUNTER DUES O F MR. JIGNESH SHAH. THE CAPITAL GAINS RELATING THE SAID TRANSACTIONS WERE N OT OFFERED BY ASSESSEE ORIGINALLY AND CONSEQUENT TO THE SEARCH ASSESSEE FI LED RETURN UNDER SECTION 153A WHEREIN THE SAID AMOUNT WAS OFFERED AS SALE PR OCEEDS AND AFTER SETTING OFF THE COST AN AMOUNT OF ` 7,25,000/- WAS DECLARED AS ADDITIONAL INCOME. THIS WAS ACCEPTED IN THE RETURN UNDER SECTION 153A AND PROCEEDINGS UNDER SECTION 271(1)(C) WERE INITIATED FOR A.Y. 2005-06 O N THIS AMOUNT. ALONGWITH THIS, ASSESSEE ALSO FILED RETURN FOR A.Y. 2007-08 I NITIALLY ADMITTING AN INCOME OF ` 2,06,630/-. SUBSEQUENTLY IT WAS NOTICED THAT ASSESS EE HAS NOT INCLUDED THE SALARY INCOME RECEIVED FROM STP DOMAIN TECHNOLO GIES P. LTD., AND THEREFORE, FILED REVISED RETURN ADMITTING THE SALAR Y INCOME. WHILE ACCEPTING THE REVISED RETURN FILED BY ASSESSEE THE A.O. INITI ATED PENALTY PROCEEDINGS FOR THAT ASSESSMENT YEAR BY LEVYING PENALTY ON THE DIFF ERENCE AMOUNT ADMITTED BY ASSESSEE IN THE REVISED RETURN. THE PENALTIES WE RE UPHELD BY THE CIT(A), THEREFORE ASSESSEE IS CONTESTING THE SAME. ITA NO. 2170/MUM/2010 : A.Y. 2005-06 3. AS BRIEFLY STATED THE ISSUE IS WITH REFERENCE TO OF FERING OF ADDITIONAL INCOME ON ACCOUNT OF CAPITAL GAINS AT ` 7,25,000/-. IT WAS THE EXPLANATION OF ASSESSEE THAT HE WAS FORCED TO RESIGN FROM FTIL DUE TO CERTAIN MISUNDERSTANDING AND CONFLICTING VIEWS WITH MR. JIG NESH SHAH. M/S. FTIL HAS NOT PAID THE DUES TOWARDS ARREARS OF SALARY ALO NGWITH RETIREMENT DUES EVEN AFTER PUTTING SUBSTANTIAL SERVICE WITH THE COM PANY. ASSESSEE HAS NOT RETURNED THE AMOUNT OF ` 10,00,000/- TAKEN BY HIM AND THE MATTER WAS SETTLED OUT OF COURT BY RECEIVING THE ABOVE SAID AM OUNT ON HANDING OVER OF 72252 SHARES. ASSESSEE HAS NOT DECLARED THE INCOME EARLIER AS HE WAS UNDER THE IMPRESSION THAT THE AMOUNTS WERE RECEIVED AS PA RT OF RETIREMENT BENEFITS, WHICH WERE NOT TAXABLE. HOWEVER, TO BUY P EACE AND TO AVOID PROLONGED LITIGATION ASSESSEE OFFERED THE CAPITAL G AIN ON TRANSFER OF THESE SHARES. THEREFORE, THERE WAS REASONABLE CAUSE IN NO T OFFERING THE AMOUNT. THE CIT(A) CONSIDERED THE SUBMISSIONS AND CONFIRMED THE PENALTY BY STATING AS UNDER: - ITA NOS. 2170 & 2171/MUM/2010 SHRI SAJID DAYANANDAN 3 3.4 I HAVE CAREFULLY CONSIDERED THE FACTS AND SUBM ISSIONS AND HAVE SEEN THE COMPUTATION OF INCOME AS PER RETURN I N RESPONSE TO NOTICE U/S. 153A. THE APPELLANT HAD SHOWN THE RECEI PT OF RS.11 LACS FROM MR. JIGNESH SHAH AS THE SALE PROCEEDS OF SHARE S AND AFTER TAKING THE COST OF ACQUISITION OF RS.3,75,000/-, RE MAINING RS.7,25,000/- WAS OFFERED AS LONG TERM CAPITAL GAIN . THUS, ON PERUSAL OF THE COMPUTATION OF INCOME, IT WAS CLEAR THAT THE APPELLANT HAD NOT DISCLOSED THE AFORESAID INCOME FROM CAPITAL GAIN IN HIS ORIGINAL RETURN. IT WAS ONLY SUBSEQUENT TO THE SEAR CH THAT THE AFORESAID INCOME WAS DETECTED AND WAS DECLARED IN T HE RETURN U/S. 153A. THEREFORE, THE AOS FINDING THAT THE APPELLAN T HAD FURNISHED INACCURATE PARTICULARS OF INCOME AND HAD CONCEALED INCOME TO THE EXTENT OF RS.7,25,000/- WAS FULLY JUSTIFIED. THE FA CT THAT THE APPELLANT HAD MADE THE SETTLEMENT WITH MR. SHAH AND THE SHARE S STOOD HANDED OVER WITH BLANK TRANSFER FORMS DULY SIGNED AMOUNTED TO CONSTRUCTIVE TRANSFER AND THE APPELLANT BECAME LIABLE TO CAPITAL GAIN DURING THE ASSESSMENT YEAR UNDER APPEAL. THUS THE LEVY OF PENA LTY WAS JUSTIFIED. ON CONSIDERATION OF ALL THE FACTS AND DE TAILS, I FIND MERIT IN THE ARS ALTERNATE CONTENTION THAT THE PENALTY LEVI ED U/S. 271(1)(C) IS REDUCED TO RS.81,345/- AS 100% OF TAX SOUGHT TO BE EVADED. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 4. THE LEARNED COUNSEL REITERATED THE SUBMISSIONS AND REFERRED TO THE STATEMENTS MADE BY THE ASSESSEE AT THE TIME OF SEAR CH AND IT WAS HIS SUBMISSION THAT ASSESSEE WAS UNDER THE BONAFIDE BEL IEF THAT THERE IS NO TRANSFER OF SHARES NOR ANY CAPITAL GAIN AND THE AMO UNT RECEIVED EARLIER ON VARIOUS DATES FROM THE COMPANY AND MR. JIGNESH SHAH ALSO INCLUDED AMOUNTS PAID TO MR. MR. SANTOSH GAIKWAD, DRIVER OF MR. JIGNESH SHAH. IT WAS FURTHER SUBMITTED THAT THE MARKET VALUE OF THE SHARE WAS TAKEN AT ` 13.50 PER SHARE AT THE TIME OF TRANSFER WHERE AS AS SESSEE HAS GIVEN BLANK TRANSFER FORMS AND DOES NOT KNOW WHEN THESE WERE TR ANSFERRED. 5. THE LEARNED D.R., HOWEVER, SUBMITTED THAT THE SHARE S WERE DEEMED TO HAVE BEEN TRANSFERRED AT THE TIME OF DELIVERY ITSEL F AND SINCE ASSESSEE HAS OFFERED THE CAPITAL GAIN ON REASON OF TRANSFER DURI NG THE YEAR, IT HAS TO BE CONSIDERED THAT THE SHARES WERE TRANSFERRED IN THE YEAR AND FURTHER FILED THE VALUE OF THE SHARES AS QUOTED IN THE STOCK MARKET O N THAT DATE BEING AROUND ` 74/- TO ` 76/- AND CONTESTED THAT THE PRICE OF ` 13.50 ADMITTED BY ASSESSEE IS ALSO NOT CORRECT. 6. WE HAVE CONSIDERED THE ISSUE AND EXAMINED THE CONTE NTIONS AND THE RECORD. IT IS NOT IN DOUBT THAT ASSESSEE WAS A DIRE CTOR OF THE SAID FTIL AND ITA NOS. 2170 & 2171/MUM/2010 SHRI SAJID DAYANANDAN 4 ACQUIRED 49223 SHARES FOR ` 3,75,000/- BEFORE 31 ST MARCH 2001. THOSE SHARES BECAME 72252 SHARES OF FACE VALUE OF ` 2/-EACH IN THE RATIO OF 1.46755 SHARES FOR EVERY ONE SHARE OF ` 10/- EACH AS ON 31 ST MARCH 2001. IT WAS SUBMITTED THAT ASSESSEE HAS OBTAINED LOANS FROM MR. JIGNESH SHAH AND SIGMA INVESTMENTS AS UNDER: - ` 1,00,000/- ON 15.04.2002 ` 5,00,000/- ON 08.10.2002 ` 5,00,000/- ON 23.10.2003 OUT OF THESE ` 1,00,000/- WAS STATED TO HAVE GIVEN TO MR. SANTOSH GAIKWAD, DRIVER OF MR. JIGNESH SHAH AND ASSESSEE RECEIVED AN AMOUNT OF ` 10,00,000/-. HOWEVER, ASSESSEE OFFERED AN AMOUNT OF ` 11,00,000/- AS SALE PRICE OF THE SAID SHARES GIVEN TO MR. JIGNESH SHAH AND REDUCED THE COST OF ACQUISITION OF ` 3,75,000/- AND OFFERED THE CAPITAL GAIN OF ` 7,25,000/-. EVEN THOUGH ASSESSEES EXPLANATION SEEMS PLAUSIBLE, ASSE SSEE HOWEVER HAD NOT JUSTIFIED THE CONTENTIONS BY PLACING NECESSARY EVID ENCES. IT MAY BE TRUE THAT ASSESSEE HAS RECEIVED VARIOUS SUMS IN THE COURSE OF EMPLOYMENT WITH THE SAID COMPANY. HOWEVER, AT THE TIME OF LEAVING THE C OMPANY HE HAS SETTLED THE MATTERS BY HANDING OVER THE SHARES TO THE MANAG ING DIRECTOR. ONCE THE PHYSICAL POSSESSION WAS HANDED OVER WITH BLANK TRAN SFER FORMS, AS FAR AS ASSESSEE IS CONCERNED THE TRANSACTION IS COMPLETE A S THE SHARES ARE MOVEABLE PROPERTY AND ASSESSEE HAS SINGED THE TRANS FER FORMS ALSO. EVEN IF THE SHARES ARE TRANSACTED ON THE STOCK EXCHANGE THE DATE OF PURCHASE AND DATE OF SALE ARE TAKEN AS THE DATE OF TRANSACTION, WITHOUT EXAMINING WHETHER THE SAID SHARES ARE TRANSFERRED OF NOT SUBSEQUENTLY . ASSESSEE SHOULD HAVE OFFERED CAPITAL GAINS ON TRANSFER OF SHARES AS HE H AD ISSUED THE BLANK SHARE TRANSFER FORMS ALONG WITH SHARES. IT WAS THE SUBMIS SION OF THE ASSESSEE THAT THE AMOUNT RECEIVED WERE TREATED AS RETIREMENT BENE FIT FOR THE PAST SERVICES BUT NO SUCH EVIDENCE WAS AVAILABLE ON RECORD OR THE SE FACTS WERE NOT STATED IN FORM NO. 16. SO THIS CONTENTION IS NOT SUPPORTED BY ANY EVIDENCE. THE ONLY FACT WAS THAT ASSESSEE ADMITTED THE SALE OF SH ARES AT ` 11,00,000/- AND OFFERED THE CAPITAL GAINS CONSEQUENT TO THE SEARCH PROCEEDINGS EVENTHOUGH IN THE ORIGINAL RETURN FILED ON 18.08.2005 HE DID N OT ADMIT THIS AMOUNT. ITA NOS. 2170 & 2171/MUM/2010 SHRI SAJID DAYANANDAN 5 THEREFORE, AS ASSESSEE HAS ALREADY FILED THE RETURN WITHOUT DISCLOSING THE CAPITAL GAINS AND THE CAPITAL GAINS WAS DISCLOSED C ONSEQUENT TO THE SEARCH IN THE PROCEEDINGS UNDER SECTION 153A, WE ARE OF TH E OPINION THAT THE A.O. IS JUSTIFIED IN LEVYING PENALTY UNDER SECTION 271(1)(C ). 7. THE LEARNED D.R., HOWEVER, SUBMITTED THAT THE SHARE PRICE ON THE DATE OF TRANSFER IS MORE THAN THE AMOUNT WHICH WAS OFFER ED BY ASSESSEE. THIS ASPECT HAS NOT BEEN EXAMINED BY THE A.O. AT THE TIM E OF SCRUTINY AND THE SALE CONSIDERATION WAS ACCEPTED AT ` 11,00,000/-. SINCE ASSESSEE HAS RECEIVED ONLY THAT MUCH AMOUNT THE CONTENTION OF TH E LEARNED D.R. IN THE COURSE OF ARGUMENT CANNOT BE ACCEPTED AS THIS IS BE YOND THE PURVIEW OF THE ISSUE UNDER CONSIDERATION. THE FACT IS THAT ASSESSE E OFFERED THE AMOUNT OF CAPITAL GAIN WHICH WAS NOT ORIGINALLY OFFERED AT TH E TIME OF FILING THE RETURN ON 18.08.2005. THEREFORE PROVISIONS OF SECTION 271( 1)(C) WERE CORRECTLY INVOKED AND THE A.O. IS JUSTIFIED IN LEVYING PENALT Y. THEREFORE, WE UPHOLD THE ORDER OF THE CIT(A) IN THIS REGARD. ASSESSEES APPE AL IS DISMISSED. ITA NO. 2171/MUM/2010: A.Y. 2007-08 8. AS BRIEFLY STATED EARLIER ASSESSEE FILED THE RETURN IN RESPONSE TO NOTICE UNDER SECTION 153A ADMITTING INCOME AT ` 2,06,630/- OF SALARY RECEIVED FROM I-FLEX SOLUTIONS LTD. ALONE. DURING THE YEAR UNDER CONSIDERATION ASSESSEE EARNED SALARY FROM TWO COMPANIES AND IN THE RETURN FILED ORIGINALLY ON 16.102008 ASSESSEE DECLARED TOTAL INCOME OF ` 2,06,630/- OFFERING ONLY SALARY FROM I-FLEX SOLUTIONS LTD. SUBSEQUENTLY IN THE COUR SE OF ASSESSMENT PROCEEDINGS ASSESSEE NOTICED THAT SALARY RECEIVED F ROM THE OTHER COMPANY WAS NOT INCLUDED. THEREFORE, ASSESSEE FILED REVISED RETURN ON 17-03-09 ADMITTING HIGHER INCOME AND THIS INCOME AT ` 3,92,970/- WAS ACCEPTED BY THE A.O. IN THE PROCEEDINGS COMPLETED UNDER SECTION 153A. HOWEVER, HE LEVIED PENALTY ON THE DIFFERENCE AMOUNT AT ` 1,31,688/- BEING 200% OF THE TAX SOUGHT TO BE EVADED. THE CIT(A), WHILE CONFIRMI NG THE PENALTY, REDUCED THE AMOUNT TO ` 65,844/-. IT WAS ASSESSEES CONTENTION THAT THE RET URN WAS FILED UNDER SECTION 153A AFTER THE SEARCH AND WHILE FILING THE RETURN THERE WAS A MISTAKE IN NOT INCLUDING THE SALARY RECEIVED FROM THE OTHER COMPANY ON WHICH TDS WAS DEDUCTED. WHEN THIS WAS NOTICED AS SESSEE FILED REVISED ITA NOS. 2170 & 2171/MUM/2010 SHRI SAJID DAYANANDAN 6 RETURN VOLUNTARILY WITHOUT ANY SHOW CAUSE NOTICE IS SUED BY THE A.O. SINCE THE ACT OF FILING REVISED RETURN WAS VOLUNTARY, IT WAS HIS SUBMISSION THAT IT DOES NOT CALL FOR LEVY OF PENALTY UNDER SECTION 271 (1)(C). THE CIT(A), HOWEVER, DID NOT AGREE. HE CONFIRMED THE PENALTY BY STATING AS UNDER: - 3.4 I HAVE CAREFULLY CONSIDERED THE FACTS AND SUBM ISSIONS AND DO NOT FIND MERIT IN THE ARS CONTENTIONS THAT IT WAS A CASE OF INADVERTENT MISTAKE. THE APPELLANT HAD SINGED THE R ETURN OF INCOME AND WHILE SIGNING HE HAD NOT SEEN THAT HIS SALARY F ROM STP DOMAIN TECHNOLOGIES LTD. REMAINED TO BE DECLARED IN THE RE TURN. THIS CANNOT BE TREATED AS AN INADVERTENT ERROR ON THE PART OF T HE APPELLANT AND THEREFORE CANNOT BE EXCUSED. THE FACT THAT FULL TAX ON THE SALARY WAS NOT DEDUCTED ALSO INDICATES THE MOTIVE FOR NOT DISC LOSING THE CORRECT INCOME IN THE RETURN. THEREFORE, THE AO WAS JUSTIFI ED TO LEVY PENALTY UNDER SECTION 271(1)(C) FOR CONCEALMENT OF INCOME O R FURNISHING INACCURATE PARTICULARS OF INCOME. HOWEVER, ALTERNAT IVE CONTENTION OF THE AR THAT PENALTY LEVIED AT 200% WAS EXCESSIVE DE SERVED TO BE CONSIDERED. ACCORDINGLY, THE PENALTY LEVIED AT RS.1 ,31,688/- @ 200% IS REDUCED TO RS.65,844/- @ 100%. THEREFORE, THIS G ROUND OF APPEAL IS PARTLY ALLOWED. 9. THE LEARNED COUNSEL SUBMITTED THAT ASSESSEE WAS WOR KING THE STP DOMAIN TECHNOLOGIES LTD. AT THE TIME OF SEARCH, THE FACT OF WHICH WAS STATED IN THE STATEMENT UNDER SECTION 132(4) BUT DUE TO MI STAKE OF AUDITOR ASSESSEE OFFERED ONLY TDS CERTIFICATE OF I-FLEX SOL UTIONS LTD. AND DID NOT INCLUDE SALARY FROM STP DOMAIN TECHNOLOGIES LTD WHI CH WAS ALSO COVERED BY TDS. THE LEARNED COUNSEL REFERRED TO THE ORIGINAL R ETURN FILED AND COMPUTATION OF INCOME TO SUBMIT THAT THERE WAS A TD S OF ` 20,143/- FROM THE SALARY RECEIVED FROM I-FLEX SOLUTIONS LTD. AND ASSESSEE DID NOT EVEN CLAIM THE FULL DEDUCTION UNDER SECTION 80C AVAILABL E AND ONLY AN AMOUNT OF ` 9,447/- WAS CLAIMED OFFERING THE INCOME AT ` 2,06,630/- AND CLAIMED REFUND. HE FURTHER REFERRED TO THE REVISED COMPUTAT ION OF INCOME WHEREIN ASSESSEE HAD CLAIMED/ OFFERED LOSS FROM SELF OCCUPI ED PROPERTY AT ` 67,333/- AND LOSS OF SHORT TERM CAPITAL GAINS OF ` 3,205/-, INCOME FROM DIVIDEND CLAIMED AS EXEMPT, INCOME FROM INTEREST AT ` 17,204/- AND ALSO A HIGHER CLAIM OF TDS AT ` 30,220/-. IT WAS HIS SUBMISSION THAT THIS WAS A BON AFIDE MISTAKE IN NOT OFFERING THE INCOMES INADVERTENTLY COMMITTED AND BEFORE THE A.O. COULD ISSUE ANY NOTICE ASSESSEE VOLUNTARILY FI LED THE REVISED RETURN, THEREFORE, PENALTY UNDER SECTION 271(1)(C) IS NOT W ARRANTED. ITA NOS. 2170 & 2171/MUM/2010 SHRI SAJID DAYANANDAN 7 10. THE LEARNED D.R., HOWEVER, SUBMITTED THAT THERE IS NO BONAFIDE REASON IN OFFERING ONLY ONE INCOME AND NOT FURNISHING THE OTHER INCOME WHEN ASSESSEE WAS WORKING WITH THE LATTER COMPANY. THERE FORE HE SUPPORTED THE ORDERS OF THE A.O. AND CIT(A) ON THIS ISSUE. 11. WE HAVE CONSIDERED THE FACTS AND EXAMINED THE CONTE NTIONS OF THE RIVAL PARTIES. THE RETURN FOR A.Y. 2007-08, WHICH W AS DUE IN JULY 2007 WAS NOT FILED BY ASSESSEE AND THE RETURN WAS FILED ONLY ON 16.10.2008. IN THAT ASSESSEE HAS OFFERED ONLY THE AMOUNT FROM I-FLEX SO LUTIONS LTD., WHICH WAS ALSO COVERED BY TDS AND CLAIMED REFUND. IN THE REVI SED RETURN FILED ASSESSEE OFFERED THE OTHER INCOME RECEIVED FROM STP DOMAIN T ECHNOLOGIES P. LTD. TOWARDS SALARY AND HIGHER TDS CLAIM WAS MADE. THIS INDICATES THAT BOTH THE RECEIPTS WERE COVERED BY TDS PROVISIONS AND TDS WAS IN FACT MADE AS PER PROVISIONS OF LAW. NOT ONLY THAT, AS SEEN FROM THE REVISED COMPUTATION FILED AND ACCEPTED BY THE A.O. ASSESSEE HAS CLAIMED LOSS FROM HOUSE PROPERTY INCOME AT ` 67,333/- AND LOSS FROM CAPITAL GAINS AT ` 3,205/- AND FURTHER OFFERED INCOME OF ` 17,204/- FROM INTEREST. THE DEDUCTION UNDER SECTION 80C WAS ALSO CLAIMED ON THE PAYMENT OF LIFE INSURANCE P REMIUM OF AN AMOUNT OF ` 1,00,000/- WHICH WAS ALSO ALLOWED TO THE ASSESSEE I N ADDITION TO THE PREMIUM UNDER SECTION 80D. CONSIDERING THESE FACTS, WE ARE OF THE OPINION THAT THERE WAS A BONAFIDE MISTAKE OCCURRED IN FILIN G THE RETURN IN RESPONSE TO NOTICE UNDER SECTION 153A. SINCE SALARY INCOME W AS ALSO COVERED BY TDS PROVISIONS, IT CANNOT BE STATED THAT ASSESSEE HAD D ELIBERATELY CONCEALED INCOME. IT SO HAPPENED THAT ASSESSEE DID NOT INCLUD E INCOME WHICH WAS COVERED BY TDS IN THE RETURN ORIGINALLY FILED. CONS IDERING THAT THE A.O. HIMSELF ALLOWED THE CLAIM OF LOSSES AND ACCEPTED TH E REVISED COMPUTATION AND HAS NOT BROUGHT ANYTHING ON RECORD TO SHOW THAT ASSESSEE HAS NOT FILED THE REVISED RETURN VOLUNTARILY IN THE PROCEEDINGS U NDER SECTION 1453A, WE ARE OF THE OPINION THAT THERE IS A REASONABLE CAUSE AND A BONAFIDE EXPLANATION IN NOT OFFERING THE INCOME AT THE TIME OF FILING RETURN IN RESPONSE OF NOTICE UNDER SECTION 153A. ON THE CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) ARE NOT WARRANTED AND, THEREFORE, WE CANCEL THE PENALTY LEV IED UNDER SECTION 271(1)(C). ASSESSEES GROUNDS ARE ALLOWED. APPEAL A LLOWED. ITA NOS. 2170 & 2171/MUM/2010 SHRI SAJID DAYANANDAN 8 12. IN THE RESULT, APPEAL IN ITA NO. 2170/MUM/2010 IS D ISMISSED AND APPEAL IN ITA NO. 2171/MUM/2010 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH AUGUST 2011. SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 30 TH AUGUST 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XXXVIII, MUMBAI 4. THE CIT CENTRAL-IV, MUMBAI CITY 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.