DDIT, New Delhi V. Sh. Ashok Kumar Agarwal, New Delhi

ITA 2640/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3639 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-06-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 01-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI KANT GUPTA SENIOR
• Keywords: Question of law; Bonafide mistake
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.2640/DEL./2014 (ASSESSMENT YEAR : 2006-07) DDIT, CIRCLE 1 (1), VS. SHRI ASHOK KUMAR AGARWAL, NEW DELHI. C-1/21, RAJASTHALI APARTMENT, PITAMPURA, DELHI 110 034. (PAN : ADFPA0654C) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIJAY JINDAL, CA REVENUE BY : SHRI RAVI KANT GUPTA, SENIOR DR DATE OF HEARING : 03.01.2018 DATE OF ORDER : 31.01.2018 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, DDIT, CIRCLE 1(1), NEW DELHI (HEREI NAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 05.06.2014 PASSE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-XXIX, NEW DELH I DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE IN COME-TAX ACT, 1961 (FOR SHORT THE ACT) QUA THE ASSESSMENT YEAR 2006-07 ON THE GROUND INTER ALIA THAT :- ITA NO.2640/DEL/2014 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND LAW, WHETHER LD. CIT (A) HAS ERRED IN DELETING THE PENALTY U/S 271(1)(C) OF RS.36,32,553/- WHICH WAS IMPOSED ON THE CONFIRMATION OF THE ADDITION OF RS.68,23,535/- ON ACCOUNT OF DENIAL OF BENEFIT U/S 10(38) IN RESPECT OF LTCG AND ADDITION OF RS.30,27,182/- ON ACCOUNT OF DISCREPANCIES IN VALUA TION OF CLOSING STOCK BY LD. CIT (A) AS WELL AS HONBLE ITAT. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICATION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF ASSESSMEN T COMPLETED U/S 143(3) OF THE ACT MAKING ADDITION OF RS.68,23,535/- ON ACCOUNT OF DISALLOWANCE CLAIMED U/S 10(38) OF THE ACT IN RESPE CT OF LONG TERM CAPITAL GAINS AND ADDITION OF RS.30,27,182/- O N ACCOUNT OF DISCREPANCIES OF VALUATION OF CLOSING STOCK, PENALT Y PROCEEDINGS WERE INITIATED U/S 271(1)(C) OF THE ACT. ON THE BA SIS OF FINDINGS OF THE AO/CIT (A) AFFIRMED BY ITAT THAT THE ASSESSEE H AD CONVERTED HIS PERSONAL INVESTMENT IN SHARES INTO STOCK-IN-TRA DE ON 01.04.2005, THUS NOT ENTITLED FOR BENEFIT OF SECTIO N 10(38), PROCEEDED TO HOLD THAT THE ASSESSEE HAS CONCEALED P ARTICULARS OF HIS INCOME BY FURNISHING INACCURATE PARTICULARS QUA ADD ITION OF RS.68,23,535/- WITHIN THE MEANING OF EXPLANATION 1 TO SECTION 271(1)(C) AND HAS ALSO CONCEALED THE PARTICULARS OF HIS INCOME BY FURNISHING INACCURATE PARTICULARS QUA ADDITION OF R S.30,27,182/- ON ITA NO.2640/DEL/2014 3 ACCOUNT OF DISCREPANCIES IN THE VALUATION OF CLOSIN G STOCK AND PROCEEDED TO LEVY THE PENALTY OF RS.36,32,553/-. 3. ASSESSEE CARRIED THE MATTER BY WAY OF FILING APP EAL BEFORE THE LD. CIT (A) WHO HAS DELETED THE PENALTY BY ALLO WING THE APPEAL OF THE ASSESSEE. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBUNAL BY CHALLENGING THE IMPUGNED ORD ER PASSED BY LD. CIT (A) . 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY, ADDITION MADE BY THE AO OF RS.68,2 3,535/- ON ACCOUNT OF DISALLOWANCE OF BENEFIT U/S 10(38) OF THE ACT IN RESPECT OF LONG TERM CAPITAL GAINS AND ADDITION OF RS.30,27,182/- ON ACCOUNT OF DISCREPANCIES IN THE VALUATION OF CLO SING STOCK BY THE AO HAS BEEN AFFIRMED BY LD. CIT (A) AS WELL AS THE TRIBUNAL. 6. IN THE BACKDROP OF THE AFORESAID FACTS AND CIRCU MSTANCES OF THE CASE, THE SOLE QUESTION ARISES FOR DETERMINATIO N IN THIS CASE IS :- AS TO WHETHER THE ASSESSEE HAS CONCEALED PARTICULA RS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME DURING ASSESSMENT PROCEEDINGS? ITA NO.2640/DEL/2014 4 7. SO FAR AS QUESTION OF CLAIMING BENEFIT U/S 10(38 ) OF THE ACT ON ACCOUNT OF LONG TERM CAPITAL GAINS TO THE TUNE O F RS.68,23,535/- IS CONCERNED, THE LD. AR FOR THE ASSESSEE CONTENDED THAT IT IS A CASE OF BONAFIDE MISTAKE HAVING TAX NEUTRAL EFFECT. WHE N UNDISPUTEDLY APPEAL AGAINST THE ORDER OF THE TRIBUNAL HAS BEEN A DMITTED BY THE HONBLE HIGH COURT TO DECIDE THE QUESTION OF LAW, T HE ISSUE IS DEBATABLE AND IN THESE CIRCUMSTANCES, DIFFERENT VIE WS ARE POSSIBLE AND PENALTY CANNOT BE LEVIED. 8. SO FAR AS QUESTION OF DISCREPANCY IN THE VALUATI ON OF THE STOCK IS CONCERNED, THE LD. AR FOR THE ASSESSEE SUB MITTED THAT IT WAS DUE TO CLERICAL MISTAKE IN EXCEL FORMULA FOR VA LUATION OF THE CLOSING STOCK. BUT AO OBSERVED THAT THE ASSESSEE H AS REVISED COMPUTATION TWICE DURING ASSESSMENT PROCEEDINGS WHE N MISTAKE WAS POINTED OUT THAT DESPITE THE FACT THAT ACCOUNTS OF THE ASSESSEE HAVE BEEN AUDITED U/S 44AB, THIS IS NOT A CASE OF B ONAFIDE MISTAKE. LD. CIT (A) HAS RIGHTLY HELD THAT EXPLANATION 1 TO SECTION 271(1)(C) IS NOT ATTRACTED IN THIS CASE AS THE ASSE SSEE HAS DULY EXPLAINED THE MISTAKE WHICH CAN BE A HUMAN ERROR. 9. HONBLE SUPREME COURT IN A CASE CITED AS RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 (S.C.) DECIDED THE IDENTICAL ISSUE ITA NO.2640/DEL/2014 5 IN FAVOUR OF THE ASSESSEE. OPERATIVE PART OF WHICH IS REPRODUCED FOR READY REFERENCE AS UNDER :- A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE I.T. ACT, 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF T HE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUS T HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME . THE MEANING OF THE WORD PARTICULARS USED IN SECTI ON 271(1)(C) WOULD EMBRACE THE DETAIL OF THE CLAIM MAD E. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND T O BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HEL D GUILTY OF FURNISHING INACCURATE PARTICULARS. IN OR DER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKIN G AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCUR ATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SU CH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILI TY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPL IED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRE CT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTIO N OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A ME RE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 10. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE AND FO LLOWING THE LAW LAID DOWN BY HONBLE SUPREME COURT IN RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA), IN CASE ANY CLAIM PUT FORTH BY THE ITA NO.2640/DEL/2014 6 ASSESSEE IS FOUND TO BE NOT ALLOWABLE, IT WOULD NOT AMOUNT TO CONCEALMENT OF INCOME RATHER IT IS A CASE OF INTERP RETATION OF THE PROVISIONS WHICH ISSUE IS OTHERWISE A DEBATABLE ONE AS OF NOW THE APPEAL HAVING BEEN ADMITTED IN THE HONBLE HIGH COU RT. SO, FINDING NO ILLEGALITY OR PERVERSITY IN THE FINDINGS RETURNED BY THE LD. CIT (A), PRESENT APPEAL FILED BY THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DAY OF JANUARY, 2018. SD/- SD/- (B.P. JAIN) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 31 ST DAY OF JANUARY, 2018 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXIX, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.