Naresh T. Wadhwani, Pune V. Deputy Commissioner of Income-tax, Circle - 8, Pune

ITA 722/PUN/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8271 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 19-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Assessee Lawyers: V L JAIN
• Keywords: Cost of acquisition; Bonafide mistake
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 722 /P U N/201 8 / ASSESSMENT YEAR : 20 1 1 - 1 2 SHRI NARESH T. WADHWANI, OFFICE NO.9, UMED BHAVAN, CANARA BANK, PIMPRI, PUNE 41101 8 . / APPELLANT PAN: AA BPW7203Q VS. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 8 , PUNE . / RESPONDENT / APPELLANT BY : SHRI V.L. JAIN / RESPONDENT BY : SHRI M.K. VERMA / DATE OF HEARING : 0 8 . 0 7 .201 9 / DATE OF PRONOUNCEMENT: 17 . 0 7 .201 9 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) - 6 , PUNE , DATED 09 . 0 2 .201 8 RELATING TO ASSESSMENT YEAR 20 1 1 - 1 2 AGAINST PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE AC T) . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE JURISDICTION TO LEVY PENALTY WHEN THE NOTICE U/S 274 DID NOT SPECIFY THE CHARGE FOR LEVY OF PENALTY OF RS.1,19,581/ - U/ S 271(1)(C) OF THE ACT. ITA NO. 722 /P U N/20 1 8 NARESH T. WADHWANI 2 2. THE LEARNED CIT(A) HAS FURTHER ERRED IN LAW AND ON FACTS IN CONFIRMING A PENALTY ON RS.1,19,581/ - U/S 271(1)(C) OF THE ACT FOR AN ADDITION ON ACCOUNT OF A COMPUTATIONAL ERROR IN INDEXATION OF CAPITAL GAINS. 3. THE GROUND OF AP PEAL NO.1 RAISED BY ASSESSEE IS NOT PRESSED AND HENCE THE SAME IS DISMISSED AS NOT PRESSED. 4. THE ISSUE RAISED IN GROUND OF APPEAL NO.2 IS AGAINST PENALTY LEVIED ON ADDITION OF 1,19,581/ - . 5. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD DECLARE D INCOME FROM CAPITAL GAINS BUT HAD WRONGLY ADOPTED THE INDEXED COST OF ACQUISITION FOR FINANCIAL YEAR 2006 - 07 INSTEAD OF APPLYING INDEXED COST FOR ASSESSMENT YEAR 2010 - 11. CONSEQUENTLY, SUM OF 85 LAKHS WAS DISALLOWED AND ADDED TO THE INCOME OF ASSESSEE . THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS FOR FURNISHING INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF 85 LAKHS . THE ASSESSEE WAS HELD TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME AND PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS LEVIED. 6. THE CIT(A) HAS RESTRICTED SAID PENALTY TO ADDITION OF 1,19,581/ - IN TURN, RELYING ON THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ZOOM COMMUNICATION REPORTED IN 327 ITR 510 (DEL). 7. THE ASSESSEE IS IN APPEAL A GAINST THE ORDER OF CIT(A). 8. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT THERE IS NO MERIT IN THE AFORESAID LEVY OF PENALTY AS MISTAKE HAD OCCURRED IN APPLYING THE CORRECT INDEXED RATE. THERE IS MERIT IN THE PLEA OF ASSESSEE ES PECIALLY WHERE THE LEVY OF PENALTY WAS RESTRICTED TO ADDITION OF 1,19,581/ - . ITA NO. 722 /P U N/20 1 8 NARESH T. WADHWANI 3 THE ASSESSEE HAD UNDER A BONAFIDE MISTAKE NOT COMPUTED THE CORRECT INDEXED COST OF ACQUISITION. HENCE, WE HOLD THAT IT IS NOT FIT CASE FOR LEVY OF PENALTY AND THE SAME IS THUS , DIRECTED TO BE DELETED. THE GROUND OF APPEAL NO.2 RAISED BY ASSESSEE IS THUS, ALLOWED. 9 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . ORDER PRONOUNCED ON THIS 17 TH DAY OF JU LY , 201 9 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 17 TH JULY , 201 9 . GCVSR / COPY OF TH E ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 6 , PUNE ; 4. THE PR. CIT - 5 , PUNE ; 5. 6. , , / DR B , ITAT, PUNE ; / GUAR D FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE