Maj. Gen. R.S. Batra, Chandigarh V. DCIT, Chandigarh

ITA 875/CHANDI/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9184 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 21-03-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 04-12-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: S K MUKHI
• Keywords: Bonafide belief

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MAHARISHTI PRASHAT KUMAR, ACCOUNTANT MEMBER ITA NOS. 875 TO 877/CHD/2015 ASSESSMENT YEARS: 2006-07 TO 2008-09 MAJ GEN R.S.BATRA, VS. THE DCIT, CENTRAL CIRCLE- 1, CHANDIGARH CHANDIGARH PAN NO. ACSPB8300Q (APPELLANT) (RESPONDENT) APPELLANT BY : SH. S.K.MUKHI RESPONDENT BY : SH. MANJIT SINGH DATE OF HEARING : 04.08.2016 DATE OF PRONOUNCEMENT : 12.08.2016 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEALS RELATING TO DIFFERENT ASSESSMEN T YEARS HAVE BEEN PREFERRED BY THE ASSESSEE AGITATING THE LEVY OF PEN ALTY U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. 2. SINCE THE FACTS AND ISSUES INVOLVED IN ALL THE A PPEALS ARE IDENTICAL, HENCE, THE SAME HAVE BEEN HEARD TOGETHER AND ARE BEING DIS POSED OFF BY THIS COMMON ORDER. FIRST, WE TAKE ITA NO. 875/CHD/2015 FOR ASSESSMENT YEAR 2006-07 AS THE LEAD CASE. 3. THE ASSESSING OFFICER IN THIS CASE LEVIED PENALT Y IN RELATION TO FOLLOWING ADDITIONS:- 2 A) RS. 12,50,000/- ON ACCOUNT OF DIFFERENCE IN SALE CO NSIDERATION AS PER MATERIAL AGREEMENT TO SELL REGISTERED DEED OF PLOT IN NOIDA. B) RS. 21,362/- ON ACCOUNT OF UNDISCLOSED SHORT TERM C APITAL GAIN. 4. DURING THE SEARCH ACTION AT THE PREMISES OF THE ASSESSEE, IT WAS FOUND THAT ASSESSEE HAD RECEIVED A TOTAL CONSIDERATION OF RS. 32.50 LAKHS FOR THE SALE OF HIS PLOT AT NOIDA WHEREAS THE ASSESSEE HAD SHOWN THE SA LE PRICE AS RS. 20 LAKHS WHILE OFFERING THE CAPITAL GAIN TAX IN THE RETURN O F INCOME. THE ASSESSEE THUS HAD UNDER ASSESSED CAPITAL GAINS IN THE RETURN OF I NCOME. DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE COULD NOT CON VINCE US AS TO WHY THE ASSESSEE OFFERED THE CAPITAL GAINS TAX SHOWING SALE CONSIDERATION AT RS. 20 LAKHS WHEREAS THE ASSESSEE IN FACT HAD RECEIVED SALE CONS IDERATION OF RS. 32.50 LAKHS. WE FIND THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME AND HAS ALSO CONCEALED HIS INCOME ON THIS ACCOUNT. THE ASSE SSING OFFICER THUS HAD RIGHTLY LEVIED THE PENALTY ON THIS ACCOUNT. WE CONF IRM THE ACTION OF THE LOWER AUTHORITIES IN LEVY OF PENALTY ON THIS ISSUE. 5. THE NEXT ISSUE ON WHICH PENALTY IS LEVIED IS ON ACCOUNT OF UNDISCLOSED SHORT TERM CAPITAL GAIN OF RS. 21,362/- WHICH HAS B EEN EXPLAINED BY THE LD. AR THAT THE ASSESSEE WAS UNDER BONAFIDE BELIEF THA T THE CAPITAL GAINS EARNED BY THE ASSESSEE ON PURCHASE & SALE OF SHARES WERE EXE MPT FROM TAX. THAT NOT OFFERING THE SHORT TERM CAPITAL GAIN WAS A BONAFIDE ERROR AND THAT THERE WAS NO INTENTION TO CONCEAL THE INCOME OR FURNISHING OF IN ACCURATE PARTICULARS OF INCOME. CONSIDERING THE ABOVE SUBMISSIONS OF THE AS SESSEE AND THE SMALLNESS OF THE AMOUNT OF SHORT TERM CAPITAL GAIN OF RS. 21,362 /-, WE ARE OF THE VIEW THAT ASSESSEE WOULD NOT HAVE CONCEALED THE SAID SMALL AM OUNT FOR THE PURPOSE OF EVASION OF TAX. WE, ACCORDINGLY DELETE THE PENALTY ON THE SECOND ISSUE FOR NON FURNISHING OF SHORT TERM CAPITAL GAIN. 3 6. NOW COMING TO THE ITA NO. 876/CHD/2015 FOR ASSESSMENT YEAR 2007-08, THE PENALTY IN THIS CASE HAS BEEN CONFIRMED BY THE LOWER AUTHORITIES ON ACCOUNT OF FOLLOWING ADDITIONS :- A) RS. 2,46,457/- ON ACCOUNT OF UNDISCLOSED SHORT TERM CAPITAL GAIN. B) RS. 16,000/- ON ACCOUNT OF DIFFERENCE BETWEEN INTE REST RECEIVED AND INTEREST SHOWN IN RETURN OF INCOME. 7. SO FAR AS THE ADDITION ON ACCOUNT OF NON-DISCLOS URE OF SHORT TERM CAPITAL GAIN IS CONCERNED, WE HAVE ALREADY ACCEPTED THE EXP LANATION OF THE ASSESSEE THAT ASSESSEE WAS UNDER BONAFIDE BELIEF THAT THE TAX WAS NOT LEVIABLE ON INCOME EARNED FORM SHORT TERM CAPITAL GAIN. IN VIEW OF OU R OBSERVATIONS MADE ABOVE WHILE DECIDING THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2006-07, WE DELETE THE PENALTY ON THIS ISSUE. 8. SO FAR AS THE SECOND ADDITION ON WHICH PENALTY H AS BEEN LEVIED, IS REGARDING THE DIFFERENCE ON ACCOUNT OF INTEREST REC EIVED AND INTEREST SHOWN IN THE RETURN OF INCOME. IT WAS FOUND DURING THE SEARC H ACTION THAT ASSESSEE IN FACT RECEIVED A TOTAL INTEREST OF RS. 1,06,000/- WHEREAS THE ASSESSEE, IN THE RETURN OF INCOME, HAD DECLARED ONLY AN AMOUNT OF RS. 90,000/ - AS INTEREST INCOME. THE LD. AR COULD NOT FURNISH ANY JUSTIFICATION ON THE P ART OF THE ASSESSEE REGARDING THE LESS INTEREST OFFERED IN THE RETURN OF INCOME T HAN THE ACTUAL AMOUNT OF INTEREST RECEIVED. WE, THEREFORE, FIND THAT IT IS A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME THEREBY CONCEALMEN T OF INCOME. THE PENALTY ON THIS ISSUE OF DIFFERENCE OF UNDISCLOSED INTEREST AMOUNT IS HEREBY CONFIRMED. 9. NOW COMING TO ITA NO. 877/CHD/2015 FOR ASSESSMENT YEAR 2008-09, THE PENALTY IN THIS CASE HAS BEEN CONFIRMED IN RELATION TO THE FOLLOWING ADDITIONS:- 4 A) RS. 16,000/- ON ACCOUNT OF DIFFERENCE BETWEEN IN TEREST RECEIVED AND INTEREST SHOWN IN RETURN OF INCOME. B) RS. 88,271/- ON ACCOUNT OF EXCESSIVE INTEREST C LAIMED ON HOUSING LOAN. 10. SO FAR AS THE FIRST ISSUE ON ACCOUNT OF DIFFERE NCE OF INTEREST RECEIVED AND SHOWN IN THE RETURN OF INCOME, AS WE HAVE ALREADY C ONFIRMED THE PENALTY IN THE ORDER WHILE ADJUDICATING THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2007- 08. WE, ACCORDINGLY CONFIRM THE PENALTY ON THIS ISS UE IN RELATION TO THIS YEAR ALSO. 11. THE SECOND ISSUE IS RELATING TO EXCESSIVE INTER EST CLAIMED ON HOUSING LOAN. THE ASSESSEE IN FACT PAID A TOTAL INTEREST OF RS. 6 1,729/- ON HOUSING LOAN BUT HE CLAIMED INTEREST OF RS. 1.50 LAKHS IN THE RETURN OF INCOME. THE LD. AR IN THIS RESPECT HAD EXPLAINED THAT ASSESSEE WAS UNDER BONA FIDE BELIEF THAT THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION OF INTEREST ON HOUS ING LOAN UP TO THE EXTENT OF RS. 1.5005 LAKHS AND NOT THE ACTUAL AMOUNT OF INTER EST INCURRED. WE DO NOT FIND ANY MERIT IN THE ABOVE CONTENTION OF THE LD. AR. TH E PENALTY ON THIS ISSUE LEVIED U/S 271(1)(C) OF THE ACT IS, THEREFORE, CON FIRMED. 12. IN THE RESULT, THE ASSESSEES APPEALS I.E ITA N O. 875/CHD/2015 AND 876/CHD/2015 ARE PARTLY ALLOWED WHEREAS ITA NO. 877 /CHD/2015 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.08.2016. SD/- SD/- (MAHARISHI PRASHANT KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12 TH AUGUST, 2016 RKK 5 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR