Swami Vivekanand Educational Society, Yamunanagar V. DCIT, Yamunanagar

ITA 876/CHANDI/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8950 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 15-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Assessment record
• Section: 143(3); 12A; 148; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.876/CHD/2014 (ASSESSMENT YEAR : 2005-06) SWAMI VIVEKANAND EDUCATIONAL VS. THE D.C.I.T., SOCIETY, SECTOR 17, JAGADHRI. CIRCLE YAMUNA NAGAR, YAMUNA NAGAR, AAYAKAR BHAWAN, HARYANA. SECTOR 17, HUDA, NEAR RED CROSS BHAWAN YAMUNA NAGAR, HARYANA. PAN: AAAJV0306N (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI RUCHESH SINHA & MAHESH KUMAR RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 09.08.2016 DATE OF PRONOUNCEMENT : 21.11.2016 O R D E R PER ANNAPURNA GUPTA, A.M . : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), PANCHKULA DATED 11.8.2014 FOR ASSESSMENT YEAR 2005-06, CONFIRMING THE LEVY OF PENALTY UNDER SECTI ON 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT TH E ACT). 2 2. AT THE OUTSET, IT MAY BE STATED THAT THE INSTAN T APPEAL HAD BEEN DISMISSED IN LIMINE FOR NON-APPEARA NCE VIDE ORDER OF THE TRIBUNAL DATED 15.6.2015 AND WAS LATER RECALLED IN PURSUANCE TO A MISCELLANEOUS APPLICATIO N FILED BY THE ASSESSEE VIDE ORDER IN M.A.NO.80/CHD/2015 DA TED 11.12.2015. IN PURSUANCE TO THE SAME, THE PRESENT APPEAL WAS FIXED BEFORE US AND WAS HEARD BY US. 3. BRIEF FACTS RELATING TO THE CASE ARE THAT THE ASSESSEE IS AN EDUCATIONAL INSTITUTION REGISTERED U NDER SECTION 12A OF THE ACT. ORIGINALLY, ASSESSMENT OF THE ASSESSEE WAS COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 28.12.2007 AT NIL INCOME. LATER O N, THE CASE WAS REOPENED UNDER SECTION 148 OF THE ACT FOR THE REASON THAT THE ASSESSEE HAD TRANSFERRED LAND AND O THER ASSETS WORTH RS.1,05,82,364/- TO OTHER SOCIETIES WH ICH DID NOT AMOUNT TO APPLICATION OF INCOME AND AFTER EXCLU DING THE SAME THE APPLICATION OF INCOME TOWARDS CHARITAB LE PURPOSE CAME TO LESS THAN 85% OF THE RECEIPTS AND H ENCE THE INCOME OF THE ASSESSEE TRUST WAS LIABLE TO BE B ROUGHT TO TAX. DURING ASSESSMENT PROCEEDINGS, THE ASSESSE E ARGUED THAT IT HAD APPLIED MORE THAN 85% OF ITS INC OME AND THE ASSETS WERE TRANSFERRED FROM OLD ASSETS AND NOT FROM ASSETS ACQUIRED DURING THE YEAR. THE ASSESSEE FURTHER ARGUED THAT THE ASSETS HAD NOT BEEN TRANSFE RRED FOR A CONSIDERATION BUT WERE GIVEN BY WAY OF DONATI ON TO TWO OTHER SOCIETIES AND, THEREFORE, NO QUESTION O F CAPITAL 3 GAIN AROSE AS NO PRICE WAS CHARGED FOR THAT. THE ASSESSING OFFICER REJECTED THE CONTENTION OF THE AS SESSEE AND HELD THAT THE ASSETS HAD BEEN TRANSFERRED AT BO OK VALUE OF RS.1,05,82,364/- AND SINCE THE ENTIRE COST HAD BEEN ALLOWED AS APPLICATION OF INCOME IN THE YEAR O F ACQUISITION ITSELF, THE WRITTEN DOWN VALUE OF THE A SSETS WORKED OUT TO NIL. THUS THE ASSESSING OFFICER HELD THE ENTIRE SALE CONSIDERATION TO BE CAPITAL GAIN CHARGE ABLE TO TAX UNDER SECTION 11(1A) OF THE ACT AND AFTER ALLOW ING BENEFIT OF THE COST OF NEW ASSETS ACQUIRED AS REDUC TION OF THE CAPITAL GAINS, THE ASSESSING OFFICER MADE AN AD DITION OF RS.79,60,191/- TO THE INCOME OF THE ASSESSEE. T HE LEARNED CIT (APPEALS) CONFIRMED THE ADDITION BY TRE ATING THE TRANSFER OF ASSETS AS CAPITAL GAIN VIDE HIS ORD ER DATED 31.12.2009. AGAINST THE SAME, THE ASSESSEE WENT IN APPEAL BEFORE THE I.T.A.T., WHO VIDE THEIR ORDER DA TED 6.1.2012 IN ITA NO.1046/CHD/2010 UPHELD THE ORDER O F THE CIT (APPEALS). DURING THE PENALTY PROCEEDINGS, THE ASSESSEE FILED REPLY WHICH WAS NOT ACCEPTED BY THE ASSESSING OFFICER WHO HELD THAT THE ASSESSEE HAVING NOT SHOWN THE INCOME ON ACCOUNT OF CAPITAL GAIN HAD CONCEALED THE INCOME TO SUCH EXTENT AND, THEREFORE, LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT OF RS.25,88,518/- ON THE SAME. 4. THE MATTER WAS CARRIED IN APPEAL BEFORE THE CIT (APPEALS), WHERE THE ASSESSEE CONTENDED THAT NO CAPITAL 4 GAIN HAD ARISEN TO THE ASSESSEE AT ALL SINCE THE AS SETS HAD BEEN TRANSFERRED AS DONATION TO OTHER SOCIETIES AND NO CONSIDERATION HAD EXCHANGED HANDS ON ACCOUNT OF THE SAME. THE ASSESSEE REFERRED TO THE RESOLUTION OF TH E ASSESSEE SOCIETY AUTHORIZING THE TRANSFER OF ASSETS FOR NO CONSIDERATION. THE ASSESSEE ALSO POINTED OUT TO TH E ACCOUNTING ENTRIES MADE BY IT IN ITS BOOKS OF ACCOU NT WHEREBY THE WRITTEN DOWN VALUE OF THE ASSETS TRANSF ERRED IN THE BOOKS OF THE ASSESSEE WAS REDUCED FROM THE C ORPUS FUND OF THE ASSESSEE SOCIETY. THUS THE ASSESSEE ST ATED THAT IT WAS CLEAR, BY VIRTUE OF THIS ENTRY, THAT TH E ASSESSEE HAD RECEIVED NO CONSIDERATION FOR THE TRANSFER MADE . THE ASSESSEE ALSO POINTED OUT THAT THE FACT THAT NO AMO UNT DUE ON ACCOUNT OF CONSIDERATION FOR THE TRANSFER MA DE WAS SHOWN AS DEBTORS IN THE BOOKS OF THE SOCIETY ALSO L ENT CREDENCE TO ITS CONTENTION THAT THE ASSETS WERE TRA NSFERRED FOR NO CONSIDERATION. FURTHER, THE ASSESSEE POINTE D OUT THAT IT HAD NOT CONCEALED ANY PARTICULARS OF INCOME AND NOT FURNISHED ANY INACCURATE PARTICULARS OF INCOME. THE ASSESSEE PLEADED THAT MERELY BY MAKING THE CLAIM WH ICH WAS NOT ACCEPTED BY THE REVENUE, DID NOT ATTRACT TH E LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. MOR EOVER, THE ASSESSEE ARGUED THAT IT HAD OFFERED A SATISF ACTORY EXPLANATION OF THE TREATMENT GIVEN BY IT AND, THER EFORE, BY VIRTUE OF THE EXPLANATION TO SECTION 271(1)(C) O F THE ACT ALSO NO PENALTY IS LIABLE TO IT. THE LEARNED CIT (APPEALS) 5 AFTER CONSIDERING ASSESSEES ARGUMENTS HELD THAT IN VIEW OF THE FACT THAT THE ARGUMENTS OF THE ASSESSEE HAVE BEEN DISMISSED BOTH BY THE CIT (APPEALS) AND THE I.T.A. T., THE ASSESSEE HAS NO CASE ON MERITS AND ITS CONTENTION T HAT NO CAPITAL GAIN HAD ACCRUED TO IT COULD NOT BE GIVEN A NY COGNIZANCE. FURTHER THE LEARNED CIT (APPEALS) HELD THAT THE ASSESSEE BY NOT DISCLOSING CAPITAL GAIN EARNED BY IT ON THE TRANSFER OF THE IMPUGNED ASSETS IN THE RETURN O F INCOME FILED IN FORM NO.2D, THE DECISION OF THE APE X COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCT S (2010) 322 ITR 158(SC) SQUARELY APPLIED TO THE ASSE SSEES CASE AND THE ASSESSEE WAS GUILTY OF NOT DISCLOSING PARTICULARS OF INCOME. THE LEARNED CIT (APPEALS) F URTHER HELD THAT SINCE THE ASSESSEE HAD FAILED TO SUBSTANT IATE THE EXPLANATION OFFERED BY IT AND TO PROVE THAT ITS EXP LANATION WAS BONAFIDE, THE EXPLANATION-1(B) TO SECTION 271(1 ) WAS ATTRACTED. THUS, THE LEARNED CIT (APPEALS) UPHELD THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 5. AGGRIEVED BY THE SAME, THE ASSESSEE FILED THE PRESENT APPEAL BEFORE US. 6. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE ARGUMENTS MADE BEFORE THE LEAR NED CIT (APPEALS) AND STATED THAT FIRSTLY ON MERITS THE ADD ITION MADE WAS INCORRECT AND THE FACT THAT IT HAD BEEN UP HELD BY THE I.T.A.T. DID NOT MERIT DUE CONSIDERATION SIN CE THE 6 ORDER PASSED BY THE I.T.A.T. WAS EX-PARTE IN THE AB SENCE OF ANY ARGUMENTS MADE BY THE LEARNED COUNSEL FOR TH E ASSESSEE ON THIS BEHALF. THE LEARNED COUNSEL FOR T HE ASSESSEE THEREAFTER STATED THAT EVEN ON MERITS, IT HAD NOT CONCEALED/FURNISHED ANY INACCURATE PARTICULARS OF INCOME SINCE, IT HAD EARNED NO CAPITAL GAINS BY VIRTUE OF THE TRANSFER OF THE IMPUGNED ASSETS AS THE ASSETS WERE IN FACT DONATED TO TWO SOCIETIES FOR NO CONSIDERATION AT AL L. THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT RESOLU TION PASSED BY THE ASSESSEE SOCIETY IN THIS REGARD CATEG ORICALLY STATING THE TRANSFER OF THE ASSETS BY WAY OF DONATI ON, THE REDUCTION OF THE WRITTEN DOWN VALUE OF THESE ASSETS FROM THE CORPUS FUND OF THE ASSESSEE SOCIETY AND THE FAC T THAT NEITHER ANY AMOUNT WAS RECEIVED BY THE ASSESSEE SOC IETY ON ACCOUNT OF THESE TRANSFERS, NOR WAS SHOWN AS RECEIVABLE IN THE BOOKS OF THE ASSESSEE BY WAY OF REFLECTING THE SOCIETIES TO WHOM ASSETS HAD BEEN TRANSFERRED AS DEBTORS, PROVES THE FACT THAT THE AS SETS HAD BEEN TRANSFERRED FOR NO CONSIDERATION AT ALL. THE LEARNED COUNSEL FOR THE ASSESSEE THEREAFTER STATED THAT THO UGH THE FINDINGS IN QUANTUM PROCEEDINGS HAVE WEIGHTAGE BUT THE PENALTY PROCEEDINGS BEING SEPARATE THE ASSESSEE CAN MAKE OUT ITS CASE IN PENALTY PROCEEDINGS ALSO. TH E LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THE FINDINGS I N QUANTUM PROCEEDINGS AND ADDITION MADE THEREIN DID N OT AUTOMATICALLY LEAD TO THE LEVY OF PENALTY. T HE LEARNED 7 COUNSEL FOR THE ASSESSEE RELIED UPON A NUMBER OF CA SE LAWS IN SUPPORT OF ITS CONTENTION. THEREAFTER, THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT IN ANY CASE, T HE ASSESSEE HAD NOT CONCEALED ANY PARTICULARS OF INCOM E HAVING REFLECTED THE TRANSFER OF ASSETS IN ITS BALA NCE SHEET FILED ALONGWITH RETURN OF INCOME. THE LEARNED COUN SEL FOR THE ASSESSEE FURTHER STATED THAT IT WAS MERELY A CA SE OF CLAIM OF THE ASSESSEE NOT BEING ACCEPTED BY THE REV ENUE WHICH AS HELD IN A NUMBER OF DECISIONS, DOES NOT AUTOMATICALLY LEAD TO LEVY OF PENALTY. 7. THE LEARNED D.R., ON THE OTHER HAND, RELIED UPO N THE ORDER OF THE LEARNED CIT (APPEALS). 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AS ALSO DOCUMEN TS PRODUCED BEFORE US. WE FIND NO JUSTIFICATION IN U PHOLDING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN THE PRESENT CASE, SINCE THE BASIC CONDITION FOR THE LEVY OF PENALTY UNDER SECTION 271(1)(C), WHICH IS CONCEALME NT OF PARTICULARS (EMPHASIS SUPPLIED BY US) OF INCOME, IS NOT FULFILLED IN THE PRESENT CASE. PENALTY IN THE PRES ENT CASE, WE FIND HAS BEEN LEVIED FOR CONCEALING INCOME BEING CAPITAL GAINS EARNED ON TRANSFER OF FIXED ASSETS, T O THE TUNE OF RS.1,05,82,364/-. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT SINCE THE MANAGEMENTS OF VA RIOUS SCHOOLS RUN BY THE ASSESSEE SOCIETY HAD BECOME 8 BURDENSOME, IT WAS RESOLVED, VIDE RESOLUTION DATED 29.1.2005 TO TRANSFER CERTAIN SCHOOLS AND LAND TO T WO NEW SOCIETIES FORMED FOR THIS PURPOSE I.E. SWAMI VIVEKA NAND PARAMHANS EDUCATION SOCIETY AND SWAMI VIVEKANAND MOTHER SHARDA EDUCATION SOCIETY. THE LEARNED COUNS EL FOR THE ASSESSEE CONTENDED THAT OUT OF THE ASSETS R ESOLVED TO BE TRANSFERRED, CERTAIN ASSETS WERE TRANSFERRED DURING THE YEAR AMOUNTING TO RS.1,05,82,364/- WHICH WAS REFLECTED IN THE FIXED ASSETS CHART PLACED AT SCHED ULE-D TO THE BALANCE SHEET AND DEBITED TO THE CORPUS FUND OF THE SOCIETY. THE ASSETS PENDING TRANSFER AMOUNTING TO RS.2,58,07,834/- WERE CREDITED TO THE RESPECTIVE SO CIETY ACCOUNT AS FOLLOWS : SWAMI VIVEKANAND PARAMHANS ED. SOCIETY RS.1,30,32 ,062 SWAMI VIVEKANND MOTHER SHARDA ED. SOCIETY RS.1,27, 75,772 RS.2,58,07,834 9. LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THIS AMOUNT WAS REFLECTED IN SCHEDULE-C OF SUNDRY CREDITORS TO THE BALANCE SHEET. THE CORRESPONDING AMOUNT WAS DEBITED TO THE CORPUS FUND OF THE ASSESS EE SOCIETY AND REDUCED THEREFROM. THE LEARNED COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE RECONCILIATI ON OF THE CORPUS FUND AS FOLLOWS. CORPUS FUND (31-3-2004) RS.60999171 LESS ASSETS TRANSFERRED (OUT OF RS.10582364.03) 5782368 LESS ASSETS TO BE TRANSFERRED (SHOWN AS SUNDRY CREDITORS) RS.25807834 RS.31590202 ____________ _____________ CORPUS FUND (AS ON 1-4-2004) RS.29408969 --------------- 9 10. IT IS PLAIN AND CLEAR FROM THE ABOVE THAT ALL PARTICULARS RELATING TO THE TRANSFER OF THE IMPUGNE D ASSETS WERE DISCLOSED IN THE BALANCE SHEET OF THE ASSESSEE SOCIETY FILED ALONGWITH THE RETURN OF INCOME. THER E APPEARS TO BE NO DISPUTE ABOUT THIS FACT ALSO SINCE WE FIND THAT EVEN THE ASSESSING OFFICER HAS ADMITTED TO THE SAME AT PAGE 3 OF ITS ORDER AS FOLLOWS : THE SUBMISSIONS OF THE ASSESSEE ARE CONSIDERED AND NOT FOUND LOGICAL IN VIEW OF THE FACT THAT ASSESSEE HAS NOT BRO UGHT ANYTHING NEW EXCEPT SUBMITTING THE SUBMISSIONS WHIC H HAD ALREADY BEEN PUTFORTH BY IT DURING THE COURSE O F ASSESSMENT PROCEEDINGS. AS REGARDS ASSESSEES SUBMISSIONS THAT NO SALES CONSIDERATION RECEIVED IN LIEU OF TRANSFER OF FIXED ASSETS ARE NOT ACCEPTABLE AS IN TH E SCHEDULE OF FIXED ASSETS THE ASSESSEE HAS CLEARLY SHOWN TRANS FER/SALE OF FIXED ASSETS TO THE TUNE OF RS.1,05,82,364/-. ON ACCOUNT OF SUCH TRANSFER/SALE VALUE OF FIXED ASSETS AS ON 31.03. 2005 HAS BEEN REDUCED TO RS.4,98,13,832/- WHICH HAS BEEN SHOWN IN THE ASSETS SIDE OF THE BALANCE SHEET. THE AS SESSEE HAS ALSO MADE .CORRESPONDING DEBITS AND EFFECT TO WHI CH HAS BEEN GIVEN ON LIABILITIES SIDE IN THE BALANCE SHEET, WHICH IS CLEAR FROM THE SCHEDULE 'C' TO THE BALANCE SHEET IN W HICH THE TWO SOCIETIES TO WHOM THE ASSETS HAVE BEEN TRANSFER RED ARE SHOWN AS CREDITORS OF RS.2,58,07,834/-. THE SALE CONSIDERATION HAS BEEN REDUCED FROM THE CREDIT BALA NCE AND THUS HAS BEEN RECEIVED BY THE APPELLANT THROUGH BOOK ENTRIES. THIS FINDINGS HAVE ALSO BEEN CONFIRMED BY THE LD. CI T(A) IN HIS ORDER VIDE PARA '5.1' AND SUBSEQUENTLY BY THE LD , I.T.A.T. THEREFORE, THE ASSESSEE'S PLEA THAT NO CONSIDERATIO N HAS BEEN RECEIVED OR ANY ADJUSTMENT BY BOOK ENTRIES WERE MA DE FOR CONSIDERATION IS NOT TENABLE. 10 11. THE LD. CIT (APPEALS) HAS ALSO NOT CONTROVERTE D THIS FACT BUT HAS ONLY STATED AT PARA 8.1 OF ITS OR DER THAT: 8.1 DURING THE APPELLATE PROCEEDINGS AGAINST THE P ENALTY ORDER THE APPELLANT SUBMISSION BACKED BY JUDICIAL PRONOUNCEME NTS MAINLY LIES ON PENALTY IS NOT LEVIABLE ON DONATION OF ASSETS TO OT HER SOCIETIES LAND FURTHER SUBMISSION THAT THE ASSESSEE HAS NOT SUPPLI ED ANY INACCURATE PARTICULARS IN THE RETURN FILED. AFTER CONSIDERING THE FACTS OF THE CASE AND APPELLANT SUBMISSIONS IT IS FOUND T HAT THE CLAIM MADE BY THE ASSESSEE ON ACCOUNT OF DONATION ASSETS WA S FOUND TO BE TRANSFER OF ASSETS .THUS, THE ASSESSEE BY MAKING NON-GENUINE CLAIM I N THE RETURN AHS FURNISHED THE PARTICULARS WHICH LED TO REDUCTION IN THE TAX LIABILITY. ON PERUSAL OF ASSESSMENT RECORD AND ORIG INAL RETURN FILED BY THE APPELLANT, IT IS NOTED THAT THE RETURN WAS FIL ED IN FORM NO.2D (SARAL) SHOWING NIL INCOME. THIS FORM IS MEANT FOR FILING OF RETURN BY NON-CORPORATE ASSESSEES OTHER THAN PERSONS CLAIMIN G EXEMPTION U/S 11 OF THE ACT BUT THE STATEMENT OF INCOME ANNEXED W ITH THE RETURN SHOWS THE CLAIM OF EXEMPTION U/S 11/12A AMOUNTING TO RS.65,40,165/-. THE SCHEDULE D TO THE BALANCE SHEE T ANNEXED WITH THE RETURN SHOWING THE DETAILS OF FIXED ASSETS NOW HERE INDICATES THAT THERE WERE TRANSFERS OF ASSETS TO ANY OTHER SOCIETY . SO, THE FACTS REGARDING THE TRANSFER OF ASSETS TO OTHER SOCIETIES WERE NOT AVAILABLE IN THE RETURN OF INCOME FILED BY THE APPELLANT. 12. IT IS CLEAR FROM THE ABOVE THAT LD. CIT (APPEA LS) HELD THAT TRANSFER OF ASSET TO ANY OTHER SOCIETY WAS NOT REFLECTED IN THE FIXED ASSETS SCHEDULE. WE MAY ADD THAT FIXED ASSETS CHART ONLY DISCLOSE MOVEMENT IN FIXED ASSETS AND NOT TO WHOM THEY ARE TRANSFERRED OR FROM WHOM T HEY ARE ACQUIRED. THEREFORE, WE HOLD THAT THE OBSERVAT ION OF THE LD. CIT (APPEALS) MERITS NO CONSIDERATION. CLEA RLY, THEREFORE, DETAILS OF THE TRANSACTION LEADING TO TH E ALLEGED EARNING OF CAPITAL GAIN WERE DULY DISCLOSED IN THE RETURN OF INCOME FIELD BY THE ASSESSEE. THE HON'BLE APEX COURT 11 IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC) HAS HELD THAT THE MEANING O F THE WORD PARTICULAR USED IN SECTION 271(1)(C) IS DETA IL OR DETAILS; THE DETAILS OF A CLAIM OR THE SEPARATE ITE MS OF AN ACCOUNT. THE APEX COURT HELD THAT THE WORK PARTIC ULAR USED IN SECTION 271(1)(C) WOULD EMBRACE THE MEANING OF THE DETAILS OF CLAIM MADE. APPLYING THE MEANING GI VEN BY THE APEX COURT TO THE TERM PARTICULAR USED IN SEC TION 271(1)(C) OF THE ACT, WE UN-HESITATINGLY HOLD THAT THE ASSESSEE HAD FURNISHED ALL PARTICULARS RELATING TO THE TRANSFER OF ASSETS LEADING TO THE ALLEGED EARNING O F CAPITAL GAIN. THEREFORE, ATLEAST PRIMA-FACIE, THE ASSESS EE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALING THE PARTICULARS OF INCOME TO A TTRACT THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 13. FURTHER, WE FIND THAT THE EXPLANATION OFFERED BY THE ASSESSEE STATING THAT THE TRANSFER WAS FOR NO CONSIDERATION BUT ON THE CONTRARY WAS A DONATION, I S A PLAUSIBLE AND DULY SUBSTANTIATED EXPLANATION. THE RESOLUTION PASSED BY THE ASSESSEE SOCIETY DATED 29. 1.2005 CLEARLY STATES THAT THE ASSETS WERE TRANSFERRED WIT HOUT CONSIDERATION. FOLLOWING PARA AT PAGE 3 OF THE RES OLUTION CLEARLY STATES SO: ALL THE MOVABLE ASSETS APPEARING IN THE ACCOUNTS OF SCHOOL/SCHOOLS, TRANSFER TO NEW SOCIETY FOR ADMINIS TRATION SHALL BE TRANSFERRED TO THE NEW SOCIETY AT THE BOOK V ALUE AS ON 31.03.04 EXCEPT IMMOVABLE PROPERTY. BUT NOTHING IS RECOVERABLE BY THE OLD SOCIETY. THE SCHOOL ALREADY MANAGED 12 BY ONE SOCIETY, NOW WILL BE MANAGED BY THREE SOCIETIES I.E., SISTERS CONCERN SOCIETIES FOUNDED WITH SIMILAR OBJECTS. 14. MOREOVER, THE FACT THAT THE SOCIETIES TO WHOM THE ASSETS WERE TRANSFERRED WERE SHOWN AS CREDITORS, LE NDS CREDENCE TO THE EXPLANATION OF THE ASSESSEE THAT NO CONSIDERATION WAS EITHER RECEIVED OR WAS RECEIVABLE ON ACCOUNT OF THE TRANSFER SINCE IN SUCH CIRCUMSTANCES THE SOCIETIES WOULD HAVE BEEN REFLECTED AS DEBTORS AND NOT CREDITORS IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. ALSO THE FACT THAT CORPUS FUNDS HAVE BEEN DEBITED TO THE EXTENT OF TRANSFER MADE ALSO LENDS CREDECENCE TO THE ASSES SEES EXPLANATION THAT THE ASSETS WERE TRANSFERRED FOR NO CONSIDERATION. THE REVENUE, ON THE OTHER HAND, WE FIND HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO PROVE THA T THE ASSETS WERE TRANSFERRED FOR CONSIDERATION WHICH WAS EITHER RECEIVED OR WAS RECEIVABLE BY THE ASSESSEE. 15. IN THE CIRCUMSTANCES, IT CANNOT BE SAID THAT T HE ASSESSEE HAS OFFERED FACTS OR EXPLANATION WHICH IT HAS NOT BEEN ABLE TO SUBSTANTIATE AND PROVE THAT IT IS BONA FIDE. THE EXPLANATION-1(A) AND (B) OF SECTION 271(1)(C) O F THE ACT, THEREFORE, ARE ALSO NOT ATTRACTED IN THE PRESE NT CASE. MERELY BECAUSE THE EXPLANATION HAS BEEN FOUND TO BE UNTENABLE IN QUANTUM PROCEEDINGS, DOES NOT LEAD TO THE CONCLUSION THAT IT IS NOT A PLAUSIBLE ENOUGH EXPLAN ATION FOR THE PURPOSE OF DELETING THE LEVY OF PENALTY UND ER SECTION 271(1)(C) OF THE ACT. THERE MAY HAVE BEEN A NUMBER OF REASONS FOR REJECTING THE EXPLANATION OF THE 13 ASSESSEE DURING THE QUANTUM PROCEEDINGS. BUT WE FI ND THAT THE SAME WAS NOT REJECTED FOR THE REASON THAT IT WAS FOUND TO BE INCORRECT. THE HON'BLE I.T.A.T. WHILE UPHOLDING THE ADDITION MADE HELD THAT THE LD. CIT (APPEALS) HAD CATEGORICALLY HELD IN THE PRESENT CAS E THAT THERE WAS A TRANSFER OF ASSETS FOR CONSIDERATION WH ICH HAD BEEN RECEIVED BY WAY OF BOOK ENTRIES AND HENCE, THE TRANSFER IS NOT A DONATION. IT IS EVIDENT FROM THI S FINDING OF THE I.T.A.T. THAT THE EXPLANATION OF THE ASSESSE E THAT MERE BOOK ENTRIES WERE PASSED, CREDITING THE TRANSF ERORS AND DEBITING THE CORPUS FUND WAS FOUND TO BE CORREC T. BUT AT THE SAME TIME, IT WAS INTERPRETED ON THE SAM E SET OF FACTS THAT THE TRANSFER WAS NOT BY WAY OF DONATI ON. IN SUCH CIRCUMSTANCES, THE ASSESSEE SOCIETY AT BEST CA N BE HELD TO HAVE MADE AN INCORRECT CLAIM WHICH DOES NOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME. MERELY BECAUSE THE ASSESSEE DID NOT RETURN CAPITAL GAINS ON THE IMPUGNED TRANSACTION, WHICH WA S ADDED TO THE INCOME OF THE ASSESSEE, PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT ATTRACTED. MER E NON- ACCEPTANCE OF THE PLAUSIBLE ENOUGH EXPLANATION OF T HE ASSESSEE IN QUANTUM PROCEEDINGS WILL NOT TANTAMOUNT TO CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME TO ATTRACT THE LEV Y OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 16. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER O F THE LD. CIT (APPEALS) AND DELETE THE PENALTY LEVIED UNDER 14 SECTION 271(1)(C) OF THE ACT IN THE PRESENT CASE AM OUNTING TO RS.25,88,518/-. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAN DS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21 ST NOVEMBER, 2016 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH