Sh. Anil Kumar, Mohali V. ITO, W-6(4), Mohali

ITA 885/CHANDI/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0450 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 11-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ZENIA HANDA
• Keywords: Bonafide mistake
• Section: 271(1)(c)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH SMC CHANDIGARH !', # BEFORE: SMT. DIVA SINGH, JM ./ ITA NO. 885/CHD/2018 / ASSESSMENT YEAR : 2013-14 SHRI ANIL KUMAR, PROP. M/S LUXMI TRADERS, GRAIN MARKET, KHARAR, DISTT. SAS NAGAR,MOHALI. VS THE ITO, WARD 6(4), MOHALI. ./ PAN NO: AAVPK6895N / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI MOHIT DHIMAN, CA # ! ' / REVENUE BY : SMT. ZENIA HANDA, SR.DR $ % ! &/ DATE OF HEARING : 20.11.2018 '()* ! &/ D ATE OF PRONOUNCEMENT : 28.11.2018 $%/ ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 28.11.2017 OF CIT(A)-2, CHANDIGARH PERT AINING TO 2013-14 ASSESSMENT YEAR WHEREIN LEVY OF PENALTY IMPOSED U/S 271(1)(C) OF TH E INCOME TAX ACT BY THE AO HAS BEEN UPHELD. 2. THE RELEVANT FACTS OF THE CASE ARE THAT AS A RES ULT OF THE ADDITIONS MADE IN THE ASSESSMENT PROCEEDINGS, PENALTY OF RS. 1,95,557/- W AS LEVIED BY THE AO. THE FACTUAL BACKGROUND LEADING TO THE LEVY OF PENALTY AS BROUGH T OUT IN THE ASSESSMENT ORDER IS EVIDENCED FROM PARAS 3 AND 4 OF THE SAME. THE ASSE SSEE IN THE FACTS OF THE PRESENT CASE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF CATTLE FEED ETC. AND TRADING OF THE FOODGRAINS ITEMS. A SPECIFIC PROPERTY WAS SOLD IN THE YEAR UN DER CONSIDERATION AND INSTEAD OF MENTIONING THE COLLECTOR RATE MENTIONED IN THE REGI STRY AS RS. 55,60,500/-, THE ASSESSEE WHILE COMPUTING THE SHORT TERM CAPITAL GAIN CALCULA TED IT ON THE BASIS OF RS. 55 LACS AND THE MISTAKE POINTED OUT BY THE AO WAS ACCEPTED AT THE A SSESSMENT STAGE. AS A RESULT OF THIS, ADDITION OF RS. 60,500/- WAS MADE TO THE INCOME OF THE ASSESSEE. APART FROM THIS, THE AO ALSO MADE AN ADDITION OF RS. 5,94,560/- AS THE INTE REST ON LOAN WAS DEBITED TO ASSESSEE'S P&L ACCOUNT. IT WAS ACCEPTED THAT THE ASSESSEE HAD TAK EN A LOAN FOR INVESTMENT IN LAND AND THE SPECIFIC LAND HAD NOT BEEN USED IN THE BUSINESS IN THE YEAR UNDER CONSIDERATION. THE REPLY OF THE ASSESSEE DATED 31.12.2015 EXTRACTED IN THE ASSE SSMENT ORDER OFFERED IN THE COURSE OF THE ASSESSMENT PROCEEDINGS WAS NOT ACCEPTED LEADING TO THE ADDITION. SINCE THE REPLY IS RELEVANT FOR DETERMINING THE ISSUE OF PENALTY, IT IS EXTRACT ED HEREUNDER: ITA 885/CHD/2018 A.Y. 2013-14 PAGE 2 OF 2 ' THE INTEREST ON LOAN TAKEN FROM. BANK WAS RIGHTLY D EBITED TO THE PROFIT & LOSS ACCOUNT DUE TO REASON THAT THE LOAN FROM BANK WAS N OT TAKEN FOR ACQUIRING LAND AT BALONGI, BUT FOR BUSINESS PURPOSE THE LOAN WAS IN N ATURE OF LAP (LOAN AGAINST PROPERTY) AND NOT TERM LOAN FOR ACQUIRING THIS LAND AND IN ABSENCE OF ANY COLOUR OF LOAN TAKEN FROM BANK, IT WAS INCORRECT TO SAY THE L OAN WAS TAKEN FOR PURCHASING LAND AT BALONGI PARTICULARLY WHEN THE CAPTIONED ASS ESSEE HAD SUFFICIENT CAPITAL AT THE TIME OF PURCHASING ASSET AND LOAN TAKEN WAS ONL Y TO TUNE OF RS. 45 LACS ONLY. BUT STILL IN ORDER TO KEEP HARMONY WITH THE DEPARTMENT AND TO BUY PEACE OF MIND, WE AGREE FOR THE ADDITION SUBJECT TO NO PENALTY FOR CO NCEALMENT OR PROSECUTION. 3. THE ADDITIONS MADE BY THE AO ADMITTEDLY WERE NOT CHALLENGED BY THE ASSESSEE, HOWEVER IN THE PENALTY PROCEEDINGS, THE ASSESSEE VE HEMENTLY ASSAILED THE PENALTY ORDER BEFORE THE AO AS WELL AS THE CIT(A). THE SUBMISSIO NS ADVANCED BEFORE THE TAX AUTHORITIES ARE REITERATED BEFORE THE ITAT. THE LD. SR.DR RELI ES UPON THE ORDERS. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL ON RECORD. CONSIDERING THE FACTS AND TAKING NOTE OF THE FACT THAT ASSESSEE HAS RETURNED AN INCOME OF RS. 8,83,430/- FROM THE BUSINESS OF MANUFACTURING OF CATTLE FEED E TC., TAKING NOTE OF THE FACT THAT ASSESSEE IS NOT HABITUAL DEFAULTER, I FIND THAT THE PENALTY IMP OSED ON THE GROUNDS OF BONAFIDE MISTAKE IN WRONGLY MENTIONING THE SALE AMOUNT AS OPPOSED TO TH E COLLECTOR RATE WHILE COMPUTING THE SHORT TERM CAPITAL GAIN AND DEBITING THE INTEREST P AID TO ITS P&L ACCOUNT, IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE CONSIDERING T HE APPLICATION FILED, DOES NOT ATTRACT PENALTY. BEING SATISFIED WITH THE EXPLANATION OFFE RED AS PER RECORD ON BEHALF OF THE ASSESSEE, PENALTY IS DIRECTED TO BE QUASHED. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 5. I N THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.11. 2018. SD/- ( !' ) (DIVA SINGH) # / JUDICIAL MEMBER ' ( (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. $ / / CIT 4. $ / ()/ THE CIT(A) 5. -23 4, & 4, 67839/ DR, ITAT, CHANDIGARH 6. 38 :%/ GUARD FILE (+ $ / BY ORDER, ; #/ ASSISTANT REGISTRAR