The DCIT, Circle-5, Ahmedabad V. Shri Karsanbhai K. Patel, Ahmedabad

ITA 995/AHD/2008

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1405 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-05-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 17-03-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R I PATEL
• Assessee Lawyers: H C SHAH
• Keywords: Capital asset; Cost of acquisition
• Section: 143(3); 142(1)

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI R. P. TOLANI, JM, AND SHRI MANISH BORAD , AM ./ITA.NO.995/AHD/2008 ( / ASSTT YEAR : 2002-03) DCIT, CIRCLE-5, AHMEDABAD. VS. SHRI KARSANBHAI K. PATEL NIRMA HOUSE, ASHRAM ROAD,AHMEDABAD. AGGPP2909-K (APPELLANT) (RESPONDENT) / APPELLANT BY: MR. R. I. PATEL, CIT,DR / RESPONDENT BY: SHRI H. C. SHAH, AR / DATE OF HEARING 30/05/2016 /DATE OF PRONOUNCEMENT 9/06/2016 / O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER THIS APPEAL OF REVENUE IS DIRECTED AGAINST THE OR DER OF LD.CIT(A)- XI, AHMEDABAD DATED 11.01.2008 PASSED AGAINST THE O RDER U/S 271(1)(C) OF THE IT ACT, 1961(IN SHORT THE ACT) DT.29.3.2007 FRAMED BY ACIT, CIRCLE-5, AHMEDABAD. 2. GRIEVANCES OF THE REVENUE, IN THIS APPEAL ARE AS UNDER :- 1. THE LD. COMMISSIONER OF INCOME TAX (A) - II, AHM EDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING PENALTY OF RS . 6,88,10,898/- LEVIED UNDER SECTION 271(L)(C) OF THE INCOME TAX AC T, 1961. ITA.NO.995/AHD/2008 - 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME TAX (A) -II, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A) - H, AHMEDABAD MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE IS AN INDIVIDUAL WHO FILED RETURN OF INCOME FOR ASST. YEA R 2002-03 ON 9.8.2002 DECLARING TOTAL INCOME AT RS.90,65,570/-. CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE U/S 143(2) OF THE ACT WAS ISS UED ON 7.1.2003 FOLLOWED BY NOTICE U/S 142(1) OF THE ACT. ASSESSMEN T WAS COMPLETED AT AN ASSESSED INCOME OF RS.8,42,92,042/- VIDE ORDER D ATED 28.3.2005. 4. ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A), W HO DISMISSED THE APPEAL VIDE ORDER DATED 6/3/2006. 5. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE THE TR IBUNAL AGAINST THE ORDER OF LD. CIT(A) WHEREIN VIDE ITS ORDER IN ITA N O.1258/AHD/2006 FOR ASST. YEAR 2002-03 DATED 21.6.2013, CO-ORDINATE BEN CH DELETED ALL THE ADDITIONS MADE BY LD. ASSESSING OFFICER IN HIS ASSE SSMENT ORDER U/S 143(3) OF THE ACT. 6. ON COMPLETION OF ASSESSMENT PROCEEDINGS U/S 143( 3) OF THE ACT, LD. ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND AFTER RECEIVING ORDER OF LD. CIT(A) PASSED THE PENALTY ORDER ON 29.3.2007 IMPOSING PENALTY OF RS.6,88,10,989/- @ 30 0% OF THE TAX SOUGHT TO BE EVADED. ITA.NO.995/AHD/2008 - 3 7. THE ASSESSEE WENT IN APPEAL BEFORE LD. CIT(A) AG AINST THE PENALTY ORDER PASSED BY LD. ASSESSING OFFICER AND SUCCEEDED AS LD. CIT(A) DELETED THE PENALTY OF RS. 6,88,10,989/- IMPOSED U/ S 271(1)(C) OF THE ACT, BY OBSERVING AS UNDER :- 2.2.1. THE BASIS FOR THE LEVY OF PENALTY ARE VERIFIED. THE CIT(A) HAD CONFIRMED CERTAIN ADDITIONS LIKE INTEREST RECEIVABLE FRO M BONDS ON YEAR TO YEAR BASIS AS TAXABLE. THE APPELLANT HOWEVER DISAGREED TO OFF ER THE SAME ON YEAR TO YEAR BASIS BUT ON MATURITY OF THE BONDS AND IN ACCORDA NCE TO LAW. THE APPELLANT HAS DISCLOSED ALL THE FACTS OF THE BONDS AND OT HER DETAILS. BUT THERE WAS A DISAGREEMENT BETWEEN THE APPELLANT AND THE ASSESSI NG OFFICER. THE ASSESSING OFFICER WHO HAS FOLLOWED THE BOARD'S INSTRUCTIONS HAS T AXED THE APPELLANT ON ACCRUAL OF INTEREST ON YEARLY BASIS. IN THE FIRST APPEAL TH E APPELLANT DID NOT GET THE FAVOURABLE ORDER, THEREFO RE WENT FOR SECOND APPEAL. 2.2.2. IT MAY BE SEEN THAT THE APPELLANT HAS RECEIVED T HE FAVOURABLE ORDER IN CASE OF KISAN DISCRETIONARY FAMILY TRUST VIDE ITA NO. 1850/A HD/2007 FOR A. Y. 2003-04 WHEREIN THE FACTS AND CIRCUMSTANCES OF THE CASE ARE SIMILAR TO THE APPELLANT'S CASE. THEREFORE IT IS THE ARGUMENT OF THE A. R. THAT THE ADDITION CONFIRMED IN APPELLANT'S CASE CANNOT BE SUSTAINABLE, HENCE, THE PENALTY LEVIED BASED ON SUCH ADDITIONS ARE NOT BASED ON ANY FAIR GROUNDS. 2.2.3. IT IS ALSO ARGUED THAT THE APPELLANT HAS DISCLO SED ALL MATERIALS FACTS OF THE CASE. THEREFORE, THERE IS NO CONCEALMENT OF ANY INFORMATI ON OR THE APPELLANT DID NOT FURNISH ANY INACCURATE PARTICULARS. THE APPELLANT ALSO DID NOT CONCEAL ANY INCOME SINCE THE APPELLANT CLAIMED AS A LONG TERM CAPITAL GAINS WHEREAS THE A.0. DECIDED AS A SHORT TERM CAPITAL GAINS. 2.2.4. IT IS FURTHER ARGUED THAT THE ISSUES PERTAINING TO ADDITIONS CONFIRMED ARE DEBATABLE, THEREFORE, THE A. O. COULD NOT FINALLY FIN D APPELLANT AS A DEFAULTER FOR CONCEALMENT OF INCOME WHICH ATTRACTS PENALTY. 2.2.5. THE RELEVANT PARAS OF THE 1TAT ORDER PAGE NO.6 5 IN CASE OF KISAN DISCRETIONARY FAMILY TRUST WHICH IS CITED AS ABOVE IS REPROD UCED FOR CONVENIENCE SAKE AS FOLLOWING.:- 'IN OTHER WORDS, WE ARE OF THE OPINION THAT SO FAR AS ASSESSEE'S CASE IS CONCERNED, IT HAS TO BE HELD TO HAVE FOLLOWED CASH SYSTEM OF ACCOUNTING WITH EFFECT FROM 01-04-2001. SINCE WE HAVE ACCEPTED THE ASSESSEE'S CHANGE IN SYSTEM OF ACCOUNTING AS 'CASH SYSTEM' FROM 'MERCANTILE SYSTEM', THERE IS NO QUESTION OF TAXING THE INTEREST OR ANY OTHER INCOME FROM SO-CALLED DEEP ITA.NO.995/AHD/2008 - 4 DISCOUNT BONDS INCLUDING ON ACCRUAL BASIS AND, THEREFORE, DIRECT THE ASSESSING OFFICER TO DELETE ALL SUCH ADDITIONS, TO BE SPECIF IC, WE DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS. 77.95 .691/-. PAGE NO.79 OF THE ABOVE ORDER (LAST PARA). THE REVENUE'S STAND THAT CIRCULAR NO.2 OF 2002 IS RETROSP ECTIVE I.E. APPLICABLE TO BONDS PURCHASED PRIOR TO THIS CIRCULAR ALSO, CANNOT BE SUSTAINED BECAUSE THIS CIRCULAR IS SILENT WITH RESPECT TO CH ARGEABILITY OF INCOME EARNED PRIOR TO DATE OF THIS CIRCULAR; MEANING T HEREBY THAT IN CASE WHERE THE BONDS HAD BEEN PURCHASED PRIOR TO THIS CIRCU LAR, THE INCOME HAVING BEEN ARISEN (IN THE LIGHT OF THIS CIRCULAR) REMAINED UNTAXED. THE CIRCULAR, THEREFORE, SPEAKS OF DIFFERENT TR EATMENT TO THE INCOME ACCRUED FOR EARLIER YEARS AND TO ACCRUE IN SUBSEQUE NT YEAR. CONSEQUENTLY, THIS CIRCULAR CANNOT BE CONSIDERED TO BE VALI D IN THE EYES OF LAW. PAQENO.80 { PARA NI. 33.1) WITHOUT PREJUDICE TO OUR AFORESAID VIEW, THAT THE CIRCUL AR NO.2 OF 2002 WAS IN VALID AND COULD NOT BIND THE ASSESSEE, WE ARE, FUR THER OF THE OPINION THAT IN VIEW OF LANGUAGE OF PARAGRAPH NO.3 O F THIS CIRCULAR AND THE PRESS NOTE/RELEASE DATED 20-03-2002, THE CIRCULAR N O.2 OF 2002 WAS NOT APPLICABLE TO THE DDBS PURCHASED/SUBSCRIBED BEFORE 15-02- 2002 AND, . THEREFORE, ADDITION ON ACCOUNT OF INCOME F ROM SUCH BOND IS DELETED. . PAGE NO. 91 FPARA NO.41.) . AFTER CAREFUL CONSIDERATION OF THE DECISION (SUPRA), WE A RE OF THE OPINION THAT SO FAR INTEREST ON OFCPN OF NIRMA INDUST RIES LTD., ADMITTEDLY, THERE BEING NO AGREEMENT FOR PAYMENT OF INTEREST ON YEARLY BASIS, THE SAME WAS NOT TAXABLE EITHER ON MERCANTILE BASI S OR ON CASH BASIS. . 2.2.6. THEREFORE, HAVING VERIFIED THE FACTS AND CIRCUMSTA NCES OF THE CASE, I FIND THAT THE HONOURABLE ITAT HAD DECIDED IN FAVOUR O F THE APPELANT'S CASH METHOD OF ACCOUNTING AS IT IS SEEN IN CASE OF KISAN DISCRE TIONARY FAMILY TRUST VIDE ITA NO. 1850/AHD/2007 DATED 2-11-2007. THEY HAVE ALSO DISAGREED IN RESPECT OF CHARGING INTEREST ON ACCRUAL BASIS. THEY HAVE ALSO HELD THAT THE BOARD'S CIRCULAR CANNOT BE APPLIED RETROSPECTIVELY. THEREF ORE, ! FIND THAT THE ISSUES INVOLVED ARE DEBATABLE SINCE THE APPELLANT HAS BASICAL LY DISCLOSED ALL THE FACTS. AS IT IS SEEN IN ABOVE CITED CASE, THE A. O. AS WELL AS CIT(A) DID NOT AGREE WITH THE METHOD OF ACCOUNTING OF THE INCOME OF T HE BONDS. HOWEVER, THE HON'BLE ITAT, AHMEDABAD HAS ACCEPTED THE CASH METHO D OF ACCOUNTING IN CASE OF INCOME DERIVED FROM BONDS. THEREFORE, THE ISSUE S ARE DEBATABLE, I ITA.NO.995/AHD/2008 - 5 FIND THAT THE APPELLANT CANNOT BE TREATED AS A DEFAUL TER FOR ALLEGED CONCEALMENT WHICH ATTRACTS PENALTY UNDER SECTION 271(1)(C) O F I. T. ACT. THEREFORE, ORDER LEVYING THE PENALTY BY THE A. O. IS HE REBY CANCELLED. 8. AGGRIEVED, REVENUE IS NOW IN APPEAL BEFORE THE T RIBUNAL. 9. LD. DR SUPPORTED THE ORDER OF LD. ASSESSING OFFI CER. 10. ON THE OTHER HAND, LD. AR RELIED ON THE ORDER O F FIRST APPELLATE AUTHORITY AND FURTHER SUBMITTED THAT AS ALL THE ADD ITIONS MADE BY LD. ASSESSING OFFICER IN THE ORDER U/S 143(3) OF THE AC T HAVE BEEN DELETED BY THE TRIBUNAL VIDE ITS ORDER IN ITA NO. ITA NO.1258/ AHD/2006 FOR ASST. YEAR 2002-03, LD. CIT(A) HAS RIGHTLY DELETED THE PE NALTY U/S 271(1)(C) OF THE ACT, AS THERE REMAINS NO CASE AGAINST THE ASSES SEE FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THROUGH THIS APPEAL, SOLITARY GRIEVANCE OF THE REVENUE IS AGAINST THE ACTION OF LD. CIT(A) DELETING THE PENALTY OF RS . 6,88,10,989/- LEVIED U/S 271(1)(C) OF THE ACT. WE OBSERVE THAT IN THE Q UANTUM APPEAL, BEFORE THE CO-ORDINATE BENCH, ALL THE ADDITIONS MADE BY LD . ASSESSING OFFICER IN THE ASSESSMENT U/S 143(3) OF THE ACT, WERE DELETED BY THE TRIBUNAL IN ITA NO.1258/AHD/2006 FOR ASST. YEAR 2002-03 VIDE ITS OR DER DATED 21.6.2013 BY OBSERVING AS UNDER :-. 3.2.1 BRIEF FACTS OF THE CASE ARE THAT IT IS NOTED B Y THE A.O. IN PARA 3 OF THE ASSESSMENT ORDER THAT THE ASSESSEE FILED A LETTER DATED 11.08.2004 IN WHICH ASSESSEE OFFERED ACCRUED INTEREST ON OFCPN OF NIRMA INDUSTRIES LTD., THE ASSESSEE STATED THAT AS PER CIRCULAR NO.2 DATED 15.02.2002, THE INCOME IS OFFERED ALTHOUGH AS PER THE ASSESSEE, THIS CIRCULAR IS NOT APPLICABLE IN THE CASE OF OPTIONALLY FULLY CONVERTIBLE PREMIUM NO TES (OFCPN) SINCE THE SAME WAS ITA.NO.995/AHD/2008 - 6 RELATED TO DDBS. IT WAS ALSO STATED BY THE ASSESSEE THAT BECAUSE OF ABUNDANT PRECAUTION, THE INCOME IS OFFERED. IT IS FURTHER NOTED BY THE A.O. TH AT ASSESSEE HAS PURCHASED 16528 OFCPN OF NIRMA INDUSTRIES LTD. ON 25.03.2002 OF RS.4132 LACS A ND THE INTEREST ACCRUED ON THE SAME AMOUNTING TO RS.4,90,220/- WAS OFFERED BY THE ASSESS EE AS INCOME BY WAY OF THIS LETTER DATED 11.08.2004. THE A.O. HAS NOT ACCEPTED THE CLAIM OF THE ASSESSEE THAT THIS BOARD'S CIRCULAR NO.2 DATED 15.02.2002 IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE BECAUSE THE SAME IS RELATED TO DDBS ONLY. THE A.O. HELD THAT THE NATURE OF OFCPN IS SIMILAR AS THAT OF DDBS AND THIS BOARD'S CIRCULAR IS APPLICABLE TO OFCPN ALSO. BEFORE LD . CIT(A), THE ASSESSEE RAISED AN ISSUE THAT THE METHOD OF ACCOUNTING ADOPTED BY THE ASSESS EE IS CASH METHOD OF ACCOUNTING AND NOT MERCANTILE METHOD OF ACCOUNTING AS HAS BEEN HELD BY THE A.O. IN THE ASSESSMENT ORDER. BUT LD. CIT(A) DID NOT ACCEPT THIS CONTENTION AND HELD THAT THE METHOD OF ACCOUNTING IS RIGHTLY ADOPTED BY THE A.O. AS MERCANTILE METHOD OF ACCOUNTI NG AND NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 3.2.2 IT WAS SUBMITTED BY THE LD. A.R. BEFORE US THA T THE ASSESSEE IS FOLLOWING CASH METHOD OF ACCOUNTING. HE FURTHER SUBMITTED THAT THE I.T.A.NO. 3133/AHD/2007 I.T.A.NO. 1082/AHD/2010 METHOD OF ACCOUNTING WAS TAKEN AS CAS H BASED ON ASSESSMENT YEAR 2005-06. HE FURTHER SUBMITTED THAT IN I.T.A.NO. 1291/AHD/2009 DATED 08.04.2011 FOR ASSESSMENT YEAR 2005-06, IN THE TRIBUNAL DECISION OF DEPARTMENTAL AP PEAL, IT WAS HELD THAT METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE IS CASH METHOD. HE SUBMITTED COPY OF THE TRIBUNAL DECISION BEFORE US. HE FURTHER SUBMITTED THAT THE A.O. IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2004-05 HAS HELD THAT THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE IS CASH METHOD OF ACCOUNTING AND HAS SUBMITTED A COPY OF ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2004-05. AT THIS JUNCTURE, THE BENCH WANTED TO S EE THE BALANCE SHEET AND P & L ACCOUNT ALONG WITH COMPUTATION OF INCOME OF THE PRESENT YEAR TO FIND OUT THE METHOD OF ACCOUNTING BEING FOLLOWED BY THE ASSESSEE IN THE PRESENT YEAR B ECAUSE THE FACTS OF THE PRESENT YEAR MAY BE DIFFERENT THAN THAT OF THE FACTS IN ASSESSMENT YEAR 2 005-06 AND 2004-05. THE SAME WERE SUBMITTED BY THE LD. A.R. LD. D.R. SUPPORTED THE ORDE RS OF AUTHORITIES BELOW. 3.2.3 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERU SED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. FROM THE P ERUSAL OF THE BALANCE SHEET, P & L ACCOUNT AND COMPUTATION OF INCOME FILED BY THE ASSE SSEE FOR THE PRESENT YEAR, WE FIND THAT THE METHOD OF ACCOUNTING IS CASH METHOD AND NOT MERCANTI LE METHOD. ACCORDINGLY THIS GROUND IS ALLOWED. 3.3 GROUNDS NO.3 & 4 ARE INTERCONNECTED WHICH READ AS U NDER: 3. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPE LLANT'S CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE ACTIO N OF ID. ASSESSING OFFICER IN CONSIDERING THE LONG TERM CAPITAL GAIN OF RS.7,47,35 ,955/- ON SALE OF 3385 DEEP DISCOUNT BONDS OF NIRMA LIMITED AS SHORT TERM CAPITAL GAIN. ITA.NO.995/AHD/2008 - 7 4. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPE LLANT'S CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE ACTIO N OF ID. ASSESSING OFFICER IN NOT ALLOWING CLAIM I.T.A.NO. 3133/AHD/2007 I.T.A.NO. 10 82/AHD/2010 OF DEDUCTION U/S.54EC OF THE ACT ON LONG TERM CAPITAL GAIN REFERRED TO IN GROU ND NO.3 ABOVE. 3.3.1 IT WAS SUBMITTED BY THE LD. A.R. THAT THIS IS SUE IS IDENTICAL TO GROUNDS NO.2 & 3 IN THE CASE MS. PUNITABEN K PATEL FOR THE SAME ASSESSMENT Y EAR AND THE SAME CAN BE DECIDED ON SIMILAR LINES. LD. D.R. SUPPORTED THE ORDERS OF AUTHORI TIES BELOW. 3.3.2 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERU SED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND T HAT SIMILAR ISSUE IS DECIDED BY US IN THE CASE OF MS. PUNITABEN K PATEL AS PER PARA 2.2.3 & 2.2.4 ABOVE AND IT IS HELD BY US THAT THE PERIOD OF HOLDING HAS TO BE COUNTED FROM THE DATE OF ALLOTMENT AND NOT FROM THE DATE OF LISTING IN NSE. IN THE PRESENT CASE ALSO, THE DDBS WERE SOL D BY THE ASSESSEE ON 19.03.2002 AND HENCE, THE PERIOD OF HOLDING IS MORE THAN 12 MONTHS WHEN THE SAME IS WORKED OUT FROM THE DATE OF ALLOTMENT I.E. 23.09.2000 AND HENCE, IN THE PRESENT CASE ALSO, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE ON THE SAME LINES OF OUR DECIS ION IN THE CASE OF MS. P K PATEL AS PER PARA 2.2.3 & 2.2.4 ABOVE. IN THE PRESENT CASE ALSO, WE HOLD THAT THE GAIN IN QUESTION OF RS.7,47,35,955/- ON SALE OF 3385 DDBS OF NIRMA LTD. IS TAXABLE AS LTCG AND NOT STCG AND THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 54EC OF T HE INCOME TAX ACT, 1961 TO THE EXTENT OF ENTIRE AMOUNT OF SUCH LTCG ON SALE OF DDBS OF NIRMA LTD. BECAUSE THE ASSESSEE HAS CLAIMED TO HAVE MADE ELIGIBLE INVESTMENT OF RS.747.40 LACS U/S 54EC OF THE INCOME TAX ACT, 1961. WE HOLD ACCORDINGLY. GROUNDS NO.3 & 4 ARE ALLOWED. 3.7 THE ASSESSEE HAS RAISED ON ADDITIONAL GROUND WHIC H READS AS UNDER: 'IN LAW AND IN THE FACTS OF THE APPELLANTS CASE, TH E ADDITION OF RS.4,90,220/- BEING NOTIONAL ACCRUED INTEREST ON OPTIONALLY FULLY CONVERTIBLE PREMIUM NOTES (OFCPNS) OF NIRMA INDUSTRIES LTD. MISCELLANEOUS APPLICATION BE DELETED.' 3.7.1 IT WAS SUBMITTED BY THE LD. A.R. THAT THE DEC ISION ON THIS GROUND IS DEPENDING ON THE OUTCOME OF GROUND NO.2 OF THE ASSESSEE'S APPEAL AND IF IT IS HELD THAT THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING THEN THIS INCOME OF RS.4, 90,220/- OF OFCPNS OF NIRMA INDUSTRIES LTD. CANNOT BE TAXED IN THE PRESENT YEAR BECAUSE THE INCOME OF THE ASSESSEE HAS TO BE ASSESSED ON CASH BASIS ONLY. SINCE WE HAVE DECIDED GROUND NO. 2 IN FAVOUR OF THE ASSESSEE AS PER PARA 3.2.3 ABOVE AND IT IS HELD BY US THAT THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE HAS TO BE AL LOWED BECAUSE ONCE IT IS HELD THAT THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING, NO INCOME ON ACCOUNT OF INTEREST OF OFCPNS CAN BE TAXED IN THE PRESENT YEAR ON ACCRUAL BASIS AND THIS IS ADMITTED FACT THAT NO SUCH INTEREST INCOME WAS RECEIVED BY THE ASSESSEE IN THE P RESENT YEAR. THEREFORE, THIS ADDITIONAL GROUND IS ALSO ALLOWED WITH THE RIDER THAT THE INTERES T INCOME SHOULD BE TAXED IN THE YEAR IN WHICH THE SAME IS RECEIVED BY THE ASSESSEE. ITA.NO.995/AHD/2008 - 8 3.7.2 IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 12. FURTHER WE FIND THAT IN THE OTHER GROUP CASE, I N ASSESSEES FAMILY, WE HAVE RECENTLY DEALT WITH SIMILAR ISSUE IN THE CA SE OF DCIT VS. PUNITABEN K. PATEL IN ITA NO.2005/AHD/2008 FOR ASST . YEAR 2002-03 WHEREIN VIDE OUR ORDER DATED 3/5/2016 WE HAVE HELD THAT ASSESSEE SHOULD NOT BE VISITED WITH PENALTY U/S 271(1)(C) OF THE AC T AND THE RELEVANT PORTION OF ITA NO.2005/AHD/2008 (SUPRA) IS REPRODUC ED BELOW :- 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THROUGH THIS APPEAL REVENUE IS AGGRIEVED WITH THE ORDER OF LD. CIT(A) DELE TING THE PENALTY OF RS. 22,42,000/- WHICH WAS IMPOSED U/S 271(1)(C) OF THE ACT ON THE FOLLOWING ADDITIONS :- 1. ADDITION ON ACCOUNT OF ACCRUED INTEREST ON OFCPNS OF NIRMA INDUS. LTD. RS.50,185/- 2 ADDITION ON ACCOUNT OF SHORT TERM CAPITAL GAIN ON SALE OF DDBS OF NIRMA LTD. RS.8,79,320/- 3 ADDITION ON ACCOUNT OF SHORT TERM CAPITAL GAIN ON THE TRANSACTION OF STRIPS OF TATA FINANCE LTD. RS.53,49,000/- TOTAL RS.62,78,505 ADDITION OF RS.50,185/- ( ACCOUNT OF ACCRUED INTEREST ON OFCPNS OF NIRMA INDUSTRIES LTD.) 9. WE OBSERVE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF IT WAS BROUGHT TO THE NOTICE OF LD. ASSESSING OFFICER THAT ASSESSEE HAS FILED HER RETURN OF INCOME ON CASH METHOD OF ACCOUNTING AND DUE TO THIS REASON THE INTEREST OF RS.50,185/- ON OFCPNS OF NIRMA INDUS. LTD. WAS NOT SHOWN IN THE RETURN OF INCOME. CERTAINLY IN SUCH SITUATION THERE CANNOT BE A CASE OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME WHICH ARE NECESSARY FOR IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT. 10. WE FURTHER OBSERVE THAT IN ITA NO.1255/AHD/2006 FOR ASST. YEAR 2002-03, VIDE ORDER DATED 21.06.2013, THE TRIBUNAL HAS DEALT WITH THE GROUNDS OF ASSESSEE FOR THE IMPUGNED ADDITIONS OF RS. 8,79,320/- & RS.53,49,000/- MADE LD. ASSESSING OFFICER AND THE GROUNDS HAVE BEEN ALLOWED BY ADJUDICATING THE ISSUES AS UNDER :- ITA.NO.995/AHD/2008 - 9 ADDITION OF RS. RS.8,79,320/- (ACCOUNT OF SHORT TERM CAPITAL GAIN ON SALE OF DDBS OF NIRMA LTD.) 2.2 GROUNDS NO.2 & 3 ARE INTERCONNECTED AS REPRODUCED BELOW: 2. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE ACTION OF ID. ASSESSING OFFICER IN CONSIDERING THE LONG TERM CAPITAL GAIN OF RS.8,79,320/- ON SALE OF 40 DEEP DISCOUNT BONDS OF NIRMA LIMITED AS SHORT TERM CAPITAL GAIN. 3. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE ACTION OF ID. ASSESSING OFFICER IN NOT ALLOWING CLAIM OF DEDUCTION U/S.54EC OF THE ACT ON LONG TERM CAPITAL GAIN REFERRED TO IN GROUND NO. 2 ABOVE. 2.2.1 THE BRIEF FACTS OF THE CASE ARE THAT IT IS NOTED BY THE A.O. IN PARA 4 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN (LTCG ) OF RS.8,79,320/- IN RESPECT OF PURCHASE AND SALE OF DEEP DISCOUNT BONDS (DDBS) OF NIRMA LTD. HE HAS ALSO NOTED THAT THE PURCHASE COST OF THE SAME HAVE BEEN SHOW N AT RS.40 LACS AND SALE CONSIDERATION HAS BEEN DECLARED AT RS.48,79,320/-. HE HAS FURTHER NOTED THAT THESE DDBS WERE ALLOTTED TO THE ASSESSEE ON 28.07.2000 AND T HE ALLOTMENT LETTER WAS ISSUED TO THE ASSESSEE DATED 23.09.2000. HE HAS FURTHER NOTED THAT THE DEBENTURE CERTIFICATE HAS BEEN ISSUED TO THE ASSESSEE DATED 05.10.2001. THEREAFTER, IT IS NOTED THAT DDBS OF SERIES A OF NIRMA INDUSTRIES LTD. WERE LISTED IN NATIONAL STOCK EXCHANGE (NSE) ON 20.09.2001 AND WAS MADE AVAILABLE FOR DEMATERIALIZATION AS ON 19.09.2001. THEREAFTER, HE HAS NOTED THAT THESE DDBS OF NIRMA LTD WERE SOLD BY THE ASSESSEE ON18.03.2002. THE ASSESSEE HAS CLAIMED IT AS LONG TERM CAPITAL ASSET BY COUNTING THE HOLDING PERIOD STARTING FORM THE DATE OF ALLOTMENT I.E. 28.07.2000 BUT THE A.O. WAS OF THE VIEW THAT THESE ARE SHORT TE RM CAPITAL ASSETS ON THE BASIS OF COUNTING OF HOLDING PERIOD FROM THE DATE OF LISTI NG OF THE SAME IN NSE I.E. 20.09.2001. ON THE BASIS OF THIS, THE A.O. HELD THAT THIS CAPITAL GAIN OF RS.8,79,320/- IS ASSESSABLE AS SHORT TERM CAPITAL GAIN AND HE TAXED THE SAME ACCORDINGLY. MOREOVER, THE A.O. DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 54EC OF THE INCOME TAX ACT, 1961 ALSO FOR THE SAME REASON THAT SUCH DEDUCT ION IS ALLOWABLE AGAINST LTCG ONLY AND NOT AGAINST STCG. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A) BUT WITHOUT SUCCESS AND NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 2.2.2 IT WAS SUBMITTED BY THE LD. A.R. BEFORE US THAT IN THE CASE OF SHRI KAR SANBHAI P PATEL (HUF) FOR THE SAME ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2002-03, THIS ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE IN I.T.A.NO. 1042/A/2006 DATED 09.10.2009. HE SUBMITTED THAT THIS DECISION IS AVAILABLE ON PAGES 62-87 OF THE PAPER BOOK AND THE RELEVANT PARA IS PARA 26 OF THIS TRIBUNAL DECISION ON PAGE 85 OF THE PAPER BOOK. LD. D.R. SUPPORTED THE ORDERS OF AUTHORITIES BELOW. ITA.NO.995/AHD/2008 - 10 2.2.3 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECOR D AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND THE TRIBUNAL DECISION CITED BY LD. A.R. FROM THE FACTS NOTED BY THE TRIBUNAL IN THAT CASE, WE FIND THAT THE DISPUTE BEFORE THE TRIBUNAL WAS REGARDING THE SAME DDBS OF NIRMA LTD. FOR WHICH L ETTER OF ALLOTMENT WAS ISSUED BY NIRMA LTD. ON 23.09.2000 AND DEBENTURE CERTIFICATE WAS ISSUED ON 05.10.2001 AND THE SAME WAS LISTED IN NSE ONLY ON 20.09.2001. HENCE, THE FACTS IN THE PRESENT CASE ARE IDENTICAL. THIS ISSUE WAS DECIDED BY THE TRIBUNAL AS PER PARA 26 OF THE TRIBUNAL DECISION AND FOR THE SAKE OF READY REFERENCE, THE SAME IS REPRODUCED BELOW: FOR THE AFORESAID REASONS, WE ARE OF THE VIEW THAT THE ASSESSEE IS RIGHT IN CLAIMING THAT THE CAPITAL GAINS ARISING ON THE SALE OF THE DEEP DISCOUNT BONDS SHOULD BE ASSESSED AS LONG TERM CAPITAL GAINS ON THE FOOTING THAT HE HELD THEM FOR A PERIOD OF MORE THAN 12 MONTHS STARTING FORM 23.09.2000 BEFORE THEY WERE SOLD ON 2.03.2002. CONSEQUENTLY, WE ALSO HOLD THAT THE ASSESSEE IS ENTITLED TO THE EXEMPTION U/S 54EC AS CLAIMED. THUS BOTH GROUNDS NOS. 2 AND 3 ARE ALLOWED. 2.2.4 FROM THE ABOVE PARA OF THE TRIBUNAL ORDER, WE FIND THAT IT WAS HELD BY T HE TRIBUNAL THAT THE HOLDING PERIOD HAS TO BE COUNTED FORM THE DATE OF ALLOTMENT TI LL THE DATE OF SALE AND IF THE SAME IS MORE THAN 12 MONTHS THEN, IT HAS TO BE ACCEPTE D THAT IT IS A LTCG AND THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 54EC ALSO. HENC E, IN THE PRESENT CASE ALSO, BY RESPECTFULLY FOLLOWING THE TRIBUNAL DECISION, WE DEC IDE BOTH THESE ISSUES IN FAVOUR OF THE ASSESSEE AND IT IS HELD THAT SINCE P ERIOD OF HOLDING WAS MORE THAN 12 MONTHS FROM THE DATE OF ALLOTMENT I.E. 23.09.2000 TILL THE DATE OF SALE I.E. 18.03.2002, THE RESULTING GAIN HAS TO BE ASSESSED AS LTCG AND THE ASSESSEE SHOULD BE HELD AS ELIGIBLE FOR DEDUCTION U/S 54EC ALSO BECAUSE THERE IS NO OT HER OBJECTION OF THE REVENUE REGARDING ALLOWABILITY OF DEDUCTION U/S 54EC EXCEPT THAT THE INCOME IN QUESTION IS NOT A LTCG. BOTH THESE GROUNDS NO.2 & 3 ARE ALLOWED. ADDITION OF RS.53,49,000/- (ACCOUNT OF SHORT TERM CAPITAL GAIN ON THE TRANSACTION OF STRIPS OF TATA FINANCE LTD. 2.3 GROUNDS NO.4 & 5 ARE INTERCONNECTED WHICH READ AS UNDER: 4. IN JAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE ACTION OF ID. ASSESSING OFFICER IN CONSIDERING THE LONG TERM CAPITAL GAIN OF RS.53,49,000/- ARISING ON SALE OF PRINCIPAL STRIP PART A OF TATA FINANCE LTD. NCDS AS SHORT TERM CAPITAL GAIN. 5. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE ACTION OF ID. ASSESSING OFFICER IN NOT ALLOWING CLAIM OF DEDUCTION U/S.54EC OF THE AC T ON LONG TERM CAPITAL GAIN REFERRED TO IN GROUND NO. 4 ABOVE. ITA.NO.995/AHD/2008 - 11 2.3.1 THE BRIEF FACTS REGARDING THESE ISSUES ARE THAT IT IS NOTED BY THE A .O. IN THE SAME PARA 4 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS SHOWN LTCG OF RS.53.49 LACS FROM THE TRANSACTION OF NCD PRINCIPLE STRIP, PART A SERIES I OF TATA FINANCE LTD. HAVING PURCHASE COST OF RS.495.51 LACS AND SALE CONSIDERATION BEING RS.549 LACS. IN RESPECT OF THIS CAPITAL GAIN ALSO, THE ASSESSEE CLAIMED DEDUCTION U/S 54EC OF THE INCOME TAX ACT, 1961 BECAUSE THE ASSESSEE HAD MADE INVESTMENT IN THE BONDS OF RURAL ELECTRICITY CORPORATION (REC) OF RS.62.20 LACS AND THE LTCG OF ONLY RS.8320 HAD BEEN OFFERED BY THE ASSESSEE. THE A.O. HAS FURTHER NOTED THAT THE ASSESS EE HAS PURCHASED 9 PRINCIPLE STRIPS OF PART A SERIES I OF TATA FINANCE LTD. OF RS.1 CRORES (FACE VALUE) FOR A CONSIDERATION OF RS.495.41 LACS ON 23.10.2000 FROM NIRMA INDUSTRIES LTD., WHICH IS A GROUP CONCERN OF NIRMA GROUP AND THE SAME WAS SOLD BY THE ASSESSEE ON 20.03.2002 AT RS.549 LACS TO NIRMA INDUSTRIES LTD. I.E. THE SAM E CONCERN FROM WHICH THE ASSESSEE PURCHASED THESE STRIPS. THE A.O. ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY THE BOARDS CIRCULAR NO.2 OF 2002 DATED 15.02.2002 IS NOT APPLICABLE AND WHY THIS CAPITAL GAIN SHOULD NOT BE CONSIDERED AS STCG IN THE LIGHT OF THIS BOARDS CIRCULAR. IN REPLY, IT WAS SUBMITTED BY THE ASSE SSEE BEFORE THE A.O. THAT THE LETTER OF BOARD DATED 12.03.1996 WAS APPLICABLE IN THE PRESENT CASE AND THEREFORE, THE GAIN IS LTCG. IT WAS FURTHER SUBMITTED BY THE ASSESSE E BEFORE THE A.O. THAT AS PER THE PRESS RELEASE OF THE BOARD DATED 20.03.2002, THE APPLICABILITY OF THE CIRCULAR IS PROSPECTIVE AND NOT RETROSPECTIVE AND FOR THIS REASON ALSO, T HE GAIN IN QUESTION IS LTCG AND THE SAME CANNOT BE CONSIDERED TO BE STCG. THE A.O. WAS NOT SATISFIED AND HE HELD THAT THIS GAIN OF RS.53.49 LACS IS STSCG AND THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 54EC ALSO. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A) BUT WITHOUT SUCCESS AND NOW, THE ASSESSEE IS I N FURTHER APPEAL BEFORE US. 2.3.2 IT WAS SUBMITTED BY THE LD. A.R. THAT THIS ISSUE IS ALSO COVERED I N FAVOUR OF THE ASSESSEE BY THE TRIBUNAL DECISION RENDERED IN THE CASE OF ITO VS K ULGAM HOLDINGS PVT. LTD. IN I.T.A.NO. 3785 AND 2574/AHD/2004 DATED 25.04.2007, COPY OF WHICH IS AVAILABLE ON PAGE 136-140 OF THE PAPER BOOK II. HE FURTHER SUBMITTED THAT ON THE SAME ISSUE, ANOTHER TRIBUNAL DECISION RENDERED IN THE CASE OF NAVIN ASSOCI ATES VS ACIT AND OTHERS IN I.T.A.NO. 1248, 1256 & 1266/AHD/2006 IS ALSO IN FAVOUR OF THE ASSESSEE AND A COPY OF THIS TRIBUNAL DECISION IS AVAILABLE ON PAGES 196- 199 OF THE PAPER BOOK II. LD. D.R. SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 2.3.3 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECOR D AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND THE TRIBUNAL DECISIONS CITED BY LD. A.R. WE FIND THAT IN THE CASE OF NAVIN ASSOCIATES (SUPRA), THE IS SUE INVOLVED WAS, WHETHER THE BOARDS CIRCULAR NO.2 OF 2002 DATED 15.02.2002 CAN BE APPLIED IGNORING THE PRESS NOTE DATED 20.03.2002 ISSUED IN THIS REGARD BY CBDT. THE TRIBUNAL IN THAT CASE HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE TRIBUNAL DECISION RENDERED BY THE MUMBAI BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF ITO VS KULGAM HOLDINGS PVT. LTD. (SUPRA). THE TRIBUNAL HAS ALSO FOLLOWED SMC BENCH DECISION OF AHMEDABAD BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF NAVIN ASSOCIATES IN I.T.A.NO. 1621/AHD/2007 DATED 04.04.2008. WE FIND THAT IN THE CASE OF ITO VS KULGAM ASSOCIATES (SUPRA), IT WAS HELD BY LD. CIT(A) THAT S INCE THE BONDS WERE ACQUIRED BY THE ASSESSEE PRIOR TO THE DATE OF BOARDS CIRCULAR NO.2 DATED ITA.NO.995/AHD/2008 - 12 15.02.2002, SUCH BOARDS CIRCULAR CANNOT BE MADE APPLICABLE BECAUSE THE BONDS IN QUESTION WERE ACQUIRED PRIOR TO THIS DATE AND AS PER SUBSEQUENT PRESS RELEASE DATED 20.03.2002, IT WAS MADE CLEAR THAT THIS BOARDS CIRCULAR NO.2 WILL BE APPLICABLE ONLY FOR BONDS WHICH ARE ACQUIRED AFTER THIS DATE. THIS DECISION OF LD. CIT(A) WAS APPROVED BY THE TRIBUNAL IN THAT CASE. SIMILARLY IN THE CASE OF NAVIN ASSOC IATES (SUPRA), SIMILAR ISSUE WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASS ESSEE AND WHILE DECIDING THIS ISSUE IN THAT CASE, THE TRIBUNAL HAS FOLLOWED A DECISION OF SMC BENCH OF AHMEDABAD BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF NAVIN ASSOCIATES (SUPR A). THIS SMC BENCH DECISION OF THE TRIBUNAL HAS FOLLOWED A DIVISION BENCH DECISION OF AHMEDABAD BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF KISAN DISCRETION FAMI LY TRUST IN I.T.A.NO. 1850/AHD/2007 DATED 02.11.2007. THIS TRIBUNAL DECISION IS ALSO AVAILABLE IN THE PAPER BOOK-II ON PAGES 141-195. IN PARA 57 OF THIS TRIBUNAL DECISION ON PAGE 194 (BACKSIDE), IT WAS HELD BY THE ACCOUNTANT MEMBER IN THAT CASE THAT THIS BOARDS CIRCULAR DATED 15.02.2002 IS APPLICABLE ONLY TO DDBS ACQUIRED ON OR AFTER 15.05.2002 AND SINCE JUDICIAL MEMBER IN THAT CASE WAS ALSO HAVING THE SAME VIEW, THE MATTER WAS DECIDED IN FAVOUR OF THE ASSESSEE WITHOUT REFERRING THE SAME TO THE THIRD MEMBER ALTHOUGH THE ACCOUNTANT MEMBER WAS HAVING SOME RESERVATIONS ABOU T THE VIEW OF THE JUDICIAL MEMBER ON SOME OTHER ASPECTS. BE THAT AS IT MAY BUT THIS IS ADMITTED POSITION THAT ON THIS ASPECT, I.E. BOARDS CIRCULAR NO.2 DATED 15.02.2002 IS APPLICABLE ONLY ON THOSE BONDS WHICH WERE ACQUIRED ON OR AFTER 15.02.2002, THERE ARE SEVERAL TRIBUNAL DECISIONS IN FAVOUR OF THE ASSESSEE AND NO CONTRARY D ECISION WAS BROUGHT TO OUR NOTICE BY THE LD. D.R. AND SINCE IN THE PRESENT CASE, THE STR IP OF TATA FINANCE LTD. WERE ACQUIRED BY THE ASSESSEE ON 23.03.2000 I.E. MUCH PRIOR TO 15.02.2002, IT HAS TO BE ACCEPTED THAT IN THE FACTS OF THE PRESENT CASE, THIS BOARD S CIRCULAR NO.2 DATED 15.02.2002 IS NOT APPLICABLE AND THEREFORE, THE GAIN IN QUESTION HAS TO BE ASSESSED AS LTCG AND THE ASSESSEE HAS TO BE ALLOWED DEDUCTION U/S 54EC ALSO. WE HOLD ACCORDINGLY. GROUNDS NO.4 & 5 OF THE ASSESSEE ARE ALSO ALLOWED. 11. WE ARE OF THE CONSIDERED VIEW THAT THERE ARE SERIES OF DECISIONS OF THE TRIBUNAL WHEREIN IT HAS BEEN HELD THAT IF THE QUANTUM ADDITION IS DELETED BY THE TRIBUNAL THEN IN SUCH CASES ASSESSEE SHOULD NOT BE VISITED WITH PENALTY U/ S 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULAR S OF INCOME. 12. IN APPEAL BEFORE US, WE OBSERVE THAT OUT OF TOTAL ADDITION OF RS.62,78,505/-, PENALTY ON THE ADDITION OF RS.50,185/- HAS ALREADY BEEN DELETED BY US AND FOR THE REMAINING AMOUNT OF ADDITION I.E. RS.62,28,320/- (RS. 8,79,320/- + RS.53,49,000/-) AS THE QUANTUM ADDITION HAS BEEN DELETED BY THE TRIBUNAL IN ITA NO. 1255/AHD/2006 FOR ASST. YEAR 2002-03 VIDE ORDER DATED 21.06.2013, AND SO NO PENALTY IS TO BE SUSTAINED U/S 271(1)(C) OF THE ACT. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A), WE UPHOLD THE SAME. THIS GROUND RAISED BY THE REVENUE IS DISMISSED. 13. APPLYING THE SAME RATIO TO THE FACTS OF THE PRE SENT CASE OF ASSESSEE, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD . CIT(A) WHO HAS ITA.NO.995/AHD/2008 - 13 RIGHTLY DELETED THE PENALTY U/S 271(1)(C) OF THE AC T. WE UPHOLD THE SAME. THE GROUND RAISED BY THE REVENUE IS DISMISSED. 14. OTHER GROUNDS ARE GENERAL IN NATURE, WHICH NEED NO ADJUDICATION. 15. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON 9 TH JUNE, 2016 AT AHMEDABAD. SD/- SD/- (R.P. TOLANI) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER AHMEDABAD; DATED, 09/06/2016 ! '!/ COPY OF THE ORDER FORWARDED TO : 1. $% / THE APPELLANT 2. &$% / THE RESPONDENT. 3. '(( ) * / CONCERNED CIT 4. ) * ( ) / THE CIT(A)- 5. !-. , ,012 /DR,ITAT, AHMEDABAD, 6. .3 45 / GUARD FILE. ) ' / BY ORDER, ' (0 (ASSTT.REGISTRAR) ITAT, AHMEDABAD ITA.NO.995/AHD/2008 - 14 1. DATE OF DICTATION : 9/6/2016 1. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER : 9/06/2016 2. OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FO R PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 9/6/16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATUR E ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER