Income Tax Appellate Tribunal - Ahmedabad
Shallu Bansal,, Ahmedabad vs The Deputy Commissioner Of Income Tax, ... on 30 April, 2019
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ - अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD - BENCH 'D'
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
AND
SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER
आयकर अपील सं./ ITA No. 30/Ahd/2017
नधा रण वष /Assessment Year: 2008-09
Shallu Bansal DCIT, Cent.Cir.1(3)
Plot No.1497-B Vs Ahmedabad.
Opp: Theosophical Lodge
Rupani Circle
Bhavnagar 364 001.
PAN : AIJPB 8274 G
अपीलाथ / (Appellant) यथ / (Respondent)
Assessee by : Shri B.R. Popat, AR
Revenue by : Shri Kamlesh Makwana, Sr.DR
सन
ु वाई क तार ख/Date of Hearing : 11/04/2019
घोषणा क तार ख /Date of Pronouncement : 30/04/2019
ORDER
PER RAJPAL YADAV, JUDICIAL MEMBER : Assessee is in appeal
before the Tribunal against order of the ld.CIT(A)-5, Ahmedabad dated 6.12.2016 passed for the Asstt.Year 2008-09.
2. Solitary grievance of the assessee is that the ld.CIT(A) has erred in confirming penalty of Rs.3,15,000/- which was imposed by the AO under section 271(1)(c) of the Income Tax Act, 1961.
3. Brief facts of the case are that the assessee has filed her return of income for the Asstt.Year 2008-09 on 30.7.2008 declaring total income at Rs.13,94,510/-. In this return of income the assessee has included a sum ITA No.30 /Ahd/2017 -2- of Rs.10,19,405/- as short term capital gain. The case of the assessee was selected for scrutiny assessment. The ld.AO has observed that this short term capital gain was shown by the assessee on purchase and sale of shares and these transactions were entered through M/s.Mahasagar Securities P.Ltd. The said Mahsasagar Securities has been claimed to be sub-broker of NSE and transaction rooted through them were found to be bogus. Hence, the AO did not accept the claim of short term capital gain. He made addition on account of unexplained cash credit under section 68 of the Act. Conclusion and computation made by the AO in the assessment order read as under:
"In view of the above, the entire transaction of short term capital gain from shares is bogus. Thus, the gain from such transactions is also bogus. Thus, the Short Term Capital Gain amounting to Rs. 10,19,4057- is disallowed and treated as cash credit u/s 68 of the IT Act. Penalty u/s. 271(l)(c) is initiated for furnishing inaccurate particulars of income and thereby concealing taxable income.
(Disallowances of Rs. 10,19,405/-)
6. Subject to above and from the data made available, the total income of the assessee is computed as under:-
I Income from Capital Gains as per return Rs. Rs. 3,00,973/-
13,20,378/-Less: STCG treated as bogus as per Para 5 above : Rs. 10,19,405/-
II Income from profits and gains Rs. 1,73,584/-
from business/ profession as per return III Income from other sources as per return Rs.
551/-Add:
Disallowances per para 5 Rs. 10,19,405/- Rs. 10,19,956/-
Gross Total Income Rs. 14,94,513/-
Less: Deduction under Chapter-VI-A:-
ITA No.30 /Ahd/2017
-3-
1) U/s. 80C ..... 1,00,000/- Rs. 1,00,000/-
Total income Rs. 13,94,513/-
Rounded off Rs.13,94,510/-
Assessed Income ..... Rs.13,94,510/-
4. The AO has initiated penalty proceedings under section 271(1)(c) of the Act for furnishing inaccurate particulars of income. He ultimately imposed penalty of Rs.3,15,000/- on this addition. Appeal to the CIT(A) did not bring any relief to the assessee.
5. In principle, the ld.counsel for the assessee did not dispute for visiting the assessee with penalty, but contended that as per sub-clause
(iii) of section 271(1)(c) of the Act, penalty would be computed on the amount which is added to the income of the assessee. The assessee has already included a sum of Rs.10,19,405/- under different head i.e. "short term capital gain". The AO has only changed the head from short term capital to unexplained cash credit. Now, how this total amount on which the assessee has already paid taxes under the head short term capital gain can be considered for visiting the assessee with penalty. He submitted that if there is any variation in the taxes on this addition, only to that extent penalty could be computed. In support of his contentions, he relied upon the following decisions:
i) Simran Singh Gambhir Vs. DDIT (International Taxation), 69 taxmann.com 357 (Delhi-Trib);
ii) CIT Vs. Amit Jain, 351 ITR 74 (Delhi);ITA No.30 /Ahd/2017 -4-
iii) CIT Vs. Bennett Coleman & Co. Ltd., 33 taxmann.com 227 (Bom)
6. On the other hand, the ld.DR relied upon the orders of the Revenue authorities.
7. We have duly considered rival submissions and gone through the record carefully. Sub-clause (iii) of section 271(1)(c) of the Act has direct bearing on the controversy. Therefore, we deem it appropriate to take note of this clause, which reads as under;
"271. Failure to furnish returns, comply with notices, concealment of income, etc. ** ** ** ** ** ** ** ** **
(iii) in the cases referred to in Clause (c) or Clause (d), in addition to tax, if any, payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or fringe benefit the furnishing of inaccurate particulars of such income or fringe benefits:
8. A bare perusal of this clause would indicate that it provides a mechanism for computation of penalty. It contemplates that penalty will be computed either equivalent to the tax or three times of such taxes which sought to be evaded by an assessee by reason of concealment of income or furnishing of accurate particulars of income. In other words, the tax on the addition made to the income of an assessee are to be considered as sought to be evaded by reason of concealment or furnishing of inaccurate particulars, the penalty equivalent to that taxes or three time of that tax is to be computed against an assessee. In the present case, the assessee has offered short term capital gain on the ITA No.30 /Ahd/2017 -5- amount of Rs.10,19,405/-. The AO treated it as unexplained cash credit.
But this amount has suffered taxes, in the return of income itself by admission of the assessee. Thus, we direct the AO to calculate the penalty under sub-clause (iii) of section 271(1)(c) if any tax was sought to be evaded by the assessee by taking this addition under two different heads. In other words, the difference of tax components, if this amount of Rs.10,19,405/- is being assessed under the head unexplained cash credit vis-à-vis short term capital gin, comes out, then penalty equivalent to that tax component would be charged from the assessee. In any away, it will not be Rs.3,15,000/-. This exercise be carried out after hearing the assessee.
9. In the result, appeal of the assessee is partly allowed.
Pronounced in the Open Court on 30th April, 2019.
Sd/- Sd/- (PRADIP KUMAR KEDIA) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER