Income Tax Appellate Tribunal - Mumbai
Vip Clothing Limited, Thane vs Dcit, Circle- 1, Kalyan on 26 October, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL "F" BENCH, MUMBAI
BEFORE SHRI RAJESH KUMAR, AM AND SHRI AMARJIT SINGH, JM
आयकर अपील सं / I.T.A. No.2889/Mum/2017
(निर्धारण वर्ा / Assessment Year: 2012-13)
VIP Clothing Ltd. (Formerly बिधम/ DCIT, Circle-1,
Known as Maxwell Vs. Kalyan, 1st Floor, Mohan
Industries Ltd.) Plaza, Near Mohan Pride,
VIP Compound, Kon Wayale Nagar, Khadakpada,
Village, Bhiwandi-Kalyan Kalyan(W).
Road, Tal. Bhiwandi, Dist.
Thane, PIN-421302
स्थायी लेखा सं ./जीआइआर सं ./PAN/GIR No. : AABCM1549A
(अपीलाथी /Appellant) .. (प्रत्यथी / Respondent)
Revenue by: Shri Rajeev Gubgotra ( DR)
Assessee by: Subodh L. Ratnaparkhi
सुनवाई की तारीख / Date of Hearing: 03.10.2018
घोषणा की तारीख /Date of Pronouncement: 26.10.2018
आदे श / O R D E R
PER AMARJIT SINGH, JM:
The assessee has filed the present appeal against the order dated 24.01.2017 passed by the Commissioner of Income Tax (Appeals)-2 Aurangabad [hereinafter referred to as the "CIT(A)"] relevant to the AY. 2012-13 in which the penalty levied by the AO has been ordered to be confirm.
2. The assessee has raised the following grounds: -
ITA. No.2889/M/17 A.Y.2012-13 "l. On the facts and in law, the Hon. CIT(A) erred in confirming the penalty of Rs.18,03,832/- levied u/s 271(1)(c) of the Act.
2. On the facts and in law, the Hon. CIT(A) erred in confirming the penalty of Rs.18,03,832/- levied u/s 271(1)(c) of the Act not appreciating that the appellant in the working of capital gains arising on sale of Gobi unit at Erode considered the book value of assets sold for working out the net worth in place of written down of assets as provided by section 50B of the I.T. Act due to a bonafide error and therefore levy of penalty was not justified."
3. The brief facts of the case are that the assessee filed its return of income on 28.09.2012 declaring total income to the tune of Rs.5,67,82,628/-. The assessee showed the income from textile business during the year under consideration. Thereafter, assessment was completed u/s 143(3) of the Act on 30.12.2014 assessing total income to the tune of Rs.6,56,70,810/-. The assessee was involved in manufacturing and selling in hosiery, cotton yarn, garment products and related process activities. One of its unit located at Erode known as Gobi Unit which was sold during the year. The sale transaction took place by way of a slump sale. The working of net worth of the unit sold was called for to determine whether the norms of Section 50B was satisfied or not. Accountant certificate was also called for. There was huge difference between the figure adopted in the computation as long term capital gain arising out of the result of the sale of Gobi Unit and the figure showed by CA certificate. The notice was given.
The CA certificate shows the LTCG to the tune of Rs.6,74,89,924/- whereas the assessee showed the same to the tune of Rs.5,87,21,364/- thus, there was a difference to the tune of Rs.87,68,560/-. The finding no proper reply of the assessee, the said amount was added to the income of the 2 ITA. No.2889/M/17 A.Y.2012-13 assessee and taxed as LTCG. Thereafter, the penalty proceeding was initiated and after the reply of the assessee, the penalty to the tune of Rs.18,03,830/- was imposed. Feeling aggrieved, the assessee has filed the present appeal before the CIT(A) who confirmed the order of the AO, therefore, the assessee has filed the present appeal before us.
4. We have heard the arguments advanced by the Ld. Representative of the parties and perused the record. The contention of the assessee is that the assessee has wrongly considered the book value of his sold unit for working of net worth of the unit in the place of written down value as required for the purpose section 50B of the Act, therefore, it is not a case to levy the penalty. It is also contended that after the realizing of the error, the assessee filed the revised computation of income and corrected the difference of capital gain of Rs.87,68,560/- and offered to tax before completion of the assessment. It is also argued that after the acceptance of revised computation of income, it is not a case of concealment of particulars of income nor furnishing the inaccurate particulars of income, therefore, in the said circumstances, no penalty is leviable in view of the law settled in Price Waterhouse Coopers (P) Ltd. Vs. CIT (2012) 348 ITR 306 (SC), CIT Vs. Nalin P. Shah (HUF) (2013) 40 taxmann.com 86 (Bom), CIT Vs. Somany Evergreen Knits in ITA No. 1332 of 2011 & CIT Vs. Bennett Coleman & CO.Ltd. (2013) 259 CTR 383 (Bom). It is also argued that the disallowance of claim if any raised before the AO nowhere attract the penalty. In view of the law settled in Reliance Petroproducts (supra). However, on the other hand, the Ld. Representative of the Department has refuted the said contention and 3 ITA. No.2889/M/17 A.Y.2012-13 strongly relied upon the order passed by the CIT(A) in question. Keeping in view of argument advanced by the Ld. Representative of the parties and perused the record, we noticed that after the sale of the Gobi unit by the assessee, the assessee has shown the book value for the purpose of calculating the LTCG whereas the assessee should claim written down value of the unit for the purpose of assessing the LTCG. Undoubtedly, as per the Section 50B of the Act, the written down value is required for the purpose of assessing the long term capital gain on account of sale of Gobi unit. The assessee has shown the book value of asset and has also shown the written down value required as per the purpose of section 50B of the Act. The claim of the assessee was not allowable. There was a bonafide mistake on the part of the assessee for calculating the LTCG. Moreover, the assessee has filed the revised return of income which has been accepted by the Department. In view of the revised return of income, we nowhere find any concealment of income or furnishing the inaccurate particulars of income. Taking into account, all the facts and circumstances and in view of the law settled in Price Waterhouse Coopers (P) Ltd. Vs. CIT (2012) 348 ITR 306 (SC), CIT Vs. Nalin P. Shah (HUF) (2013) 40 taxmann.com 86 (Bom), CIT Vs. Somany Evergreen Knits in ITA No. 1332 of 2011 & CIT Vs. Bennett Coleman & CO.Ltd. (2013) 259 CTR 383 (Bom). We are of the view that the finding of the CIT(A) is not justifiable, therefore, we set aside the finding of the CIT(A) and delete the penalty.
4ITA. No.2889/M/17 A.Y.2012-13
5. In the result, the appeal filed by the assessee is hereby ordered to be allowed.
Order pronounced in the open court on 26.10.2018.
Sd/- Sd/-
(RAJESH KUMAR) (AMARJIT SINGH)
ले खध सदस्य / ACCOUNTANT MEMBER न्यधनिक सदस्य/JUDICIAL MEMBER
मुंबई Mumbai; दिनां क Dated : 26.10.2018.
Vijay
आदे श की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to :
1. अपीलाथी / The Appellant
2. प्रत्यथी / The Respondent.
3. आयकर आयु क्त(अपील) / The CIT(A)-
4. आयकर आयु क्त / CIT
5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुंबई / DR, ITAT, Mumbai
6. गार्ड फाईल / Guard file.
आदे शधिुसधर/ BY ORDER, सत्यादपत प्रदत //True Copy// उि/सहधिक िंजीकधर /(Dy./Asstt. Registrar) आिकर अिीलीि अनर्करण, मुंबई / ITAT, Mumbai 5