Income Tax Appellate Tribunal - Ahmedabad
Shri Manish Krishnakant Shah,, ... vs The Dy.Cit, Gandhinagar Circle,, ... on 30 August, 2017
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ 'बी' अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
" B " BENCH, AHMEDABAD
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BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER
And SHRI MAHAVIR PRASAD, JUDICIAL MEMBER
आयकर अपील सं./I.T.A. No. 2946/Ahd/2014
( नधा रण वष / Assessment Year : 2010-11)
Shri Manish Krishnakant Shah बनाम/ The DCIT
553/1, Saurabh Society Vs. Gandhinagar Circle
Sector - 23, Gandhinagar
Gandhinagar - 382023
थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AFDPS 6936 F
(अपीलाथ /Appellant) .. ( यथ / Respondent)
अपीलाथ ओर से / Appellant by : Shri Manish Rajvaidya, A.R.
यथ क ओर से/Respondent by : Shri Mudit Nagpal, Sr. D.R.
ु वाई क तार ख /
सन Date of Hearing 25/07/2017
घोषणा क तार ख /Date of Pronounce ment 30/08/2017
आदे श / O R D E R
PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER :
This is an appeal by the assessee against the order of the Commissioner of Income Tax(Appeals)- Gandhinagar, dated 11/08/2014, for confirming the penalty under section 271(1)(c) of the Act Assessment Year (AY) 2010-11, on the following Grounds:
i. The learned CIT(A) has erred in law and on facts while confirming the penalty of Rs. 4,00,000/- made by learned DCIT while considering the interest expenses whether Interest has been claimed under the head of income from business or profession or under head as income from other sources while not considering the facts of the case of the appellant.ITA No.2946/Ahd/2014
Shri Manish Krishnakant Shah vs. DCIT Asst.Year -2010-11 -2- ii. (a) Original Return was filed by taking head wise income from profit and loss account directly.
(b) Under head 'Income from Business profession' - Derivative Loss of Rs.16,74,542/- is shown
(c) Under head 'Income from other sources' Interest paid of Rs.12,53,5447- is claimed
(d) Deduction claimed by assessee on the basis of legal advice given by his consultation and he has furnished all details relating to income and expenditure but expense is claimed in different head. It cannot be held that there was any malafide intension of assessee to conceal income.
(e) When your appellant come to know that above genuine bonafide mistake, revised return become time barred on 31/03/2013.
(f) Your appellant has accepted genuine bonafide mistake, in first submission to the AO dated 20/09/2012. Matter of the same is as under:
"In connection with the above, I am submitting herewith RECOMUTATION OF INCOME, in which Interest paid of Rs.12,53,544/- is considered as business expenses instead of previously it was treated as income from other sources.
1. By that my taxable income will increase from Rs.9,54,490/- to 21,82,500/-.
2. Tax payable increase from Rs. 1,96,057/- to Rs. 5,75,513/-.
3. Refund decrease from Rs. 3,86,943/- to Rs.7,487/- (after considering TDS of Rs.5,83,000/-).
4. Carried forward Business loss increase from Rs.11,81,097/- to Rs.23,44,123/-.
Other CIF loss of STCG Rs.2,80,021/-and GIF Speculation loss Rs.18,014/-remain same.ITA No.2946/Ahd/2014
Shri Manish Krishnakant Shah vs. DCIT Asst.Year -2010-11 -3-
2. The relevant facts as culled out from the materials on record are as under:-
The assessee is engaged in trading and investment activity of shares and securities. The return of income in this case was e-filed on 22/09/2010, declaring total income of Rs.9,54,490/-. Subsequently, the case was selected for scrutiny and the assessment u/s.143(3) was completed on 11/01/2013 determining total income at Rs.21,82,500/-.
2.2 During the assessment proceedings, it was noticed that, the assessee had claimed loss under the head income from other sources and had set off the same against the salary income of Rs.22,97,500/- and arrived at the gross total income of Rs.10,69, 494/-.
2.3 The assessee had borrowed funds for its share trading activities.
He had substantial turnover in derivative segment and throughout the year funds were used for derivative business. On perusal of bank accounts and after considering his activities it was observed that borrowed funds were used for its share trading activities. He was having interest income of only Rs,47,613/- and was not having any other income except salary income. The borrowed funds on which interest of Rs.12,53,544/- was paid were used only for business of derivatives & thus the business loss increased by Rs.12,53,544/-. As provided in section 71(2A) when there is a loss under the head business or profession and when there is income under the head salary it cannot be set off against the salary income. Accordingly, Rs.12,53,544/- was not allowed to be set off against salary income as in statement of income. The ITA No.2946/Ahd/2014 Shri Manish Krishnakant Shah vs. DCIT Asst.Year -2010-11 -4- assessee treated it as loss under income from other sources only with an intention of set off against salary income by giving colorable device. As per the AO same was not permitted in the I.T. Act. Therefore, penalty u/s.271(1)(c) of the Act was levied for furnishing the inaccurate particulars of the income.
3. Against the said order assessee preferred fist statutory appeal before the leaned CIT(A). Learned CIT(A) dismissed the appeal of the assessee.
4. Now appellant's appeal is before us.
5. We have heard both the parties and gone through the impugned order. Learned AR stated that assessee claimed deduction under the bonafide mistake that he is entitled to get deduction on the basis of legal advice given by his consultant and he has furnished all details of capital gain alongwith return of income and he also cited a judgment of CIT vs. Amar Nath [2008] 173 taxman 395 (Punj.& Har). In this case, "it cannot be held that there was any mala fide intention of assessee to conceal income."
5.2 AR has further cited a judgment of CIT vs. Reliance Petroproducts [2010] 3 Taxmann.com 47, in which following observation were made in Section 271(1)(c) applies where the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income." The present was not a case of concealment of income. As ITA No.2946/Ahd/2014 Shri Manish Krishnakant Shah vs. DCIT Asst.Year -2010-11 -5- regards the furnishing of inaccurate particulars, no information given in the return was found to be incorrect or inaccurate. The words 'inaccurate particulars' means that the details supplied in the return are not accurate, not exact or correct, not according to truth or erroneous. In the absence of a finding by the Assessing Officer that any details supplied by the Assessee in its return were found to be incorrect or erroneous or false, there would be no question of inviting penalty under section 271(1)(c).
6. In the present case, assessee has furnished all the details relating to income expenditure but expense claimed in different head when he came to know about the error then he rectified his omission. We are of the considered opinion that in this case penalty cannot be levied. Therefore, we allow the appeal of the assessee.
7. In the result, appeal filed by the assessee is allowed.
This Order pronounced in Open Court on 30/08/2017
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(PRADIP KUMAR KEDIA) ( MAHAVIR PRASAD )
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 30/08/2017
Priti Yadav, Sr.PS
ITA No.2946/Ahd/2014
Shri Manish Krishnakant Shah vs. DCIT
Asst.Year -2010-11
-6-
आदे श क त"ल#प अ$े#षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबं'धत आयकर आयु)त / Concerned CIT
4. आयकर आय)
ु त(अपील) / The CIT(A)-Gandhinagar.
5. ,वभागीय /त/न'ध, आयकर अपील य अ'धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड4 फाईल / Guard file.
आदे शानुसार/ BY ORDER, स या,पत /त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad True Copy
1. Date of dictation ..28/08/2017 (dictation-pad 4 pages attached at the end of this appeal- file)
2. Date on which the typed draft is placed before the Dictating Member ...28/08/2017
3. Other Member...
4. Date on which the approved draft comes to the Sr.P.S./P.S 29/08/2017
5. Date on which the fair order is placed before the Dictating Member for 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.....................
8. Date on which the file goes to the Head Clerk..........................................
9. The date on which the file goes to the Assistant Registrar for signature on the order..........................
10. Date of Despatch of the Order..................