Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (4) TMI 1262 - ITAT HYDERABADLevy of penalty u/s 271 (1)(c) - scope of deliberate default - cost of acquisition for the computation of long term capital gains - debatable issue - HELD THAT:- Assessee during the course of the penalty proceedings for concealment to file documents as well as to give explanations which were not given in the assessment proceedings. Merely because an addition has not been contested, it cannot be presumed that the addition represents concealed income. It has been held by the Supreme Court in the case of Sir Shadilal Sugar & General Mills Ltd. [1987 (7) TMI 3 - SUPREME COURT] that from the assessee agreeing to additions to his income, it does not follow that the amount agreed to be added was concealed income. There may be a hundred and one reasons for such admission. Hence in the present case, even though the Hon’ble ITAT has confirmed the appeal on merits (though admitted by the Hon’ble High Court) the penalty proceedings stand under a different footing and is not automatic. Penalty for concealment is not imposable where there are two views on the issue: If the issue is a debatable one and two views are possible, penalty for concealment cannot be levied. It was held by the Rajasthan High Court in the case of CIT vs. Harshvardhan Chemicals & Minerals Ltd, reported [2002 (5) TMI 15 - RAJASTHAN HIGH COURT] that where the wrong deduction has been claimed by the assessee but the issue is debatable, it could not be said that there was concealment of income. The claim of deduction made by the assessee can be described as inaccurate computation of income for which penalty for concealment cannot be levied. The above decisions are in line with that of the Supreme Court in the case of CIT vs. Reliance Petroproducts Ltd. [2010 (3) TMI 80 - SUPREME COURT] where it was held that where the claim of deduction of interest was disallowed, it would be insufficient for levy of penalty for concealment as an incorrect claim does not amount to furnishing inaccurate particulars. Where a claim is made in the return of income it is up to the authorities to accept the claim when all particulars had been furnished. To conclude in the present case, the assessee has disclosed all the material facts before the AO and also the explanation offered by the assessee as to why FMV on the date of exercise was considered as cost of acquisition for the computation of long term capital gains in the return of income filed for the relevant A.Y.is bonafide. - Decided in favour of assessee.
|