Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (12) TMI 1897 - ITAT MUMBAILevy of penalty u/s 271(1)(c) - changing the heads of income due to difference of opinion - as per AO assessee has treated the Guest house as his business asset and accordingly, he was claiming depreciation thereon - assessee explained that the mistake has occurred due to wrong understanding of the accountant - CIT(A), deleted the penalty by holding that there was difference of opinion about the nature of Capital gain, i.e., whether it was long term capital gain or short term capital gain and it appears that the assessee was under bona fide belief that it was a long term asset as he was owning the property over a period of three year HELD THAT:- The admitted facts are that the “Guest house” sold by the assessee is a business asset on which depreciation has been allowed. Hence, there is no dispute that the gain arising on sale of the same would be assessable as “Short term capital gain” as per the provisions of sec. 50 of the Act. However, the assessee has treated the same as non-business asset at the time of filing return of income and accordingly computed the long term capital gain. The total income of an assessee for a particular assessment year is computed in accordance with the provisions of the Act by having regard to the accounts of the assessee. Hence, it is imperative on the part of the assessee to compute the total income in accordance with the provisions of the Act. In case of assessee, on which depreciation has been allowed, the provisions of sec. 50 mandate that the gain should be computed as “Short term capital gain” only. The assessee has tried to defend his action by drawing support from the decisions rendered in the case of ACE Builders Pvt Ltd [2005 (3) TMI 36 - BOMBAY HIGH COURT] and Smita Conductors Ltd.[2013 (9) TMI 1056 - ITAT MUMBAI] In our view both the decisions cannot come to the support of the assessee, since they have been rendered in a different context. It is not a case where the assessee has made a claim on some plausible basis, but the same became unacceptable in the eyes of law. It is also not simple case of changing the heads of income due to difference of opinion. On the contrary, the assessee himself has accepted that the gains arising on sale of guest house is assessable as Short term Capital gain. Hence, in our view, the facts of the case show that the assessee furnished inaccurate particulars of income and the explanations furnished by the assessee in that regard were not substantiated. We are not able to agree with the view taken by the CIT(A). We notice that the assessing officer has levied penalty @ 200% of the tax sought to be evaded. In our view, the same appears to be on the higher side. Accordingly, we set aside the order of CIT(A) and direct the AO to sustain the penalty to the extent of 100% of the tax sought to be evaded. Decided in favour of revenue.
|