2015 (12) TMI 552 - AT - Income Tax

Penalty under section 271(1)(c) - unexplained cash credit - CIT(A) deleted addition - Held that - The major addition which was made by the AO was on account of unexplained cash credit in the form of sale of shares which was duly shown in the return of income by the assessee as long term capital gain subject to tax @ 10% under section 112 of the Act, whereas the co-ordinate Bench in assessee s own case for AY 2004-05has held it to be a short-term capital gain and to be taxed accordingly, which means that necessary details and information were provided in the income-tax return except the proper head of income which was short term capital gain but was shown as long term capital gain by the assessee. Such a mistake cannot be construed as a concealment of income u/s 271(1)(c). Therefore, in view of above, as well as relief given by co-ordinate Bench to the assessee in assessee s own case for AY 2004-05 against the order of AO u/s 143(3), we do not find any reason to interfere with the order of CIT(A). We uphold the same. - Decided against revenue

Summary

Issues Involved:
Penalty under section 271(1)(c) of the Income-tax Act for concealment of income.

Analysis:
1. The Revenue filed an appeal against the order of CIT(A) deleting the penalty imposed under section 271(1)(c) for Assessment Year 2004-05. The penalty was initiated based on additions made during assessment, including unaccounted stock sales, unexplained cash deposits, low household withdrawals, and unexplained cash credits from the sale of shares.

2. The AO imposed a penalty of Rs. 3,41,826, representing 100% of the tax sought to be evaded. The CIT(A) later quashed this penalty, leading to the Revenue's appeal before the Tribunal.

3. The Tribunal analyzed each addition made by the AO during assessment and referred to a previous decision in the assessee's own case for the same assessment year. The Tribunal noted that the co-ordinate Bench had partially allowed the assessee's appeal, indicating discrepancies in the AO's additions.

4. Upon reviewing the facts and the previous decision, the Tribunal found that the major addition of Rs. 10,01,450 on unexplained cash credits from the sale of shares was treated as a short-term capital gain instead of long-term capital gain. The Tribunal concluded that the necessary details were provided in the income-tax return, and the misclassification did not amount to concealment of income under section 271(1)(c).

5. The Tribunal upheld the CIT(A)'s decision to delete the penalty, considering the relief granted in the assessee's own case and the nature of the additions made during assessment. The Tribunal dismissed the Revenue's appeal, stating that there was no reason to interfere with the CIT(A)'s order.

6. The Tribunal dismissed the Revenue's appeal, stating that the grounds raised were of a general nature and did not require further adjudication. The decision was pronounced in open court on 9/10/2015.