2016 (8) TMI 901 - AT - Income Tax

Penalty levied u/s.271(1)(c) - undisclosed Short Term Capital Gain - Held that - It is not in dispute moreover admitted by the assessee also that the assessee failed to show the sale account to the tune of ₹ 8 lakhs in his return. Undoubtedly, there is no explanation on record as to why the said amount of ₹ 8 lakhs was not reflected in the return of income resultantly the assessee did not show the Short Term Capital Gain to the tune of ₹ 8 lakhs. It is clear case wherein the assessee did not disclose an amount of ₹ 8 lakhs in his return. Making the statement before the tax authority nowhere justify the claim of the assessee because it is not a case of the recovery of unaccounted cash / other articles such as jeweler etc. In simple sense, the assessee did not show the said amount as income in his return which came into existence only after the search was conducted on the assessee. There is no cogent and convincing evidence on record to which it can be assumed that the learned CIT(A) has passed the order wrongly and illegally. No distinguishable facts to the finding of the learned CIT(A) has been produced on record. In view of the above said discussion we are of the view that the learned CIT(A) has passed the order judiciously and correctly - Decided against assessee

Summary

Issues:
Challenge against the confirmation of penalty under section 271(1)(c) of the Income Tax Act, 1961 for Assessment Year 2001-02.

Detailed Analysis:

Issue 1: Challenge against Penalty Confirmation
The appellant contested the penalty of ?4,88,438 levied under section 271(1)(c) of the Act. The Assessing Officer found that the appellant had claimed a Long Term Capital Loss of ?6,78,228 on the sale of flats, which was inaccurate as the period of holding was less than 3 years. The AO concluded that the appellant had concealed income by not disclosing a Short Term Capital Gain of ?8 lakhs received in cash from the sale of flats. The appellant admitted to receiving this amount only after a search was conducted. The CIT(A) upheld the penalty, stating that the appellant furnished inaccurate particulars of income and concealed the nature of capital gain. The total income concealed was found to be ?14,78,228, leading to a penalty of ?4,88,438.

Issue 2: CIT(A) Findings
The CIT(A) determined that the appellant only concealed the ?8 lakhs received in cash as Short Term Capital Gain. Explanation 4(c) to section 271(1)(c) was applied to recompute the penalty. The CIT(A) noted that the appellant failed to show this amount in the return, and there was no explanation for this omission. The appellant's argument that the amount was not reflected due to the search was deemed unjustified. The CIT(A) concluded that the penalty was correctly imposed as the appellant did not disclose the cash amount as income in the return, which emerged only post-search. The decision of the CIT(A) was deemed judicious and correct, with no compelling evidence presented to challenge it.

Conclusion
The appeal filed by the assessee was dismissed, upholding the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961. The judgment was pronounced on 8th July 2016 by the Appellate Tribunal ITAT Mumbai, affirming the CIT(A)'s decision regarding the penalty for concealment of income.