9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (3) TMI 1033 - AT - Income TaxPenalty u/s 271(1)(c) - computation of short term capital gains on sale of various office premises - WDV taken as per The Companies Act as against Income Tax Act - bonafide computational error - HELD THAT -we find that the genesis of the impugned penalty lies in the wrong computations made by the assessee. The mistake has already been admitted during assessment proceedings. It is observed that the assessee was required to take WDV as per Income Tax Act as against The Companies Act as taken by the assessee and secondly, all the premises were to be considered as single block of assets. Nevertheless, the same could not be termed as furnishing of inaccurate particulars of income which justifies imposition of penalty u/s 271(1)(c). The computational error, at best, be termed as bona fide error on the part of the assessee and the assessee stood benefitted by the judgment in Price Waterhouse Coopers Pvt. Ltd. Vs. CIT 2012 (9) TMI 775 - SUPREME COURT and CIT Vs. Reliance Petroproducts Pvt. Ltd. 2010 (3) TMI 80 - SUPREME COURT . Therefore, we are inclined to delete the same. - Decided in favour of assessee.
Issues:
Appeal against confirmation of penalty u/s 271(1)(c) for inaccurate particulars of income for AY 2010-11. Detailed Analysis: 1. The appeal contested the order of Ld. Commissioner of Income-Tax (Appeals) confirming a penalty of ?5.30 Lacs under section 271(1)(c) for the Assessment Year 2010-11. The appellant did not appear for the hearing, and as per the records, the hearing notices were returned twice with no change of address intimation. The Tribunal proceeded to dispose of the appeal based on the material on record and after hearing the Departmental Representative who supported the penalty imposition. 2. The penalty was imposed due to the assessee's computation of short-term capital gains on the sale of office premises during the assessment. The discrepancy arose from considering the written down value (WDV) of office premises as per The Companies Act instead of the Income Tax Act, and treating each premises as a separate block of assets instead of a single block. This led to an increase in gains from ?72.43 Lacs to ?89.43 Lacs, triggering the penalty under section 271(1)(c). 3. The assessee contended during penalty proceedings that the error was unintentional and realized only during assessment. Despite the bona fide nature of the mistake, the Assessing Officer levied a penalty of ?5.30 Lacs, which was upheld by the first appellate authority and subsequently appealed before the Tribunal. 4. Upon careful consideration, the Tribunal found that the penalty was based on erroneous computations by the assessee, which were admitted during assessment. The mistake in considering WDV as per The Companies Act instead of the Income Tax Act, and treating premises separately instead of collectively, did not amount to furnishing inaccurate particulars of income warranting penalty under section 271(1)(c). The Tribunal deemed the error as a bona fide mistake, citing precedents such as Price Waterhouse Coopers Pvt. Ltd. Vs. CIT and CIT Vs. Reliance Petroproducts Pvt. Ltd., and decided to delete the penalty. 5. Consequently, the Tribunal allowed the appeal, ruling in favor of the assessee and pronouncing the order on 18th March 2019.
|
