9911796707
TMI Blog1976 (1) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... Umedmal Abheymal and at the time of partition, the assessee received 2000 shares worth Rs. 2,50,000. Besides this the assessee was already holding shares worth Rs. 3,92,400. The value of all such shares was Rs. 6,42,400. The assessee disposed of the entire shares for a consideration of Rs. 7,94,875, thus resulting in a capital gain of Rs. 1,52,475. The assessee did not show any capital gains in the return of income filed by him. Thus the ITO required the assessee to furnish and explain the reasons as to why the capital gains may not be taxed in his hands. In reply, the assessee explained that Shri Sobhagmal Lodha was holding certain shares of Mewar Textile Mills Ltd. since its very inception, i.e., 1937, and all the shares of this Mill wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to your above notice we have to submit as under :-- 1. That the penalty notice seems to have been issued for taxing 'Capital gains' of Rs. 5,836 on sale of shares against which the assessee begs to submit as under :-- A. That the facts of the sale of shares was duly explained to the Income Tax Adviser Shri S.K. Jain who after calculation came to the conclusion that capital gains being below Rs. 5,000 the same need not be shown. B. That he calculated the capital gains taking the cost of all the shares at Rs. 125 which was the purchase price to him for 2000 shares only. C. That out of total 6359 shares 4359 shares were old but cost of the same was also calculated at Rs. 125 instead of the price prevailing at that time. 2. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd obliged." 4. The learned ITO after considering the explanation of the assessee was of the view that the assessee has wilfully concealed particulars of his income concerning capital gains and as such the provisions of s. 271(1)(c) are attracted. Thus he imposed a penalty of Rs. 5,836 under s. 271(1)(c) of the Act. 5. Before the learned AAC, in appeal, inter alia, it was contended that there was no concealment of income by the assessee and as such the learned ITO erred in imposing the penalty under s. 271(1)(c); that the assessee had disclosed all the figures of sales of the shares; that according to the assessee there was no capital gain; that even if there was any capital gain, the assessee vide his letter of 5th Aug., 1970 had pointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f as on 1st Jan., 1954 was clearly and un-ambiguously Rs. 7,73,200 and capital gains were apparently to the extent of Rs. 21,675 which figure the assessee has himself worked out as per letter dt. 5th Aug., 1970 and therefore it is quite obvious that while filing the return the assessee had not furnished the correct particulars of his total income and had in fact concealed income under the head capital gains. Non-disclosure of this income in the return or the same having been pointed out by the assessee to the ITO unless the ITO raised a specific enquiry to this effect certainly leads to the existence of mens rea. In view of all these facts, the penalty order is accordingly confirmed." 6. Before us on behalf of the assessee more or less the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee gave all the details regarding the purchase and sales of the shares in the letter dt. 5th Aug., 1970, the copy of which is in the paper book. According to the assessee capital gains were to the tune of Rs. 5,836 and the same may be taxed. As a matter of fact, the letter dt. 5th Aug., 1970 was in the nature of a revised return. After this letter was received by the ITO, he issued a letter on 4th Feb., 1971 in which it was stated that from the balance sheet he found that the assessee owned shares of Satish Motors, Sobhag Agency and Edward Mills. The ITO made other enquiries. As discussed above, before this enquiry was started by the ITO, the assessee had already brought to the notice of the learned ITO all the facts in respect of sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee came to know that there was some capital gain he filed revised return much before the assessment was completed. We may also point out that there is nothing on the record from which it could be said that the ITO detected that there was capital gains. Before the ITO could detect that there were capital gains, the assessee furnished revised return. Thus from every point of view, it could not be said that there was any concealment of income by the assessee or the assessee furnished inaccurate particulars of his income. Thus, in our opinion to the present case the provisions of s. 271(1)(a) are not attracted. 10. The learned counsel for the assessee also raised objection that the karta had expired on 15th Jan., 1969 and as such the HUF ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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