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TMI Blog2014 (4) TMI 857X X X X Extracts X X X X X X X X Extracts X X X X ..... nse to the notice u/s 148 of the Act had paid LTCG tax and interest - the AO ought not to have imposed any penalty in exercise of the discretion vested in him – Decided in favuor of Assessee. - I.T.A.No. 720/2007 and I.T.A.No. 719/2007 - - - Dated:- 4-4-2014 - Dilip B Bhosale And B Manohar, JJ. For the Appellant : Sri A Shankar and Sri M Lava, Advs. For the Respondent : Sri K V Aravind, Adv. JUDGEMENT Per: Dilip B Bhosale: 1. These two Income Tax Appeals, filed under Section 260-A of the Income Tax Act, 1961, (for short the Act ), arise from the common order dated 18.05.2007, whereby, ITA No.836/2006 pertaining to the Assessment year 2003-04, has been dismissed by the Income Tax Appellate Tribunal, Bangalore Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA No.720/2007. 5. The appellant had filed return of income on 30.09.2003. In the return, he left a note regarding capital gain stating that he deposited the said amount in his savings account with Vijaya Bank. He did not open capital gain account as contemplated by Section 54-F(4) of the Act. In view thereof, the Assessing Officer reopened the assessment under Section 148 of the Act to bring to tax the capital gains on the ground that the bank account, in which the amount was deposited was not capital gains scheme account. The assessee, in the return of income had declared Rs.24,57,000/- as capital gains liable to tax and paid the tax accordingly with interest, in response to the notice under Section 148 of the Act. The assessment, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation into Capital Gains account. However, the sale consideration has been used for investment for purchase of vacant land. The bank account i.e., Vijaya Bank transaction has been reflected in my statement of accounts. 4. I have co-operated with the department by paying the tax promptly before the assessment could be completed in order to obtain peace of mind. 5. I would like to mention here that I have purchased a property by entering into an agreement of sale with Smt.B.J.Prema on 15-10- 2003 for Rs.23 lakh. But, unfortunately to my bad luck the property is under litigation among the family members of Smt.B.J.Prema who have brought stay on the property. Though the title of the property is very clear and B.J.Prema wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mposed mainly on two grounds. Firstly, the assessee had not complied with the conditions laid down by Section 54(2) of the Act by way of depositing long term capital gain in a specified account before the date of filing of return of income under Section 139 (1) of the Act, and secondly, during the course of assessment proceedings and till the completion of the same, the assessee had not furnished any information regarding court matter-litigation against the purchase of new property. The Assessing Officer also noticed that the assessee had not invested the amount for purchase of residential property. These findings of the Assessing Officer were confirmed by the first Appellate Authority and then by the Tribunal. 8. At the outset, we find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id amount in his savings account with Vijaya Bank. However, it is not in dispute that he paid Rs.26,70,000/- to the owner of the property from the said account. Having considered the overall facts and circumstances of the case, in our opinion, the Assessing Officer ought to have exercised the discretionary powers, while considering to impose penalty under Section 271(1)(c). That apart, the assessee in response to the notice under Section 148 of the Act had paid LTCG tax and interest. In our opinion, against this backdrop, this is a fit case where the Assessing Officer ought not to have imposed any penalty in exercise of the discretion vested in him. The order imposing penalty, thus deserves to be set-aside. Order accordingly. No order as to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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