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TMI Blog2015 (2) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty on the disallowance of Long term Capital Loss on repurchase of US 64 units of Unit Trust of India, without giving adequate opportunity to the Appellant, on the alleged ground that no satisfactory evidence was furnished for the same. II. The Appellant prays that it be held that no adequate opportunity had been given to it and hence the order passed u/s. 271 (1) (c) of the Act be held as ab-initio and/or otherwise void and bad-in-Law. WITHOUT PREJUDICE TO THE ABOVE GROUND II: 1. On the facts and circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in levying penalty of Rs. 66,36,077/- u/s section 271(1)(c) of the Act on the alleged ground that there was concealment of income and that the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scussed the case with the AIR of the appellant. A.O. in the penalty order has mentioned that in response to notice dated 08.03.2010 fixing the case for hearing on 17.03.2010 neither anybody attended nor any submission have been filed. The appellant submits that the said notice was received by it on 23.03.2010. However, before me the appellant failed to furnish any evidence in support thereof. The order has been passed on 29.03.2010 and before that there was no communication from the appellant and hence in my opinion there is no discrepancy in the findings given by A.O. The appellant has relied on the decision of Hon'ble [TAT in the case of Mahesh Lunch Home (supra). However, on perusal of this judgment it is noted that the issue there r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. as short term capital loss and was allowed to be carried forward. Accordingly. the A.O. levied minimum penalty of Rs. 66,36.077/- treating that the assessee has deliberately furnished inaccurate particulars of its income and sought to evade income to the extent of Rs. 6,34,72.767/-. 3.2 During the course of appellate proceedings the appellant has furnished written submissions wherein it has been submitted that capital gains on the conversion of subject US 64 units into US 64 tax free bonds should be computed under normal provisions u/s45( I) and not u/s.4S(6) of the I.T.Act. Appellant further submitted that US 64 units are capital asset to the appellant within the meaning of section 2( 14) of the Act which exc1udes from the ambit ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted by the CIT(A)-X in quantum appeal, hence even in such case there was no question of levying any penalty. In this respect appellant relied on the following decisions: i. CIT Vs. Mithalal Ramachandra, 82 ITR 470 ii. CIT Vs. Indo American Electricals Ltd. 45 CTR 146 iii. Hindustan Steel Ltd. Vs. State of Orissa, 83 ITR 26 iv. Yasmin Properties (P) Ltd. 46 ITD 331 v. D.M. Dahanukar Vs. CIT, 65 ITR 280 vi. ITO Vs. H.A. Sodhan (Greater HUF) 17 ITD 479 (Ahd.) vii. CIT Vs. Indian Metals & Ferro Alloys Ltd. 211 ITR 35 (Ori.) viii. Nuchem Ltd. Vs. DCIT. 47 ITD 487 (Del.) ix. Associated Cement Companies Ltd. Vs. DCIT, 40 ITD 70 (80m.) In view of these submissions, appellant prayed that penalty levied u/s.271 (I )(c) amounting to Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included. Now, clause (33) specifically refers to income arising from transfer of capital assets, being units of US 64. Thus, section 10 is an exemption clause and not a deduction. Any income of the type defined in clause (1) to (36) of that section will not be included in the total income. Now it is a well accepted proposition that under the Income Tax Act, the word "income" includes "loss". In other words, any income/loss on transfer of US 64 assets would be exempted from being included in the computation of total income. In the circumstances, I fail to understand how the assessee can argue that section 10(33) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29.9.2008 it was held that the object behind enacting section 271(1)(c) read with explanation indicates that the said section has been enacted to provide a remedy for loss of revenue. Penalty u/s. 271(1)(c) is a "civil liability". Willful concealment is not essential ingredient for attracting a civil liability as in the matter of prosecution u/s. 276C. Thus, it may be noted that the appellant has failed to offer an explanation before the A.O. by way of not responding to penalty notice u/s.271(1)(c). Even during the course of appellate proceedings it failed to prove that its action to claim loss was bonafide. In view of these facts and legal position. I am of the considered opinion that the penalty u/s.271(1)(c) has rightly been imposed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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