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TMI Blog2015 (11) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. is liable to be taxed. The Hon'ble Bombay High Court in the case of M/s. Bennett Coleman & Co. Ltd.(2013 (3) TMI 373 - BOMBAY HIGH COURT) held that where there is only a change of head of income and in the absence of facts to show that the claim of the assessee was not bonafide, penalty under section 271(1)(c) of the Act is not maintainable. On this count also, we find that the penalty imposed under section 271(1)(c) in the present case is unsustainable. - Decided in favour of assessee. - ITA No. 210/Mum/2015, ITA No. 211/Mum/2015 - - - Dated:- 30-9-2015 - G S Pannu, AM And Sanjay Garg, JM For the Petitioner : Shri Sanjay Sanghavi Ashish Mehta For the Respondent : Shri Yogesh Kamat ORDER Per G. S. Pannu, AM The captioned are two appeals relating to two individuals of the same family and involve a common issue. The appeals are directed against separate but similarly worded orders of the CIT(A) dated 26/12/2014, whereby the penalty levied by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961 (in short 'the Act') for assessment year 2009-10 vide respective orders dated 12/3/2013 have been affirmed. Since the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the order of CIT(A), assessee is in further appeal before us. 4. Before us, the Ld. Representative for the assessee has assailed the levy of penalty on facts and in law. It is sought to be pointed out that in the return of income filed, assessee had made complete disclosure of the receipt as a capital receipt and, therefore, there was no concealment. Secondly, it is pointed out that the addition made by the Assessing Officer by invoking section 28(va) of the Act was merely based on an interpretation of law, which was in variance with that of the assessee. According to the appellant, at the time of filing of the return of income the decision of Mumbai Bench of the Tribunal in the case of Mrs. Hami Aspi Balsara Vs. ACIT, 126 ITD 100(Mum) supported the stand of the assessee and, therefore, the claim made by the assessee in the return of income was a bona-fide claim. Thirdly, it is pointed out that it is a case where a claim made in the return of income had been found to be unsustainable and, no penalty under section 271(1)(c) of the Act is leviable having regard to the judgment of the Hon'ble Supreme Court in the case of CIT vs. Reliance Petro Products Ltd., 322 ITR 158(S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so far as the merit of the said stand of the Assessing Officer is concerned, the same is not the issue before us. What we are concerned is the purported satisfaction of the Assessing Officer that it is a fit case for levy of penalty under section 271(1)(c) of the Act on the ground that the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income. In this context, we may briefly touch upon the claim made by the assessee in the return of income and the manner in which it did not find favour with the Assessing Officer in the quantum assessment proceedings. Briefly put, the relevant facts are that assessee is one of the directors of a company called Chemito Technologies Pvt. Ltd. since 1/7/1983. The said concern is engaged in the manufacture and assembling of various types of laboratory equipments. The said concern sold one of its Division called 'analytical technologies and instrumentation' to M/s. Termo Electron LLS India Pvt. Ltd. on slump sale basis vide agreement dated 27/5/2008 for a consideration of ₹ 58,00,00,000/-. In the said agreement there was a Non-Compete clause, in terms of which the seller for an agreed perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 5.00 crores received from M/s. Termo Electron LLS India Pvt. Ltd. was chargeable to tax as a long term capital gain was a bonafide claim or not. In support of the bonafides of assessee's claim, it has been asserted before us that at the time of filing of the return of income the decision of the Mumbai Bench of the Tribunal in the case of Mrs. Hami Aspi Balsara(supra) dated 22/5/2009 was prevailing which was in favour of assessee's stand. In the said decision, the Tribunal was dealing with receipt of Non-Compete fee for assessment year 2005-06, which was after insertion of section 28(va) of the Act, and yet it was held that the Non-compete fee was chargeable to tax under the head 'capital gains', having regard to the facts and circumstances of the case. In the said decision, the Tribunal observed that the Provisions of section 28(va) would be attracted, where the Non-Compete fee was received by the assessee who was carrying on business and not where assessee only had a right to carry on business in the form of a capital asset. On the strength of the aforesaid, the point made out by the assessee is that the business which has been transferred was being carrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greed with the earlier rulings has been pronounced on 13/02/2012, which is much after the return of income filed by the assessee on 30/07/2009. Therefore, in our view, the return of income filed by the assessee claiming the impugned sum as a long term capital gain cannot be construed as a claim made 'to avoid taxability of the business income', as charged by the Assessing Officer in the impugned penalty order. 6.5 Pertinently, the scenario can also be looked at from another angle, which is based on a parity of reasoning laid down by the Hon'ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd. (supra). As per Hon'ble Supreme Court, where no information given in the return of income is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. As per the Hon'ble Supreme Court, mere making of wrong claim in the return of income would not tantamount to furnishing of inaccurate particulars of income. Quite clearly, in the present case, there is no charge much less a finding by the Revenue that any of the particulars regarding the receipt of ₹ 5.00 crores from M/s. Termo Electron LLS India Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation before us stands on a different footing. The Hon'ble Supreme Court explained that in the course of examining the efficacy of penalty imposed under section 271(1)(c) of the Act, the question to be examined is whether the assessee has offered any explanation for concealment of particulars of income or furnishing of inaccurate particulars of income. As per Hon'ble Supreme Court, the Explanation to section 271(1) of the Act raises a presumption of concealment when a difference is noted by the Assessing Officer between the reported and assessed income; that in such a situation the burden is on the assessee to show otherwise, on the basis of any cogent and reliable evidence. The Hon'ble Supreme Court further explained that when assessee discharges such initial onus, then the burden shifts on the Revenue to show that the amount in question constituted an income and not otherwise. Hon'ble Supreme Court applied the aforesaid proposition to the facts of the case before it and found that the penalty under section 271(1)(c) of the Act was exigible. So however, in the context of the factual matrix which is before us, the penalty under section 271(1)(c) of the Act cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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