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TMI Blog2016 (2) TMI 754X X X X Extracts X X X X X X X X Extracts X X X X ..... nue has urged the following question of law for our consideration:- "Whether on the facts and circumstances of the case and in law, the ITAT is justified in deleting the penalty u/s.271(1)(c) of the I. T. Act,1961 on the income which was offered for taxation during survey and return of income was revised after detection by department" 3 The Respondent-assessee had originally filed a return of income on 31st October, 2006 declaring a total income of Rs. 9.69/- lakhs. In its return of income, as filed an amount of Rs. 1.62 Crores was credited to its capital account being Long Term Capital Gain on sale of shares. However, no income on account of the above was offered for taxation. Thereafter, on 5th October, 2007, during a course of survey ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount of Rs. 1.62 Crores had been declared as capital gains in the original return of income. Besides inter-alia noting in the order that "It is also pertinent to note that all details relating the transactions have been duly disclosed in the return of income." Further the order of the CIT(A) observes that during the course of proceeding before him sufficient evidence in the form of brokers note, copy of balance-sheet, copy of Demat account, evidence of payment for shares etc has been produced in support of the transaction for him to prima facie conclude that the amount of Rs. 1.62 Crores appears to be attributable to Long Term Capital Gain. 7 On further appeal by the Revenue, the Tribunal by the impugned order dated 1st May, 2013 uph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, bank statement etc to reach a conclusion that prima facie the income appears to be on account of Long Term Capital Gain. This is totally unjustified as no remand report was called for from the Assessing Officer and the Revenue was given no opportunity to contest the same; (b) The justification by the Assessee of having made the disclosure of Rs. 1.62 Crores as business income when originally claimed as capital gain was for the purposes of buying peace is not available as held by the Apex Court in Mak Data P. Ltd v/s Commissioner of Income Tax-II(Civil Appeal No.9772 of 2013 rendered on 30th October, 2013; and (c) That a change of head of income during the assessment proceeding would warrant penalty upon a defaulting assessee if the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of having deleted and accepted the amount of Rs. 1.62 Crores as business income, to buy peace is not available. We find that the facts in that case are completely distinguishable and the observations made therein would not be universally applicable. In that case, a sum of Rs. 40.74 lakhs had never been disclosed to the Revenue. During the course of survey, the assessee therein had surrendered that amount with a covering letter that this surrender has been made to avoid litigation and buy peace with the Revenue. In the aforesaid circumstances, the Apex Court held that the words like "to avoid litigation and buy peace" is not sufficient explanation of an assessee's conduct. It held that the assessee had to offer an explanation for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra) the Court was dealing with the change of head of income but not with regard to a claim for full exemption from payment of tax as in this case. We are unable to accept the aforesaid submission. According to us, the distinction sought to made on behalf of the Revenue is not acceptable as the ratio of the decision in M/s Bennett Coleman(supra) is where complete disclosure of income had been made in the return of income and head of the income undergoes a change at the hands of the Assessing Officer would not by itself justify the imposition of penalty under Section 271(1)(c) of the Act. 12 We find that the Commissioner of Income Tax(A) during the penalty proceedings had again examined the issue whether the claim of capital gain made in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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