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TMI Blog2016 (6) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... i Manish Borad, AM. For The Appellant : Shri A. R. Rewar, Sr.DR For The Respondent : Shri H. C. Shah, AR ORDER PER Manish Borad, Accountant Member . This is an appeal filed by the Revenue against the order of ld. CIT(A) I, Ahmedabad, dated 20/3/2008 in appeal No.CIT(A)-I/CCI[ 1]/9/07-08 passed against order u/s 271(1)(c) of IT Act, 1961 (in short the Act) for Asst. Year 2002-03 on 23/3/2007 by DCIT, CC1(1), Ahmedaad. Following grounds have been raised by the Revenue :- 1. The Ld. CIT(A) has erred in law and on facts in deleting the penalty levied of ₹ 22,41,425/- u/s.271(l)(c) by the A.O. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the A.O. 3 It is therefore, prayed that the order of the Ld.CIT(A) be set aside and that of the Assessing Officer be restored to the above extent. 2. Briefly stated facts of the case as culled out from the records are that the assessee is an individual. Return of income was filed on 9.8.2002 declaring total income of ₹ 20,11,420/-. Assessee accounts for the income on cash basis. Assessment u/s 143(3) of the Act was framed on 23.3.2005 on a total income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed when it is actually received and the interest of ₹ 50,185/- was not included in the income of assessee and, therefore, there was no reason of concealment of income or furnishing of inaccurate particulars of income. As regards the penalty imposed on addition of ₹ 8,79,320/- and ₹ 53,49,000/- on account of short term capital gain on sale of DDBs of Nirma Ltd. and short term capital gain on the transaction of strips of TATA Finance Ltd. respectively, the issue came up before the Tribunal and both the additions have been deleted by the co-ordinate bench in ITA No.1255/Ahd/2006 for Asst. Year 2002-03. Banking upon the order of the Tribunal towards the deletion of quantum additions, ld. AR submitted that in such situation when the quantum additions have been deleted then no penalty is called for u/s 271(1)(c) of the Act. 8. We have heard the rival contentions and perused the material on record. Through this appeal Revenue is aggrieved with the order of ld. CIT(A) deleting the penalty of ₹ 22,42,000/- which was imposed u/s 271(1)(c) of the Act on the following additions :- 1. Addition on account of accrued interest on OFCPNs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of purchase and sale of deep discount bonds (DDBs) of Nirma Ltd. He has also noted that the purchase cost of the same have been shown at ₹ 40 lacs and sale consideration has been declared at ₹ 48,79,320/-. He has further noted that these DDBs were allotted to the assessee on 28.07.2000 and the allotment letter was issued to the assessee dated 23.09.2000. He has further noted that the debenture certificate has been issued to the assessee dated 05.10.2001. Thereafter, it is noted that DDBs of Series A of Nirma Industries Ltd. were listed in National Stock Exchange (NSE) on 20.09.2001 and was made available for dematerialization as on 19.09.2001. Thereafter, he has noted that these DDBs of Nirma Ltd were sold by the assessee on18.03.2002. The assessee has claimed it as long term capital asset by counting the holding period starting form the date of allotment i.e. 28.07.2000 but the A.O. was of the view that these are short term capital assets on the basis of counting of holding period from the date of listing of the same in NSE i.e. 20.09.2001. On the basis of this, the A.O. held that this capital gain of ₹ 8,79,320/- is assessable as short term capital gai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ully following the Tribunal decision, we decide both these issues in favour of the assessee and it is held that since period of holding was more than 12 months from the date of allotment i.e. 23.09.2000 till the date of sale i.e. 18.03.2002, the resulting gain has to be assessed as LTCG and the assessee should be held as eligible for deduction u/s 54EC also because there is no other objection of the revenue regarding allowability of deduction u/s 54EC except that the income in question is not a LTCG. Both these grounds no.2 3 are allowed. Addition of ₹ 53,49,000/- (account of short term capital gain on the transaction of strips of TATA Finance Ltd. 2.3 Grounds No.4 5 are interconnected which read as under: 4. In Jaw and in facts and circumstances of the Appellant's case, the Ld. Commissioner of Income Tax (Appeals) has erred in upholding the action of Id. Assessing Officer in considering the long term capital gain of ₹ 53,49,000/- arising on sale of principal strip part A of Tata finance Ltd. NCDs as short term capital gain. 5. In law and in facts and circumstances of the Appellant's case, the Ld. Commissioner of Income Tax (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Kulgam Holdings Pvt. Ltd. in I.T.A.No. 3785 and 2574/Ahd/2004 dated 25.04.2007, copy of which is available on page 136-140 of the paper book II. He further submitted that on the same issue, another tribunal decision rendered in the case of Navin Associates Vs ACIT and Others in I.T.A.No. 1248, 1256 1266/Ahd/2006 is also in favour of the assessee and a copy of this Tribunal decision is available on pages 196- 199 of the paper book II. Ld. D.R. supported the orders of authorities below. 2.3.3 We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below and the Tribunal decisions cited by Ld. A.R. We find that in the case of Navin Associates (supra), the issue involved was, whether the Board s Circular No.2 of 2002 dated 15.02.2002 can be applied ignoring the press note dated 20.03.2002 issued in this regard by CBDT. The Tribunal in that case has decided this issue in favour of the assessee by following the Tribunal decision rendered by the Mumbai Bench of the Tribunal rendered in the case of ITO Vs Kulgam Holdings Pvt. Ltd. (Supra). The tribunal has also followed SMC Bench decision of Ahmedabad Bench of the trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be allowed deduction u/s 54EC also. We hold accordingly. Grounds No.4 5 of the assessee are also allowed. 11. We are of the considered view that there are series of decisions of the Tribunal wherein it has been held that if the quantum addition is deleted by the Tribunal then in such cases assessee should not be visited with penalty u/s 271(1)(c) of the Act for concealment of income or furnishing of inaccurate particulars of income. 12. In appeal before us, we observe that out of total addition of ₹ 62,78,505/-, penalty on the addition of ₹ 50,185/- has already been deleted by us and for the remaining amount of addition i.e. ₹ 62,28,320/- (Rs. 8,79,320/- + ₹ 53,49,000/-) as the quantum addition has been deleted by the Tribunal in ITA No. 1255/Ahd/2006 for Asst. Year 2002-03 vide order dated 21.06.2013, and so no penalty is to be sustained u/s 271(1)(c) of the Act. Accordingly, we do not find any reason to interfere with the order of ld. CIT(A), we uphold the same. This ground raised by the Revenue is dismissed. 13. Other grounds are general in nature, hence no need of adjudication. 14. In the result, appeal of the Revenue is dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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