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TMI Blog2019 (9) TMI 1074X X X X Extracts X X X X X X X X Extracts X X X X ..... he aforesaid unsubstantiated claim of the assessee and upheld the penalty imposed by the A.O u/s 271(1)(c) of the Act. We find that even before us the ld. A.R had adopted a similar approach and except for reiterating his aforesaid claim, had however, failed to place on record the requisite material which would irrefutably support the factual position so claimed by him. Admittedly, we are principally in agreement with the claim of the ld. A.R and are persuaded to subscribe to his claim that in the backdrop of the aforesaid facts as had been canvassed by him before us, no STCG would arise in the hands of the assessee under Sec. 50 of the Act. We cannot remain oblivious of the fact that the said claim of the assessee which is bereft of any supporting documentary evidence that would substantiate the veracity of its aforesaid claim, cannot be summarily accepted on the very face of it. We thus, in all fairness, are of the considered view that the matter requires to be revisited by the A.O. In case the aforesaid factual position as had been demonstrated by the assessee before us is found to be in order, then the penalty imposed by the A.O under Sec. 271(1)(c) shall stand vacated. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich however was not reflected in its return of income for the year under consideration. It was gathered by the A.O that the gala sold was a depreciable asset of the assessee. In the backdrop of the aforesaid facts, the A.O called upon the assessee to explain as to why the Short Term Capital Gain (for short STCG ) on the sale of the aforesaid gala may not be brought to tax. Also, the assessee was directed to furnish the computation of the STCG on the sale of the aforesaid property. In reply, the assessee submitted that the W.D.V of the gala was ₹ 81,23,314/- and the same was sold on 12.11.2009 for a consideration of ₹ 90,00,786/-. Accordingly, in the backdrop of the aforesaid facts the STCG on the sale of the aforesaid property was worked out at ₹ 8,77,472/-. As was discernible from a perusal of the sale deed , it was observed by the A.O that the market value of the gala as on the date of its sale by the assessee was ₹ 1,33,68,840/-. Accordingly, the A.O invoking the deeming provisions of Sec.50C of the Act, therein adopted the segment value of the aforesaid property as its deemed sale consideration and worked out the STCG in the hands of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantiate his claim, the assessee had been made to suffer a tax liability, despite the fact that there was no such obligation cast upon it as per the mandate of law. In sum and substance, it was the claim of the ld. A.R, that it was but for the failure on the part of the assesses counsel who had appeared in the course of the proceedings before the lower authorities to appreciate the law, that the assessee had been saddled with a tax liability which otherwise was not called for in its hands. It was submitted by the ld. A.R that as the penalty proceedings are separate and distinct from the assessment proceedings, therefore, no penalty under Sec. 271(1)(c) in the backdrop of the aforesaid factual position was liable to be imposed in the hands of the assessee. Alternatively, it was submitted by the ld. A.R that no penalty under Sec. 271(1)(c) could be imposed where the capital gain had been worked out by applying the deeming provisions of Sec.50C of the Act. In order to drive home his aforesaid contention, the ld. A.R relied on the order of the Hon ble High Court of Calcutta in the case of CIT, Kolkata-IV Vs. Madan Theatres Ltd. (G.A.No. 684 of 2013, dated 14.05.2013). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the penalty imposed on it under the aforesaid statutory provision. As observed by us hereinabove, it was submitted by the assessee for the very first time before the CIT(A) that as on 01.04.2009 it owned two industrial galas under the same block of assets viz. (i) Singh Industrial Block (WDV of ₹ 18,24,210/-); and (ii) Sadhana Industrial Estate (WDV of ₹ 1,01,39,892/-). It was the claim of the assessee, that as one of the gala viz. Sadhana Industrial Estate was sold on 12.11.2009 for a consideration of ₹ 90,00,786/- i.e at a loss of ₹ 11,39,106/- (as its WDV as on 01.04.2009 was ₹ 1,01,39,892/-) ,therefore, the block of assets of the gala as on 31.03.2010 remained at ₹ 29,63,316/- [₹ 18,24,210/- (+) ₹ 11,39,106/-]. In sum and substance, it is the claim of the assessee that as neither the block of asset of the gala had ceased to exist during the year under consideration, nor the full value of consideration received or accruing as a result of transfer of the aforesaid gala exceeded the modified actual cost of the assets falling within the said block of assets, therefore, no STCG on the sale of the said gala viz. Sadhana Indust ..... X X X X Extracts X X X X X X X X Extracts X X X X
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