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The assessee sold the property at a sum of Rs.2,51,50,000/- For the purpose of stamp duty, however, the value was estimated at a sum of Rs.5, 19,77,000/- and on that basis the stamp duty was realized. During the assessment, it was found that the assessee had disclosed the sale price
In the present case, admittedly, assessee made a claim but the same was rejected and disallowed not for the reason that the claim was not genuine or was fabricated but in view of provisions of law that assessee did not deduct TDS thereon.
The fact remains that the actual amount received was offered for taxation. It is only on the basis of the deemed consideration that the proceedings under s. 271(1)((c) started. The Revenue has failed to produce any iota of evidence that the assessee actually received one paise more than the amount shown to have been received by him.
Thus obviously, it is only on account of deeming provisions of section 50C, the AO has made the addition by adopting the sale consideration of Rs.5, 19,77,000/-, being the value adopted for the purpose of stamp valuation. The revenue has also not shown as to how the assessee could be held to have actually received this amount which is in excess of the amount of Rs.2,51,50,000/-.
Having heard the submissions of both the sides and on due consideration of the facts of the case, we are of the considered opinion that the transaction in respect of the share trading was duly disclosed at the time of filing of the return. Some of the income was shown as long-tern capital gain and part of the income was also shown as speculative business in shares/scripts trading.
The issue pertains to penalty under section 271(1)(c) of the Income Tax Act, 1961 (‘the Act’ for short). The revenue authorities had imposed penalty on the ground that deduction under section 80HHC of the Act was wrongly claimed. The Tribunal however, deleted such penalty. The Tribunal noted that tax liability against the assessee was confirmed on the basis of the decision of the Apex Court in the case of CIT v. Ravindranathan Nair, 295 ITR 228. The Tribunal noted that such decision was not available when the assessee filed the return. On such basis, the Tribunal was prompted to delete the penalty.
Voluntarily means out of free will without any compulsion. When the assessee concealed incriminating material in the form of transactions in the aforesaid account of the two parties, surrender cannot held to be voluntarily. Surrender of income after the department has collected incriminating material with regard to the income so disclosed, cannot be voluntary surrender, because it was made under the constraint of exposure to adverse action by the Department.
Mere mistake in making of a claim in the return of income would not ipso facto reflect concealment or furnishing of inaccurate particulars of income in terms of section 271(1)(c) of the Act. The wrong claim of depreciation in the present case cannot be said to be made with an intention to evade taxes in as much as even after the disallowance of depreciation, the resultant income of the assessee remains a loss. In fact, the assessee had pointed out before the Assessing Officer that it has been incurring losses since the year 2003 due to the market forces. Considering the entirety of the circumstances, in our view, the impugned disallowance on account of depreciation is a mistake, and does not invite the provisions of section 271(1)(c) of the Act.
From the documents on record, it can be seen that part of the penalty was confirmed by the CIT(Appeals). However, with respect to the rest, the same was deleted. The Tribunal concurred with such view of CIT (Appeals). Several additions were struck down in the assessment proceeding itself and were sent for reconsideration. With respect to disallowance of deduction under section 80IA of the Act, the authorities held that the claim cannot be stated to be a wrong claim. Relying on the decision in the case of CIT v. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158, such penalty was deleted.
There can be no concealment or non-disclosure, as the assessee had made a complete disclosure in the IT return and offered the surrendered amount for the purposes of tax and therefore no penalty under s. 271(1)(c) could be levied. The words ‘in the course of any proceedings under this Act’ in Sec. 271(1)(c ) of the Act are prefaced by the satisfaction of the AO or the CIT(A).
