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In the assessment order there is no finding of the Assessing Officer that the assessee was guilty of concealing the income which he could have recorded as provided under Section 271(1) which says that if the Assessing Officer or the Commissioner (Appeals) or the Commissioner, in course of any proceeding under the Act, is satisfied that any person has concealed particulars of his income or furnished inaccurate particulars of such income, then he may direct that such person shall pay, by way of penalty. T
We are of the view that the Commissioner of Income Tax (Appeals) as also the Tribunal have approached the issue correctly. The question whether the sale of the stock options would result in long term capital gains or short term gains was not very clear at the time when the respondent/ assessee filed his return for the assessment year 2002-03.
The above factual matrix of the case nowhere proves that the assessee had either concealed the income or furnished any inaccurate particulars. The very fact that it had duly mentioned the consideration in the year of receipt itself proves its bona fides. In this regard, we fortify our opinion from the hon’ble Bombay High Court judgment in the case of Metal Rolling Works Ltd. (supra).
The contention of the assessee that the payments in question were made to the builder not in the assessment year 2008-2009, but in the earlier years has been rightly rejected by the CIT because, firstly, the payments made in the earlier years if any related to purchase of flat No. B-92 on the 9th floor and not in respect of flat No.A-46 on the 4th floor. If the amounts paid on 07.03.2008 were infact paid in the earlier years, the same would have found place in the agreement dated 07.03.2008.
Both the CIT(A) as well as the ITAT have set aside the penalty imposed by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961 on the ground that the issue of deduction under Section 14A of the Act was a debatable issue.
Hon’ble Delhi High Court in the case of CIT vs. Liquid Investment Limited, I.T.A.No. 240/2009 vide its order dated 5.10.2010 has clearly held that where High Court has accepted substantial question of law u/s 260A, this itself shows that issue is debatable. Accordingly, no penalty was imposable u/s 271(1)(c) of the Income-tax Act, 1961.
Whether the penalty was imposed U/s 271(1)(c ) because of the reason that the deduction claimed under section 80-IB by the respondent-assessee was ultimately allowed at a lower level were valid?
Learned counsel for the appellant submitted that in the facts and circumstances of the case no penalty was leviable as the appellant itself had surrendered the said amount representing the difference in the sundry creditors in order to buy peace. He, thus, submitted that there was no concealment of income so as to warrant levy of penalty under Section 271(1)(c) of the Act.
After the search and the statement recorded under section 132(4), the assessee, on being issued with notice under section 153A did not file any return. The notice under section 153A was issued on 20-7-2006. It was only when assessment proceedings were taken up for consideration, did the assessee, by letter dated 14-8-2007, request that its return, filed on 31-10-2005,
Even if it is assumed that the assessee continued to remain the owner of the property throughout the year, the other condition of section 32, that the property should have been used for the purpose of the assessee’s business has not been satisfied. There is no proof that the director resided in the property and it was only a claim made by the assessee in the course of the arguments.
