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Nirmal Kumar Bardia Versus Deputy Commissioner of Income Tax, Central Circle-2, Jaipur.

2015 (10) TMI 741 - ITAT JAIPUR

Penalty U/s 271(1)(c) - undisclosed salary received from RMC Gems Thai Co. Ltd., Bangkok - assessee disclosed salary receipt after search proceeding carried out in case of assessee and return filed U/s 153A - assessee had shown long term capital gain on sale of agricultural land, Kalyan colony plot and plot of Chitrakoot in the computation of income and taxable long term capital gain was also claimed by the assessee exempted by making investment in residential house - Held that:- The argument of .....

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expert opinion on taxation matter as he was filing return since long and had number of businesses. Therefore, the assessee’s claim that he was ignorant about legal position of salary received in Bangkok and second house purchased during the year under consideration and claimed deduction U/s 54F by not disclosing the facts of the another house purchased in the return, proved that the assessee’s action was not bonafide. We have considered view that the assessee has concealed the particulars of in .....

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IT(A) was right to confirm the penalty on given circumstances. Accordingly, we uphold the order of the ld CIT(A) - Decided against assessee. - ITA No. 842/JP/2012 - Dated:- 7-9-2015 - SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM For The Assessee : Shri G.G. Mundra (C.A.) For The Revenue : Shri Kailash Mangal (JCIT) ORDER PER: BENCH This is an appeal filed by the assessee against the order dated 25/09/2012 passed by the learned CIT (A) Central, Jaipur for A.Y. 2006- 07. The sole ground of appea .....

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h, Jaipur of the RMC Group of Jaipur. The assessee belonged to this group. In the course of search and survey action, cash, jewellery, valuables, books of account and documents were found and seized/impounded as per panchnama/order of respective dates. The ld Assessing Officer observed that in this case, the assessment was completed U/s 153A read with Section 143(3) of the Act. Notice U/s 153A was issued for A.Y. 2006-07 on 25/01/2008 and assessee was asked to prepare a true and correct return o .....

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n of income filed in response to notice U/s 153A. The assessee served as employee in M/s RMS Gems Thai Co. Ltd., Bangkok. He had received 105000 Thai Bhat per month from 01/01/2006 to 31/12/2006. The ld Assessing Officer further observed that salary for the three months pertaining to the F.Y. 2005-06 was surrendered in the year under consideration. This income from salary was not disclosed in return of income filed U/s 139(1). Proportionate salary for the three months amounts to 315000 Thai Bhat .....

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ned income of ₹ 23,68,116/-. During the previous year relevant to the assessment year, the assessee had sold three properties i.e. plot of Kalyan Colony on 12/01/2006 for ₹ 26,75,600/-, plot of Chitrakoot on 12/07/2005 for ₹ 8,50,000/- and agricultural land on 13/02/2006 at ₹ 1.5 crores. The long term capital gain was shown by the assessee at ₹ 34,74,458/- and claimed exemption U/s 54F for whole amount by investment in construction of house but on verification, the .....

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r furnishing wrong particulars and concealment of income in respect of income of ₹ 17,64,952/-. Before imposing the penalty, the ld Assessing Officer gave show cause notice on 31/3/2009 and 24/08/2009. The assessee also replied vide letter dated 19/08/2009 and 31/08/2009. After considering the assessee s reply, the ld Assessing Officer held that salary of the assessee as claimed that he was under a bonafide belief that he declared his income from salary in his return of income in Thailand .....

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omputation of the total income of any person under this Act, such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer to the false, or such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bonafide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then the case of the assessee comes within the purview of Section 2 .....

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oes it at his own peril. The assessee had not brought on any material evidence on record to establish that the mistake was bonafide. Moreover, Section 271(1)(c) of the Act read with its explanation-1, does not talk of any particular intention or means rea for fastening penalty. If the actus of assessee falls within the four corners of the provisions of the said Section, the imposition of the penalty is independent of any mental state of the assessee and as such a claim of bonafide mistake of law .....

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4,954/-, which was disallowed by the Assessing Officer in quantum addition. Now the assessee s reply is perfunctory and do not carry any weight by saying that the tax was paid on amount added back does not absolve the assessee of the wrong committed by him. The ld Assessing Officer also considered the case law submitted before the Assessing Officer, which was found distinguishable from those of the said case laws and therefore, the ld Assessing Officer imposed penalty at ₹ 7,11,833, which .....

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td. Bangkok ₹ 353599/- (ii) Disallowance of wrong claim U/s 54F of IT Act ₹ 1764952/- Total ₹ 2118551/- The assessment year involved is 2006-07 and original return U/s 139(1) of IT Act was filed on 31/10/2006, after search on 23/08/2007 return was filed U/s 153A on 28/02/2008. Admittedly the salary income amounting to ₹ 353599/- from employer at Bangkok for the period 01/01/2006 to 31/04/2006 was not shown in the original return. Similarly regarding wrong claim of deducti .....

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claim. In this background it is to be seen whether such issues constituted concealment of income/furnishing of inaccurate particulars of income or not. The A.O. s contention is that such mistake were not bonafide and that it tantamount to concealment of income/furnishing of inaccurate particulars of income. The appellant also admitted to have omitted such income by way of salary being not shown in the return and wrong claim U/s 54F of IT Act but it is stated that salary was paid/received in Ban .....

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nuine inasmuch as, the appellant is regularly assessed to tax, deriving income from business and profession, the accounts are audited by Chartered Accountants and the appellant is assisted by taxation experts on regular basis. In this background it cannot be believed that such wrong claim were made and salary income was not shown due to ignorance of law and in fact such omission cannot said to be unintentional or bonafide. Though it is correct that the basic facts relating to these two issues ar .....

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assessee agreed for such additions. It is a settled law that simply because assessee agreed to addition of concealed income after detection thereof by the department then assessee cannot escape from imposition of penalty U/s 271(1)(c) of IT Act. Reliance is placed on the following case laws: (i) CIT Vs. Rakesh Suri 331 ITR 458 (All) (ii) CIT Vs. Sushma Devi Agarwal 67 DTR 430 (ITAT, Kolkatta) It may further be stated that willful concealment is not an essential ingredients for attracting and imp .....

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ion of the A.O. is accordingly confirmed. 4. Now the assessee is in appeal before us. The ld AR of the assessee reiterated the arguments made before the ld CIT(A). He has further submitted that the assessee never agreed to make addition/disallowance and no penalty could be imposed nor he argued that as default was not willful so penalty is not imposable. The case law cited by the ld CIT(A) are not on facts of the case and so the same are not applicable. The assessee has neither furnished inaccur .....

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notice by his counsel when he filed original return. Even though salary income was includible while determining total income in India yet he was entitled to credit of taxes paid thereon in Bangkok in accordance with provisions of Section 90 of I. T. Act, 1961 and same was also allowed in assessment made. Thus a nominal tax effect was there and, therefore, assessee could not be expected to suppress dishonestly the said salary income from his return. The inadvertent error of law was occurred due .....

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s given in assessment order. The sale consideration and capital gain was correctly disclosed in return filed giving full particulars and the same was accepted by A.O. in assessment. The assessee also made investment of ₹ 50,25,600/- i.e. total net sale consideration in construction of a new house during the year itself and the same has also been found correct by A.O. in assessment. The assessee on these facts claimed deduction u/s 54F, in respect to whole of capital gains worked out for th .....

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(b) of provision to Section 54F (1). Thus on these facts in law the assessee could entitled for proportionate deduction of purchase of a new house i.e. for ₹ 24,72,700/- in place of his investment in construction of a new house amounting to ₹ 50,25,600/-. This led to disallowance of claim of deduction u/s 54F by assessee to the extent of ₹ 17,64,952/- as worked out in assessment order. He further submitted that it will be thus found that both addition/disallowance occurred in a .....

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shonestly or the item has been claimed fraudulently or a bogus claim has been made. When the facts are clearly disclosed in the return of income, penalty cannot be levied and merely because an amount is not allowed or taxed to income, it cannot be said that the assessee had filed inaccurate particulars or concealed any income chargeable to tax. Further, conscious concealment is necessary. Even if some deduction or benefit is claimed by the assessee wrongly but bona fide and no mala fide can be a .....

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articulars of income. In this context it is contended that the claim of the appellant was neither bogus or fraudulent and even if such claim has been made which has not been allowed then keeping in view the ratio of judgment decide by the Hon'ble Supreme Court mentioned above, the case of the appellant cannot said to be furnishing of inaccurate particulars of income or concealment of income. The appellant has further placed reliance on the judgment of Hon'ble ITAT, Mumbai Bench in case o .....

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ellant is regularly assessed to tax deriving income from business or profession, the accounts are audited by Chartered Accountant and the appellant is assisted by taxation expert on regular basis, it is submitted that reliance is placed on the judgment of Hon'ble Supreme Court in the case of Price Water House Cooper Pvt. Ltd. Vs. CIT (2012) 348 ITR 306 wherein it is observed that even a reputed firm having great expertise available with it, it was possible that a mistake could occur. The Sup .....

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lty u/s 271 (1) (c), when assessee had furnished full particulars. In view of above facts and position of law the Ld. CIT (A) is wrong and has erred in law in confirming penalty of ₹ 7,11,833/- levied by A.O. u/s 271 (1) (c) of I. T. Act, 1961 which deserves to be deleted. 5. At the outset, the ld DR has vehemently supported the order of the ld CIT(A). 6. We have heard the rival contentions of both the parties and perused the material available on the record. It is a fact that the assessee .....

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ased another residential house other than the new assets within a period of one year after the date of transfer of original assets. The assessee purchased another residential house plot NO. 5-K, Kalyan Colony, Jaipur for ₹ 24,72,700/- on 11/5/2006, therefore, the assessee has claimed excess exemption U/s 54F(i) of the Act. The argument of the assessee that the assessee had disclosed salary received from RMC Gems Thai Co. Ltd., Bangkok voluntarily has not substantiated with any evidence. Th .....

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bout legal position of salary received in Bangkok and second house purchased during the year under consideration and claimed deduction U/s 54F by not disclosing the facts of the another house purchased in the return, proved that the assessee s action was not bonafide. We have considered view that the assessee has concealed the particulars of income and furnished inaccurate particulars of income. The case law cited by the assessee are not squarely applicable on it. The case laws relied by the ld .....

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