TMI Blog2022 (5) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... sue before us is one in which two views are possible. Further, we note that the Hon'ble Gujarat High Court has also admitted the assessee's appeal in quantum proceedings. We are of the considered view that the instant case is not a fit case for levy of penalty u/s. 271(1)(c) of the Act. The issue is clearly debatable on which various Courts have taken conflicting views. The assessee's view is also one which is a plausible view as held by various appellate forums. Therefore, in our considered view, the Ld. CIT(A) has erred in law and in facts in confirming penalty u/s. 271(1)(c) of the Act. We accordingly direct the Revenue to delete penalty u/s. 271(1)(c) of the Act imposed on the assessee. - Decided in favour of assessee. - ITA No. 176/Rjt/2018 - - - Dated:- 18-4-2022 - Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Appellant : R.D. Lalchandani, A.R. For the Respondents : Rajesh Kumar, CIT-D.R. ORDER Per Siddhartha Nautiyal, judicial Member This assessee's appeal for A.Y. 2011-12, arises from order of the CIT(A)-1, Rajkot dated 12-04-2018, in proceedings under section 271(1)(c) of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT vs. Siddhartha Enterprise 322 ITR 80, unless there is deliberate default, penalty for concealment cannot be levied. Thirdly, the assessee submitted that since the appeal of the assessee against the quantum order of the ITAT stands admitted by the High Court, the issue is debatable one and therefore the penalty cannot be levied. The ld. CIT(A) dismissed the assessee's appeal against the penalty order by holding that the Hon'ble Gujarat High Court in the case of CIT vs. Dharamshi B. Shah in ITA No. 189 of 2000 vide order dated 09-06-2014 has held that mere admittance by the High Court does not tantamount to issue being debatable. He further held that the scope of s. 271(1)(c) has also been elaborately discussed by the Supreme Court in UOI vs. Dharmendra Textile Processors 306 ITR 277 (SC) and CIT vs. Atul Mohan Bindal 317 ITR 1 (SC). The Explanations appended to section 271(1)(c) of the Income-tax Act, 1961, entirely indicates the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing the return. The object behind the enactment of section 271(1)(c) read with Explanation indicates that the said section has been enacte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar case of concealment of income. The Ld. counsel for the assessee, in response submitted that the Supreme Court in the case of CIT vs. Attili N. Rao (supra) has not overruled the Kerala High Court decision in the case of CIT v. Smt. Thressiamma Abraham (supra). 7. We have heard the rival contentions and perusal the material on record. In the present case, search was carried out at the premises of the assessee on 24-06-2010 and pursuant thereof he filed return of income on 30-07-2011. In the said return, there was no disclosure with regards to capital gains on account of shops sold under auction to realize the debt for which the assessee stood Guarantor. The shops which were transferred belonged to the assessee. The issue for consideration is firstly, whether penalty can be levied for non-disclosure of capital gains on the ground that the assessee has not received sales proceeds since the same were appropriate towards settlement of dues of the bank for which the assessee stood guarantor. The second issue for consideration is that if appeal of the assessee against the quantum order of the ITAT stands admitted by the High Court, can it be said that the issue is debatable one and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 4,33,960, i.e., Rs. 5,62,980 minus Rs. 1,29,020. Again, the Mumbai ITAT (TM) Bench in the case of Perfect Threads Mills V. DCIT [2020] 113 taxmann.com 384 (Mumbai - Trib.) (TM) held that where on account of non-payment of corporate loan as per agreed terms, a charge on mortgaged property was created by assessee in terms of section 13(2) of SARFAESI Act, 2002, in such a case, upon sale of property so mortgaged, assessee could not claim deduction of principal amount of loan either as expenditure under section 48 or as 'diversion of income by overriding title'. The Madras High Court in the case of Smt. D. Zeenath v. ITO [2019] 1 taxmann.com 298 (Madras) held that where property was mortgaged by assessee after he had acquired property, amount paid by assessee to discharge mortgage debt by sale of said property could not be treated as cost of acquisition so as to allow same as deduction under section 48 of the Act. 7.2. However, we equally note that in several cases, including the one cited by the assessee, it has been held that in case of transfer of mortgaged property, if the consideration does not flow to the assessee, then the same would not amount to transfer of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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