Income-tax Appeal Allowed: Penalty Deleted under Section 271(1)(c)

The Tribunal allowed the appeal, deleting the penalty imposed under section 271(1)(c) of the Income-tax Act, 1961. The decision was based on the appellant's bona fide claim supported by available evidence, which did not warrant penalty imposition.

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Issues:
1. Assessment of short term capital gain/loss on sale of property.
2. Penalty imposition under section 271(1)(c) of the Income-tax Act, 1961 for furnishing inaccurate particulars of income.

Issue 1: Assessment of short term capital gain/loss on sale of property

The appellant claimed a capital loss of Rs.32,87,521 on the sale of a property, but the Assessing Officer (AO) re-computed the capital gain to Rs.46,07,886 due to lack of evidence regarding the purchase cost and other expenses. The AO added Rs.78,95,407 as capital gain, considering the total purchase cost for the property to be Rs.63,92,114. The appellant argued that the expenses claimed were genuine but could not provide documentary evidence. The AO also initiated penalty proceedings under section 271(1)(c) for filing inaccurate particulars of income. The appellant contended that the claim was made in good faith based on available evidence. The AO imposed a penalty of Rs.24,41,157, considering the claim as deliberate and mala fide.

Issue 2: Penalty imposition under section 271(1)(c) of the Income-tax Act

The appellant challenged the penalty before the Commissioner, who upheld the penalty on the capital gain addition but deleted the penalty on a minor difference in income computation. The Commissioner noted that the appellant failed to substantiate the cost and expenses related to the property, leading to inaccurate particulars being furnished. The Commissioner relied on judgments to support the penalty imposition. The appellant argued that all relevant details were available before the authorities, even though specific documents were not produced due to business closure. The appellant presented evidence of property purchase and financing, demonstrating bona fide intention in the claim. The Tribunal found the claim to be genuine and not mala fide, citing a Supreme Court judgment that mere unsustainable claims do not warrant penalty. Consequently, the Tribunal deleted the penalty, finding no justification for its imposition.

In conclusion, the Tribunal allowed the appeal, deleting the penalty imposed under section 271(1)(c) of the Income-tax Act, 1961. The decision was based on the appellant's bona fide claim supported by available evidence, which did not warrant penalty imposition.

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