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TaxTMI 
TaxTMI 
TaxTMI 
2016 (6) TMI 1080
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....e records are that the assessee is an individual. Return of income was filed on 9.8.2002 declaring total income of Rs. 20,11,420/-. Assessee accounts for the income on cash basis. Assessment u/s 143(3) of the Act was framed on 23.3.2005 on a total income of Rs. 82,77,974/- after making following additions :- 1. Addition on account of accrued interest on OFCPNs of Nirma Indus. Ltd. Rs.50,185/- 2 Addition on account of short term capital gain on sale of DDBs of Nirma Ltd. Rs.8,79,320/- 3 Addition on account of short term capital gain on the transaction of strips of TATA Finance Ltd. Rs.53,49,000/- Total Rs.62,78,505 Assessee's appeal before ld. CIT(A) was dismissed vide CIT(A)'s order dated 9.3.2006. Thereafter assessee came in appeal before the Tribunal against the impugned addition of Rs. 8,79,320/- and Rs. 53,49,000/- as referred above and succeeded in appeal before the Tribunal. Pursuant to the order of ld. CIT(A) confirming additions, penalty order u/s 271(1)(c) of the Act dated 23.3.2007 was passed by ld. Assessing Officer imposing penalty of Rs. 22,42,000/- on the confirmed additions made by ld. CIT(A) at Rs. 62,78,505/-.....
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....ort term capital gain on the transaction of strips of TATA Finance Ltd. Rs.53,49,000/- Total Rs.62,78,505 Addition of Rs. 50,185/- (account of accrued interest on OFCPNs of Nirma Industries Ltd.) 9. We observe that during the course of assessment proceedings itself it was brought to the notice of ld. Assessing Officer that assessee has filed her return of income on cash method of accounting and due to this reason the interest of Rs. 50,185/- on OFCPNs of Nirma Indus. Ltd. was not shown in the return of income. Certainly in such situation there cannot be a case of concealment of income or furnishing of inaccurate particulars of such income which are necessary for imposition of penalty u/s 271(1)(c) of the Act. 10. We further observe that in ITA No.1255/Ahd/2006 for Asst. Year 2002-03, vide order dated 21.06.2013, the Tribunal has dealt with the grounds of assessee for the impugned additions of Rs. 8,79,320/- & Rs. 53,49,000/- made ld. Assessing Officer and the grounds have been allowed by adjudicating the issues as under :- Addition of Rs. Rs. 8,79,320/- (account of short term capital gain on sale of DDBs of Nirma Ltd.) 2.2 Grounds No.2 & ....
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.... further appeal before us. 2.2.2 It was submitted by the Ld. A.R. before us that in the case of Shri Karsanbhai P Patel (HUF) for the same assessment year i.e. assessment year 2002-03, this issue was decided in favour of the assessee in I.T.A.No. 1042/A/2006 dated 09.10.2009. He submitted that this decision is available on pages 62-87 of the paper book and the relevant para is para 26 of this Tribunal decision on page 85 of the paper book. Ld. D.R. supported the orders of authorities below. 2.2.3 We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below and the Tribunal decision cited by Ld. A.R. From the facts noted by the tribunal in that case, we find that the dispute before the tribunal was regarding the same DDBs of Nirma Ltd. for which letter of allotment was issued by Nirma Ltd. on 23.09.2000 and debenture certificate was issued on 05.10.2001 and the same was listed in NSE only on 20.09.2001. Hence, the facts in the present case are identical. This issue was decided by the tribunal as per para 26 of the tribunal decision and for the sake of ready reference, the same is reproduced below: "For ....
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....n of NCD principle strip, Part A Series I of Tata Finance Ltd. having purchase cost of Rs. 495.51 lacs and sale consideration being Rs. 549 lacs. In respect of this capital gain also, the assessee claimed deduction u/s 54EC of the Income tax Act, 1961 because the assessee had made investment in the bonds of Rural Electricity Corporation (REC) of Rs. 62.20 lacs and the LTCG of only Rs. 8320 had been offered by the assessee. The A.O. has further noted that the assessee has purchased 9 principle strips of Part A Series I of Tata Finance Ltd. of Rs. 1 crores (face value) for a consideration of Rs. 495.41 lacs on 23.10.2000 from Nirma Industries Ltd., which is a group concern of Nirma group and the same was sold by the assessee on 20.03.2002 at Rs. 549 lacs to Nirma Industries Ltd. i.e. the same concern from which the assessee purchased these strips. The A.O. issued show cause notice to the assessee as to why the Board's Circular No.2 of 2002 dated 15.02.2002 is not applicable and why this capital gain should not be considered as STCG in the light of this Board's Circular. In reply, it was submitted by the assessee before the A.O. that the letter of board dated 12.03.1996 was applicable....
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.... per subsequent press release dated 20.03.2002, it was made clear that this Board's circular No.2 will be applicable only for bonds which are acquired after this date. This decision of Ld. CIT(A) was approved by the tribunal in that case. Similarly in the case of Navin Associates (supra), similar issue was decided by the tribunal in favour of the assessee and while deciding this issue in that case, the Tribunal has followed a decision of SMC Bench of Ahmedabad Bench of the Tribunal rendered in the case of Navin associates (supra). This SMC Bench decision of the tribunal has followed a division bench decision of Ahmedabad Bench of the tribunal rendered in the case of Kisan Discretion Family Trust in I.T.A.No. 1850/Ahd/2007 dated 02.11.2007. This Tribunal decision is also available in the paper book-II on pages 141-195. In para 57 of this tribunal decision on page 194 (backside), it was held by the Accountant Member in that case that this Board's Circular dated 15.02.2002 is applicable only to DDBs acquired on or after 15.05.2002 and since Judicial Member in that case was also having the same view, the matter was decided in favour of the assessee without referring the same to the Thi....