AI Drafter 
TaxTMI 
TaxTMI 
2016 (9) TMI 248
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....e case of Smt. Asha Babladi were heard on 28.07.16. Since the facts involved in all the above captioned appeals are identical, hence the same are taken together for disposal by this common order. 2. The issue raised in all the appeals is relating to the levy of penalty under section 271(1)(c) of the Income Tax Act. First we take up the assessee Mr. Satish Babladi's appeal for A.Y. 2004-05 in ITA No.345/M/2015. ITA No.345/M/2015 for A.Y. 2004-05 3. In this case, the penalty aggregating of Rs. 2,21,443/- had been levied by the Assessing Officer (hereinafter referred to as the AO) under section 271(1)(c) of the Act on account of following disallowances/additions. a. Capital receipt of Rs. 500000/- claimed to be received as gift. b. Expenses deductible of Rs. 43832/- c. Income treated as understated of Rs. 45081/- d. Short term capital gain of Rs. 114763/- 4. The Ld. CIT(A) confirmed the penalty so levied by the AO. The assessee, thus, has come in appeal before us. 5. The Ld. A.R. of the assessee has made his submissions regarding the explanation of the assessee relating to the above additions made by the AO and has further contended that the levy of penalty ....
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....ny falsehood in the evidences submitted by the assessee relating to the genuineness of the transaction. The Revenue could not prove that the claim put by the assessee was wrong or bogus. Merely because the additions have been made by the AO and confirmed by the Tribunal on account of inability of the assessee to furnish more evidences as required by the authorities to prove the genuineness of the transaction that itself is not sufficient to hold that the claim of the assessee was wrong, inaccurate or that there was any concealment of income. The penalty proceedings are separate from quantum assessment proceedings. In the case of levy of penalty, it should be proved on the file that the particulars furnished by the assessee were inaccurate particulars of income or that there was concealment of income. Every case of confirmation of addition or disallowance cannot be regarded as a case of furnishing of inaccurate particulars of income or concealment of income. Even it cannot be said that this case of the assessee was a case of no evidence at all. The assessee had already submitted evidences in the shape of gift deed, PAN number of the donor, the bank statement reflecting the transacti....
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....ot maintaining any regular books of accounts. Hence, during the assessment proceedings, the assessee could not reconcile each and every amount that was not a case of any concealment of income or avoidance of tax but only because of the inability of the assessee to reconcile some figures. Regarding the addition of Rs. 1,14,763/- on account of income from short term capital gains, the Ld. A.R. has explained that the said income had accrued to the assessee on account of redemption of units in mutual funds. He has explained that the assessee had invested the monies in mutual funds which were disclosed in the accounts maintained and that the source of investments was fully explained. However, as advised by the mutual fund advisor, the assessee opted to reshuffle some schemes of mutual funds. The funds received from some schemes on redemptions were further invested in some other scheme of mutual funds of the same organizations. That the assessee was under impression that as the final realization would be beyond the prescribed limit of exemption, therefore no tax was attracted. The assessee was illadvised by the mutual fund advisor that as the investments continued and therefore there was....
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....tated compensation in the same transaction. The matter relating to the levy of penalty on this issue was considered by the Tribunal and it was held by the Tribunal that this was not a case of concealment of income. It was only a case of difference of opinion as the AO had taken the view that transfer of asset was in A.Y. 2006-07 and that capital gains were also assessable in A.Y. 2006-07. Whereas, in view of the assessee, since the possession had been taken in the Financial Year 2006-07 relevant to A.Y. 2007-08, therefore amount of capital gain was assessable in A.Y. 2007-08 and the assessee had also offered the same in A.Y. 2007-08. The Tribunal, considering the facts, has held that it was a case of difference of opinion and that the issue was a debatable issue but there was no concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal therefore deleted the penalty relating to the similar transaction in the case of the mother of the assessee namely Smt. Asha Laxmikant Babladi. Since the facts of the case of the assessee are identical and are relating to the same transaction, hence respectfully following the above cited decision of the co-o....
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....ing the smallness of the amount and also considering that the assessee has fully disclosed her bank account to the Revenue Authorities but due to some mistake it could not match the bank balance along with accounts, we do not think that it is a case of furnishing of inaccurate particulars of income or concealment of income. 22. In view of our above findings, this appeal of the assessee is allowed and the penalty levied under section 271(1)(c) is hereby ordered to be deleted. 23. Now coming to the appeal of the assessee Smt. Asha Babladi bearing ITA No.344/M/2015 for A.Y. 2004-05. ITA No.344/M/2015 for A.Y. 2004-05 24. In this case the penalty under section 271(1)(c) of the Act has been levied on account of the following additions: (a) Short term capital gain on redemption of mutual funds of Rs. 2,53,690/-. (b) Long term capital gain on redemption of mutual funds of Rs. 1847/-. (c) Capital Receipt being gift received of Rs. 7,50,000/- though full explanation was given to clarify that there was no concealment. 25. So far as the additions in relation to the point (a) & (b) are concerned, the Ld. A.R. of the assessee has submitted that the facts are identical to....