AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (10) TMI 782
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....rom capital gain inadvertent and the receipts were fully accounted for and disclosed in the audited balance sheet and sale deed was duly registered and was in public domain. 2. The Appellant craves leave to add to/or amend and/or modify and/or alter and/or delete the aforesaid grounds of appeal." Additional Grounds Ground 3: "That the notice issued under section 271(l)(c)/274-ofthe Act, and the order passed under section 271(1) (c) of the Act are illegal, bad in without jurisdiction." Ground 4: "That satisfaction has been recorded white completing the assessment proceedings, hence the notice issued under section 274 of the Act, and the order passed under section 27l(l)(c) of the Act are illegal, bad in taw and without jurisdiction." Ground 5: "That the penalty has been initiated vide notice under section 271(l)(c)/274 of the Aft without any specific charge, hence, the said notice and the order passed under section 27l(l)(c) of the Act are illegal, bad in law and without jurisdiction." 3. The brief facts of the case are that the assessee filed its return of income for the A.Y. 2011-12 on 27.09.2011 declaring total income to the tune of Rs.Nil. The case was selected for sc....
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....able property located át Mumbai on 31.08.2010 and the assessee failed to disclose the long term capital gain to the tune of Rs. 1,01,36,060/-, therefore, the Assessing Officer the penalty was levied in pursuance of the order dated 29.10.2014. The assessee took the legal ground on account of defective notice u/s 271(1)(c) of the Act which was without tick off any limb to levy the penalty. The penalty order dated 28.03.2014 is on the file in which the AO nowhere tick off any limb to levy the penalty. It is not in dispute that the penalty u/s 271(c) of the Act is leviable on account of the concealment of particular of income and on account of furnishing the inaccurate particulars of income. Both have different connotations. In this regard, the Hon'ble Supreme Court has appreciated the distinction between both the limb in the case Dilip N. Shroff 161 taxman 218 (SC). As per the record the assessment order speaks about levying the penalty on account of furnishing the inaccurate particulars of income and concealment of particulars income but the notice nowhere specify any limb to levy the penalty. The notice is not justifiable in view of the law settled by the Bombay High Court ....
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....t of the particulars of income as well as furnishing of inaccurate particulars of income. Quite clearly, non-striking-off of the irrelevant limb in the said notice does not convey to the assessee as to which of the two charges it has to respond. The aforesaid infirmity in the notice has been sought to be demonstrated as a reflection of non-application of mind by the Assessing Officer, and in support, reference has been made to the following specific discussion in the order of Hon'ble Supreme Court in the case of Dilip N. Shroff (supra):- "83. It is of some significance that in the standard proforma used by the Assessing Officer in issuing a notice despite the fact that the same postulates that inappropriate words and paragraphs were to be deleted, but the same had not been done. Thus, the Assessing Officer himself was not sure as to whether he had proceeded on the basis that the assessee had concealed his income or he had furnished inaccurate particulars. Even before us, the learned Additional Solicitor General while placing the order of assessment laid emphasis that he had dealt with both the situations. 84. The impugned order, therefore, suffers from non-application of mi....
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....elevant portion of notice would not invalidate the imposition of penalty u/s 271(1)(c) of the Act. We have carefully considered the said argument set-up by the ld. CIT-DR and find that a similar issue had come up before our coordinate Bench in the case of Dr. Sarita Milind Davare (supra). Our coordinate Bench, after considering the judgment of the Hon'ble Bombay High Court in the case of Smt. Kaushalya & Ors., (supra) as also the judgments of the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra) and Dharmendra Textile Processors, 306 ITR 277 (SC) deduced as under :- "12. A combined reading of the decision rendered by Hon'ble Bombay High Court in the case of Smt. B Kaushalya and Others (supra) and the decision rendered by Hon'ble Supreme Court in the case of Dilip N Shroff (supra) would make it clear that there should be application of mind on the part of the AO at the time of issuing notice. In the case of Lakhdir Lalji (supra), the AO issued notice u/s 274 for concealment of particulars of income but levied penalty for furnishing inaccurate particulars of income. The Hon'ble Gujarat High Court quashed the penalty since the basis for the penalty proceedings dis....
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....fficer records that the penalty proceedings u/s 271(1)(c) of the Act are to be initiated for furnishing of inaccurate particulars of income. However, in the notice issued u/s 274 r.w.s. 271(1)(c) of the Act of even date, both the limbs of Sec. 271(1)(c) of the Act are reproduced in the proforma notice and the irrelevant clause has not been struck-off. Quite clearly, the observation of the Assessing Officer in the assessment order and non-striking off of the irrelevant clause in the notice clearly brings out the diffidence on the part of Assessing Officer and there is no clear and crystallised charge being conveyed to the assessee u/s 271(1)(c), which has to be met by him. As noted by the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra), the quasi-criminal proceedings u/s 271(1)(c) of the Act ought to comply with the principles of natural justice, and in the present case, considering the observations of the Assessing Officer in the assessment order alongside his action of non-striking off of the irrelevant clause in the notice shows that the charge being made against the assessee qua Sec. 271(1)(c) of the Act is not firm and, therefore, the proceedings suffer fro....
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....s of property and copies of agreement of purchase and sales of said property. On scrutiny of the said agreements, the A.O, worked out LTCG of Rs. 59.52,742/- on sale of aforesaid property which was added to the total income of the appellant *p 6.2 In the course of appellate proceedings, it is submitted that the A.O, had not considered the revised computation of total income filed by the appellant. IT is submitted that there was a clerical error due to which. LTCG amounting to Rs. 2.35,44,673/- arising on sale of property for Rs. 3.20 crores pertaining to A.Y.2011-12 has been included m the accounts of A.Y.20IM3. It is pointed out that there was sale of another property during the period for a consideration of Rs. 2.25 crores on which the A.O. has calculated aforesaid 1.TCG of Rs,59r52,742/-. It is argued that having already brought to ta\ the LTCG on sale of property in A.Y.2G11-12, the A.O. ought to have worked out only differential amount of LTCG in the A.V. under consideration. 63.1 T have considered the submissions of the appellant and perused the materials available on record. The issue for adjudication Is whether the A.O. was justified in making addition of LTCG of Rs. 59....
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....operty is, therefore, upheld. From perusal of the computation of total income as per the assessment order, it is noticed that the A.O. had taken total income as per computation filed by the appellant at a loss of Rs. 24.569/- which represented profit before tax as per the P & L Account of the appellant for the year ended 31.03.2012. It Is observed that the appellant had credited short term capital gain of Rs. 2,35,44,673/- (sale consideration of Rs. 3,20,00.000- cost Of acquisition of Rs. 64.55,327) on sale of 2S5G sq.ft of arya in Raghuvanshi Mills Compound, Lower Parel, Mumbai to its P & L Account which has to be excluded because it pertains to the preceding A Y 2011-12, At the same time it is also observed that the appellant had earned LTCG of Rs, 1,60,71.4297- (sale consideration of Rs,2,25,00,000- cost of acquisition of Rs. 64,26,571) on sale of 1300 sq.ft. area in the said building vide Sale Deed dated 11.11.2011 pertaining to the A.Y. under consideration which ought to have been credited to the P & L Account but was not so included. Therefore, the A.O, is directed to re-compute the total income of the appellant after considering the net result of these two items while givi....