TaxTMI 
TaxTMI 
TaxTMI 
2019 (8) TMI 1817
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....f convenience, we take up the assessee's quantum appeal in ITA No. 2680/Mds/2018. ITA No. 2680/Mds/2018: 2. The brief facts of the case are that the appellant is an individual, engaged in the Two wheeler financing. The return of income for the AY 2010- 11 was filed on 31.03.2011 disclosing total income of Rs. 1,99,990/-. Against the said return of income, the assessment was completed by Income Tax Officer, Non-Corporate Ward 5(1), Chennai vide order dated 26.03.2013 passed u/s. 143(3) of the Income Tax Act, 1961 (for short 'the Act') at total income of Rs. 44,10,950/-. Subsequently, when the Assessing Officer noticed that while computing the capital gains, the assessee had claimed a sum of Rs.5,50,381/- towards addition to the cost....
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..... On the other hand, Senior ld.DR placed reliance on the orders of lower Authorities. 6. We have heard the rival contentions and perused the material available on record. The only issue involved in the present appeal relates to whether the cost of improvement borne by the previous owner in the case of acquisition of the property by one of the modes specified u/s.49 of the Act is allowable deduction for the purpose of calculating gains. The issue was considered by the Hon'ble Bombay High Court in the case of C.I.T Vs. MANJULA J. SHAH reported in [2012] 204 Taxman 691 (Bom) wherein it has been held as follows:- "22. The object of giving relief to an assessee by allowing indexation is with a view to offset the effect of inflation. As per th....
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....ar in which the previous owner first held the asset and not the year in which the assessee became the owner of the asset.". The ratio of the decision of the Hon'ble Bombay High Court is clearly applicable to the facts of the case. Accordingly, we direct the Assessing Officer to allow the cost of improvement borne by the previous owner as inflated by indexation. 7. In the result, the appeal of assessee is allowed. ITA No. 2681/Mds/2018: 8. This appeal of the assessee is directed against the Commissioner of Income-tax (Appeals)-5, Chennai dated 02.02.2016 for assessment year 2010-11 confirming the penalty levied u/s.271(1)(c) of the Income Tax Act, 1961 (in short "the Act") by the Assessing Officer. 9. At the outset, it is noticed that ....
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....t is necessary that there should be an inference of concealment at the time of initiation of the proceedings in the notice issued u/s 274 read with 271 (1)(c) of the Act. - Vs. L&T Finance Ltd.(Bombay High Court) 3. Without prejudice, the penalty is not imposable since the AO /CIT (A) based his reasons on the strength of the orders of the appellate order of the difference assesse without application of mind in regard to penalty proceedings in the case of the appellant (a) It is well settled that the assessment and penalty proceedings are separate distinct and hence the findings given in the assessment are not relevant and penalty cannot be based on such findings and hence the order is void and nullity. In the penalty proceedings, the au....
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....Assessing Officer had initiated the penalty proceedings u/s.271(1)(c) of the Act on the ground that assessee had failed to disclose the capital gains on sale of immovable property and also made a wrong claim of Rs.2,50,000/- u/s.35(1)(iii) of the Act. In respect of show cause notice, it is submitted that the addition was made only for assessee's inability to produce evidence in respect of construction of a new house, which is eligible for deduction u/s.54 of the Act and therefore, it is submitted that it is not a fit case warranting levy of penalty u/s.271(1)(c) of the Act. However, the Assessing Officer rejected the said explanation vide order dated 24.09.2013 and imposed penalty of Rs.8,15,958/- u/s.271(1)(c) of the Act. Being aggrieved, ....