Ita/265/2013 Of The Commissioner Of Income Tax Rohtak v. Stock Home India Ltd Rohtak

ITA No. 265 of 2013 =|. IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 265 of 2013 (O&M)Date of Decision: 28.1.2014 | Commissioner of Income Tax, Rohtak ...Appellant 2"+%3% Stock Home Inala Ltd.. ... Respondent CORAM:-HON BLE MR. JUSTICE AJAY KUMAR MITTAL.HON BLE MRS. JUSTICE ANITA CHAUDRRY. PRESENT: Mr. Inderpreet Singh, Advocate for the appellant. Mr. Panka] Jain, Advocate andMr. Divya Suri, Advocate for the respondent. AJAY KUMAR MITTAL, J. 1.This appeal has been filed by the revenue under Section260A of the Income Tax Act, 1961 (in short “the Act’) against the orderdated 05.04.2013 passed by the Income lax Appellate ITribunal, DelnBench “G’, New Delhi (hereinafter referred to as “the Tribunal’) for theassessment year 2007-08, claiming the following substantial questionsof law:- “Q_Whether Hon'ble ITAT is justified in law indeleting the penalty u/s 271(1)(c) of the Actimposed by the Assessing Officer as theassessee filed the return of Income withoutcomputing the correct tax liability u/s 115JB ITA No. 265 of 2013 =2= rnw.s. 10(38) of the Act and thus failed indisclosing the true and correct tax liability u/s115JB of the Act: the Honbie ITIATI failed tappreciate the fact that the assessee companyfiled revised computation of income only afterdetection of concealment by the Assessing}Officer? onVVnetner on tne facts and in the circumstanceof the case, the Honobie ITAT ts justified in lawby relying upon the judgment of CIT Vs)Reliance Petro Products (P) Ltd. the facts ofwhich are quite distinct and are, therefore, notapplicable in the instant case’ 2 Briefly the facts as pleaded in the instant appeal may benoticed. [ne assessee was deriving income under the nead “Businessand Profession’ by trading in share and also from investment in shares.The assessee filed its return of income for the assessment year 2007-08on 30.9.2007 declaring a total income of41,53,56,681/-. The total taxcomputed by the assessee in the computation of income was=30,42,8/738/- During the course of assessment proceedings, theAssessing Officer noted that the assessee was liable to pay tax underthe provisions of Section 115JB of the Act. Further, Form No. 29Brequired to be filed under Section 115JB(4) of the Act was not filed. Theassessee claimed exemption under Section 10(38) of the Act on thelong term capital gains on sale of securities/shares. As per proviso tosection 10(38) of the Act, the profit on long term capital gain was to beadded while computing the book profit and tax liability under Section ITA No. 265 of 2013a 115JB of the Act. [ne case was selected for scrutiny. During the courseof assessment proceedings, the assessee filed revised computation ofIncome and Form No.29B on 4.12.2009. [he book profit of theassessee was computed at.L4,//,25,61//- and the tax liability undersection 115JB of the Act was computed at.447,/2,5602/- (10% of thebook profit). Ine Assessing Officer vide order dated 18.12.2009(Annexure A-!) framed assessment and initiated penalty proceedingsunder Section 271(1)(c) of the Act. The assessee did not challenge theassessment order in appeal. Thereafter, a penalty of413,58 ,452/- wasimposed upon the assessee vide order dated 28.6.2010 (Annexure A-Il).Feeling aggrieved, the assessee filed an appeal before theCommissioner of Income Tax (Appeals) [for brevity “the CIT(A)] whovide order dated 10.3.2011 (Annexure A-lil) allowed the appeal anddeleted the penalty imposed by the Assessing Officer. The said order ofthe CIT(A) was challenged by the revenue by way of appeal before theTribunal. The Tribunal vide order dated 5.4.2013 (Annexure A-IV)upheld the order of the CIT(A) and dismissed the appeal. Hence, thepresent appeal by the revenue. 3 Learned counsel for the appellant submitted that the CIT(A)as well as the I[ribunal nad erred In deleting tne penalty. According tothe learned counsel, proviso to Section 10(38) of the Act which wasinserted w.e.f. 1.4.2007, the long term capital gains on shares was to beadded while computing the book profit as per the provisions of Section115JB of the Act. The assessee had filed revised computation only afterthe concealment was detected by the Assessing Officer on issuance ofnotice under Section 142(1) and 143(2) of the Act. It was urged that thereliance of the Tribunal on the decision of the Apex Court in>CIT v. ITA No. 265 of 2013 =4. Reliance Petro Products Ltd. 230 CTR 320 (SC)was misplaced. 4 On the other hand, learned counsel for the assesseebesides supporting tne order passed by the I[ridbunal submitted thaFinance Act of 2006 amended w.e.f. 1.4.200/ whereby proviso wasinserted for the first time which was made relevant for the assessmentyear in question. It was under bonafide belief, unaware of theamendment whereby proviso was Inserted, the long term capital gainson the snares was not taken Into consideration wnile determining thebook profits under Section 115JB of the Act. It was stoutly argued thatthe ITridunal nas rightly placed reliance uponReliance Petro ProductsLtd's case (supra)and deleted the penalty. 5,Aiter nearing learned counsel for the parties, we Tindconsiderable force in the submissions made by the learned counsel forthe respondent. [ne Iribunal wnile deleting the penalty nad noticed as 3&5"+'A Having gone through the orders of theauthorities below we find that during the course ofassessment proceedings, the AO observed that theassessee was liable under the provisions of section115JB and that the assessee has not filed form No.29B which is required to be filed u/s 115JB(4) of theAct. Ine assessee nad claimed long term capitalgains on the sale of securities/shares as exempt u/s10(38), the profit on long term capital gain Is to beadded while computing the book profit and tax liabilityu/s 115JB. The A.O. issued show cause notice in thisregard to the assessee. The assessee thereafter revised the computation of income. [ne AO initiatedpenalty proceedings u/s 2/1(1)(c) of the Act andlevied penalty of RS.13,98,492/- with this finding thatthe assessee had filed revised computation of incomeonly after detection of concealment of facts. The Ld,CIT(A) has deleted the penalty accepting thecontention of the assessee that it nad neitherconcealed the particulars of income nor furnishedInaccurate particulars of Income and relied on thedecision of Hon'ble Supreme Court in the case of CITVs. Reliance Petro Products Ltd. 230 CTR 320 (SC)and of Hon'ble Punjab & Haryana High Court in thecase of CIT Vs. SSP Pvt. Ltd., 35 ITR 349 (P&R),Tne explanation of the assessee before the La. CIT(A) remained that proviso to section 10(38) of the Actwas inserted w.e.f. 01.04.2007 and prior to that longterm capital gain on shares was not to be consideredfor applicability of MAT provisions. When. thisamendment came to the knowledge of the assessee,it immediately obtained the auditors report in the FormNo. 29B and filed the same along with revisedcomputation of income. It was accordingly arguedthat assessee had neither concealed the particulars ofincome nor furnished inaccurate particulars of incomeso as to attract the provisions of section 271(1)(C) ofthe Act. We do not have any reason to doubtbonafide of the assessee in the above explanation. It Is alsO an undisputed fact that the assessee hadTurnisned details of Income and expenditure in itsreturn which details in themselves were not found tobe inaccurate. Thus, Ld. CIT(A) has rightly held that itcannot pe said tnat assessee had concealedparticulars of income or _ furnished inaccurateparticulars thereof. In the case of CII Vs. RellancePetro Products (P) Ltd. (Supra) followed py the La.CIT(A) it nas been held that furnishing of Inaccurateparticulars mean details specified in return which arenot exact or correct, not according to truth orerroneous and if the assessee furnishes details ofIncome and expenditure tn its return which details inthemselves are not found to be Inaccurate wnicncannot pe said that assessee nas concealedparticulars of income or _ furnished inaccurateparticulars merely because in relation to thoseparticulars as claim for deduction is made which is notaccepted. We thus do not find infirmity in the firstappellate order on the issue. Ihe same Is upheld.Tne ground Is accordingly rejected. 6 It was not disputed that vide Finance Act, 2006 proviso wasinserted in Section 10(38) of the Act w.e.f. 1.4.200/7 and prior to thinsertion of the aforesaid proviso under Section 10(38) of the Act, thelong time capital gains on snares was not required to be Included wniledetermining the book profits under Section 115JB of the Act. The saidproviso reads thus:- =Proviaedthat the income by way of long-term capitalgain of a company shall be taken Into account incomputing the book profit and iIncome-tax payableunder section 115JB.| [.Accoraing to it, the long term capital gains on snares Is to beincluded while determining the book profits. It was for the first time thatfor the assessment year 2007-08 onwards, the aforesaid provisionbecame applicable. Ihe plea of the assessee regarding the bonafidesnas been accepted by the Iribunal. [here is nothing to doubt theveracity of the aforesaid findings recorded by the Iribunal. 8.In view of the above, no question of law much less asubstantial question of law arises in this appeal for consideration of thisCourt. Accordingly, finding no merit in the appeal, the same is herebyaismissead. (AJAY KUMAR MITTAL) JUDGE January 28, 20147;% (ANITA CHAUDHRY) JUDGE