Principal Commissinoer Of Income Tax 1 v. Prakash Chandra S Soni Huf

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/TAX APPEAL NO. 976 of 2018 ========================================================== PRINCIPAL COMMISSINOER OF INCOME TAX 1 VersusPRAKASH CHANDRA S SONI HUF ========================================================== Appearance: MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 for the RESPONDENT(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE AKIL KURESHIand HONOURABLE MR.JUSTICE B.N. KARIA Date : 20/08/2018 ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Revenue has filed this appeal against the judgment of the Income-tax Appellate Tribunal dated 26.2.2018. Following question is presented for our consideration. judgment of the Income-tax Appellate Tribunal dated 26.2.2018. Following question is presented for our consideration. “Whether the Appellate Tribunal has substantially erred in deleting the penalty u/s.271(1)(c) of the Act levied on account of under valuation of closing stock ?” 2. Issue pertains to penalty imposed by the Assessing Officer under Section 271(1)(c) of the Income-tax Act, 1961 (the 'Act' for short). The Tribunal deleted the penalty Assessing Officer under Section 271(1)(c) of the Income-tax Act, 1961 (the 'Act' for short). The Tribunal deleted the penalty imposed by the Assessing Officer and confirmed by the CIT (Appeals) on the ground that the issue was highly debatable and that there was no filing of inaccurate particulars or concealment of income by the assessee. The Tribunal observed as under:- “9. We have given a thoughtful consideration to the orders of the authorities below. It is true that the business of the proprietary concern M/s. Suvarnamahal was continued as business of the partnership firm on and from 25.02.2008. In the case of ALA Firm, the facts were that the firm was dissolved and the business was discontinued. Therefore, the stock in trade were re-valued at market price whereas the facts of the case in hand show that the business continued in the hands of the partnership firm and the stock in trade were never valued. The facts of the case in hand are in line with the facts considered by the Hon'ble Supreme Court in the case of Shakti Trading Company (supra). In our considered opinion, when the method adopted by the assessee was duly supported by the decision of the Hon'ble Supreme Court, it cannot be said that the assessee has filed inaccurate particulars of income or has concealed the particulars of income. Moreover, when there are two decisions of the Apex Court, one in favour of the assessee and one in favour of the revenue itself makes the issue highly debatable. In our understanding of the law, penalty cannot be levied u/s. 271(1)(c) of the Act under such circumstances. We, accordingly, set aside the findings of the ld. CIT(A) and direct the A.O. To delete the penalty so levied. Appeal filed by the assessee is allowed.” C/TAXAP/976/2018 ORDER 3. We see no reason to interfere. Tax Appeal is dismissed. dismissed. (AKIL KURESHI, J) K.K. SAIYED (B.N. KARIA, J)