Principal Commissinoer Of Income Tax 1 v. Prakashchandra S Soni Huf

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/TAX APPEAL NO. 977 of 2018 ========================================================== PRINCIPAL COMMISSINOER OF INCOME TAX 1 VersusPRAKASHCHANDRA 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 is in appeal against the judgment of the Income-tax Appellate Tribunal dated 26.2.2018 raising following question for our consideration. “Whether the Appellate Tribunal has substantially erred in deleting the penalty u/s.271(1)(c) of the Act of Rs.1,13,30,000/- which was levied by the AO on the income arising from transfer of Trademark/Goodwill amount to Rs.5 crores which was not disclosed in the return of income ?” 2. Issue pertains to penalty under Section 271(1)(c) of the Income-tax Act, 1961. The respondent assessee is an H.U.F. and who is partner in the partnership business. Income C/TAXAP/977/2018 ORDER relates to valuation of trademark and goodwill. The Tribunal held that the proportionate income falling at the hands of the assessee would be taxed as capital gain and not business income. Eventually the question of imposing penalty arose. While confirming view of the CIT (Appeals), the tribunal under the context of penalty observed as under : “18. We have given a thoughtful consideration to the orders of the authorities below. Insofar as the treatment of the consideration of Rs.5 crores is concerned, the dispute is settled and the same has to be taxed u/s.45 of the Act. Admittedly, it is a fact that in spite of the findings of the Tribunal, the A.O. Treated the same as income under the business head. The provisions of Section 45(3) of the Act clearly states that for the purposes of Section 48, the amount recorded in the books of accounts as the value of the capital assets shall be deemed to the full value of the consideration. In our understanding of the facts, the HUF proprietary concern could not have envisagedthevalueofthe trademark/goodwill to be recorded by the partnership firm in its books of accounts. Therefore, the assessee cannot be held liable for concealing any particulars of the its income. Moreover, the A.O. Has not taxed he income in the head of income as directed by the Tribunal but has taxed the same under a different head of income. On these facts, we do not find this to be a case for the C/TAXAP/977/2018 ORDER levy of penalty u/s.271(1)(c) of the Act and therefore there is no error or infirmity in the findings of the ld. CIT(A). Appeal filed by the Revenue is dismissed.” 3. We see no reason to interfere. Tax Appeal is dismissed. dismissed. (AKIL KURESHI, J) K.K. SAIYED (B.N. KARIA, J)