The Principal Commissioner Of Income Tax-1 v. Sushilaben D Shah

C/TAXAP/270/2020 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 270 of 2020 ========================================================== THE PRINCIPAL COMMISSIONER OF INCOME TAX-1 VersusSUSHILABEN D SHAH ========================================================== Appearance:MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE THE CHIEF JUSTICE MR. VIKRAM NATHandHONOURABLE MR. JUSTICE J.B.PARDIWALA Date : 10/09/2020 ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1.This tax appeal under Section 260A of the Income Tax Act, 1961 is at the instance of the revenue and is directed against the order passed by the Income Tax Appellate Tribunal, “B” Bench, Ahmedabad dated 26.07.2019 in the ITA No.627/Ahd/2018 for the A.Y. 2006-07. The Revenue has proposed the following question of law for the consideration of this Court; "Whether the Appellate Tribunal was correct in law and on facts in deleting the penalty of Rs.50,330/- levied under section 27(1)(c) on bogus LTCG claim of the assessee on transaction in penny stocks of Mukesh Choksi Group of accommodation entry providers?" 2.The Appellate Tribunal, while allowing the appeal filed by the assesseee held as under; '6. We have considered the rival submissions on the issue as pointed out on behalf of the assessee. It is not in dispute that the assessee has furnished the supporting bills and details of payments in support of transactions reported to be long term capital gain. It was contended that entire addition is based on the statement of Mr. Mukesh Chokshi which was never provided to the assessee. It was also pointed out that it is quite possible that Mr. Mukesh Chokshi has not included the transactions with assessee in his statement at all. 7. At this stage, we bear in mind that incidence of penalty under s. 271(1)(c) of the Act is not automatic and should not be imposed merely because it is lawful to do. Considering the smallness of the amount involved, we consider it expedient to give benefit of doubt to the assessee owing to mitigating circumstances viz; the absence of copy of statement of Mr. Mukesh Chokshi or any other substantive material. The assessee has supported the face value of transactions with bills and payments. In the backdrop of ambiguity in circumstances, it is difficult to hold that the explanation offered by the assessee is blatantly false. We are thus inclined to exonerate the assessee from the incidence of penalty. However, in peculiar circumstances, this view shall not operate as precedent in any manner. " 3.Having regard to the reasons assigned by the Appellate Tribunal, referred to above, we see no good reason to entertain this appeal. Even otherwise, in our opinion, the question of law, as proposed, cannot be termed as a substantial question of law. 4.In the result, this appeal fails and is hereby dismissed. (VIKRAM NATH, CJ) (J. B. PARDIWALA, J)