Computation of Capital Gain for taxation

This case involves an appeal concerning the computation of capital gains tax for the assessment year 2013-14. The assessee, who deals in property, initially declared a certain capital gain but later offered a revised figure for taxation. The Assessing Officer made an addition based on a difference in the capital gain calculation, leading to a penalty under Section 271(1)(c) of the Income Tax Act. The assessee appealed this penalty, arguing that the penalty proceedings were invalid as the specific charge was not stated and that the penalty was not leviable since the difference was voluntarily offered for taxation.

IN THE INCOME TAX APPELLATE TRIBUNAL
 DELHI BENCH: ‘G’ NEW DELHI

 BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEMBER
AND
 SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER

 I.T.A. No. 6842/DEL/2017 (A.Y 2013-14)
 (THROUGH VIDEO CONFERENCING)

Sanjeev Garg
C/o. U S Bhargava Advocate, 17,
Ram Nagar, Ghaziabad
Uttar Pradesh
PAN:ACSPG3564B
(APPELLANT)

Vs 

ITO
Ward-4(2)HSIDC Building,
Vanijya Nikunj, Udyog Vihar
Phase-5, Gurgaon
Haryana
(RESPONDENT) 

Appellant by Sh. Somil Agarwal, Adv
Respondent by Sh. Prakash Dubey, Sr. DR

Date of Hearing 30.06.2021
Date of Pronouncement 23.07.2021 

ORDER

PER SUCHITRA KAMBLE, JM

 This appeal is filed by the assessee against order dated 30/08/2017 passed by CIT(A)-Ghaziabad, for assessment year 2013-14.

2. The grounds of appeal are as under:-

“1. That the penalty proceedings and also the penalty order are liable to be quashed because the "charge" had not been specified.

2. That on the facts of the case and under the law, the penalty u/s 271(1) (c) which had been levied by the Id AO and which has been confirmed by the Id CIT(A) deserves to be deleted .

3.That the lower authorities had failed to appreciate that in the given circumstances penalty u/s 271(l)(c)was not leviable, because the assessee had himself offered the difference between the figures of capital gain initially computed and capital gain lately computed , for taxation.”

3. The assessee is an individual and earned income from purchase and sale of properties and shown income under the head capital gain. The assesseeclaim loss of Rs.1,50,000/- from house property as the interest paid on house loan. He also claimed deduction of Rs. 1,00,000/- under Chapter VIA. The assessee filed his return of income electronically on 30/03/2015 declaring totalincome of Rs. 56,95,330/-. The assessment was completed u/s 142(3) on 5/1/2016 thereby making addition of Rs.9,38,333/- in respect of difference found in calculation sheet of capital gain. Thus, his total income was assessedat Rs. 66,33,660/- penalty notice u/s 271(1)(c) was issued on 1/7/2016. The penalty order u/s 271(1)(c) of the Income Tax Act, 1961 was passed on 27/7/2016. Thereby imposing penalty of Rs.1,93,296/-.

4. Being aggrieved by the penalty order, the assessee filed appeal before the CIT (A). The CIT (A) dismissed the appeal of the assessee.

5. The Ld. AR submitted that we notice dated 1/7/2016 has not mentioned the actual limb of Section 271(1)(c) under which the penalty was levied. The Ld. AR relied upon the decision of the Hon'ble Karnataka High Court in case of CIT v. Manjunatha Cotton & Ginning Factory 359 ITR 565 (Karnataka) in which SLP against this judgment has been dismissed by Hon’ble Supreme Court in VeerbhadrappaSangappa (Supra). The Ld. AR also relied upon the decision of the Hon’ble Delhi High Court in case of PCIT Vs. M/s Sahara India Life Insurance Company Ltd. ITA No. 475/20 order dated 2/8/2019.

6. The Ld. DR submitted that the notice has mentioned both the limbs i.e. concealing particulars of income and furnishing inaccurate particulars of income. Thus, the Ld. DR submitted that the notice is valid. The Ld. DR relied upon the assessment order, penalty order and the order of the CIT(A). 

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