ACIT, Hyderabad v. M/s Parklane Medical Diagnoistic, Secunderabad

ITA 1011/HYD/2010 | 2006-2007
Pronouncement Date: 14-12-2011 | Result: Dismissed

Appeal Details

RSA Number 101122514 RSA 2010
Assessee PAN ACFPB2638K
Bench Hyderabad
Appeal Number ITA 1011/HYD/2010
Duration Of Justice 1 year(s) 5 month(s) 2 day(s)
Appellant ACIT, Hyderabad
Respondent M/s Parklane Medical Diagnoistic, Secunderabad
Appeal Type Income Tax Appeal
Pronouncement Date 14-12-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 14-12-2011
Date Of Final Hearing 05-07-2011
Next Hearing Date 05-07-2011
Assessment Year 2006-2007
Appeal Filed On 12-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH HYDERABAD BEFORE SHRI CHANDRA POOJARI A.M. AND SMT. ASHA VIJAYARAGHAVAN J.M. ITA NO.1011/HYD/2010 ASSESSMENT YEAR 2006-07 THE ACIT CIRCLE 10(1) HYDERABAD VS M/S PARK LANE MEDICAL DIAGONISTIC SECUNDERABAD (PAN AACFP B2638 K) APPELLANT RESPONDENT APPELLANT BY : SHRI B.V. PRASAD REDDY RESPONDENT BY : SHRI A. KESAVA RAO DATE OF HEARING : 1.11.2011 DATE OF PRONOUNCEMENT : 16.12.2011 ORDER PER ASHA VIJAYARAGHAVAN J.M. THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AG AINST THE ORDER PASSED BY THE CIT(A) VI HYDERABAD DATED 12. 4.2010 AND PERTAINS TO THE ASSESSMENT YEAR 2006-07. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ON 15.11.200 6 ADMITTING TOTAL INCOME AT RS.71 69 115/-. SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLE TED U/S 143(3) OF THE IT ACT DETERMINING THE TAXABLE INCOME AT RS. 1 24 9 115/-. 3. IN THE RETURN OF INCOME FILED BY THE ASSESSEE IT WAS NOTICED THAT THE ASSESSEE FIRM WAS TAKEN OVER BY M/S NLDL L ABORATORIES AND DIAGNOSTICS PVT. LTD. GK MARG LOWER PAREL MU MBAI ON 1.7.2005 FOR A TOTAL CONSIDERATION OF RS.1 10 00 00 0. FURTHER THE ASSESSEE HAS MENTIONED THAT THE DIFFERENCE BETWEEN PARTNERS ITA NO.1011/HYD/2010 M/S PARK LANE MEDICAL DIAGNOSTIC SBAD. 2 CAPITAL ACCOUNTS AS ON 1.7.2006 AND THE TOTAL SALE CONSIDERATION RECEIVED ON THE SAID SLUMP SALE WAS TREATED AS LONG TERM CAPITAL GAIN. THE DETAILS WERE CALLED FOR TO VERIFY THE GE NUINENESS OF THE TRANSACTION AND THE TAXABLE INCOME COMPUTED BY THE ASSESSEE ON THE SLUMP SALE. 4. ON EXAMINATION OF THE AGREEMENT BETWEEN BOTH TH E PARTIES IT WAS NOTED THAT THE ASSESSEE FIRM WAS TAKEN OVER BY M/S NLDL LABORATORIES AND DIAGNOSTICS P LTD. FOR A TOTAL COM POSITE SALE PRICE OF RS.1 50 00 000 AS EVIDENT FROM CLAUSE 3.1 OF THE SAID AGREEMENT DATED 1.7.2005. 5. THE ASSESSEES LEARNED AUTHORIZED REPRESENTATIV E WAS CONFRONTED BY ASSESSING OFFICER WITH THE FACTS AS T O WHY THE CONSIDERATION RECEIVED AGAINST THE SLUMP SALE SHOUL D NOT BE TAKEN AT RS.1 50 00 000/- AS AGAINST THE SALE CONSIDERATI ON SHOWN BY THE ASSESSEE AT RS.1 10 00 000/- IN THE RETURN OF INCOM E FILED. 6. AFTER EXAMINING ALL THE DETAILS THE DIFFERENTIA L AMOUNT ON SALE CONSIDERATION AMOUNTING TO RS.40 00 000/- WAS ADDED BY THE ASSESSING OFFICER TO THE TOTAL INCOME IN THE ASSESS MENT ORDER DATED 1.12.2008. 7. FURTHER IT WAS ALSO NOTICED BY THE ASSESSING O FFICER THAT THE ASSESSEE HAS DEDUCTED AN AMOUNT OF RS.41 16 191/- A S REPRESENTING PARTNERS CAPITAL FROM THE TOTAL SALE C ONSIDERATION RECEIVED FROM M/S NLDL REPRESENTING PARTNERS CAPIT AL AS AGAINST THE ACTUAL PARTNERS CAPITAL IN THE BOOKS OF ACCOUN T AMOUNTING TO RS.30 36 191/- AS ON DATE OF SLUMP SALE. ITA NO.1011/HYD/2010 M/S PARK LANE MEDICAL DIAGNOSTIC SBAD. 3 8. THUS THE ASSESSING OFFICER HELD THAT THE WRONG CLAIM OF RS.10 80 000 (RS.41 16 191 RS.30 36 191) REPRESEN TING EXCESS PARTNERS CAPITAL IS TO BE DISALLOWED AND ACCORDINGL Y THE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE IN THE AS SESSMENT ORDER DATED 1.12.2008. 9. THUS IN THE ASSESSMENT ORDER DATED 1.12.2008 A DDITION OF RS.40 LAKHS REPRESENTING DIFFERENTIAL SALE CONSIDER ATION ON SLUMP SALE NOT TAKEN IN THE COMPUTATION OF INCOME AND A F URTHER AMOUNT OF RS.10 80 000/- REPRESENTING WRONG CLAIM OF DEDUC TION OF PARTNERS CAPITAL FROM THE TOTAL SALE CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF TAXABLE CAPITAL GAINS WAS ADDED B ACK TO THE TOTAL INCOME. 10. PENALTY PROCEEDINGS WERE INITIATED U/S 271(1)( C) OF THE IT ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME. T HE ASSESSEE SUBMITTED ITS EXPLANATION VIDE HIS LETTER DATED 8.6 .2009 WHICH IS REPRODUCED HEREUNDER : WE HAVE PAID A TOTAL INCOME TAX DEMAND OF RS.9 48 000/- FOR THE ASSESSMENT YEAR 2006-07 BEFORE 31.3.2009 AS COM MITTED TO YOU (OUT OF TOTAL DEMAND OF RS.14 83 851/- AN AM OUNT OF RS.9 48 000/- IS PAID AND BALANCE OF RS.4 LAKHS ALO NG WITH INTEREST IS TO BE ADJUSTED FOR WHICH WE HAVE FILED AN APPLICATION U/S 154 OF IT ACT 1961. WE HAVE PAID ALL THE TAXES AS PER COMMITMENT AND CO OPERATED WITH THE DEPARTMENT FOR THE EARLY ASSESSMENT OF OUR CASE. WE ARE REGULAR IN FILING OUR RETURNS FOR THE PAST SEVE RAL YEARS AND NEVER DEFAULTED IN PAYING OUR DUES. 11. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLA NATION OF THE ASSESSEE AND IMPOSED THE PENALTY OF RS.11 35 015/- BY HOLDING AS UNDER : ITA NO.1011/HYD/2010 M/S PARK LANE MEDICAL DIAGNOSTIC SBAD. 4 A) THAT THE ASSESSEE FAILED TO EXPLAIN THE NON INCL USION OF RS.40 LAKHS IN THE FULL VALUE OF CONSIDERATION FOR COMPUTATION OF CAPITAL GAIN. B) THAT THE ASSESSEE FILED A REVISED COMPUTATION OF INCOME AFTER NON INCLUSION OF THE AMOUNT WAS BROUGHT TO HI S NOTICE IN COURSE OF ASSESSMENT PROCEEDING. IT WAS OBSERVED T HAT THE ADDITIONAL AMOUNT WAS OFFERED AFTER DETENTION OF CO NCEALMENT. C) THAT THE ASSESSEE MADE A WRONG CLAIM BY ENHANCIN G THE CAPITAL BY A SUM OF RS.10 80 000/- FOR THE PURPOSE OF WORKING OUT CAPITAL GAIN ARISING OUT OF THE SLUMP SALE. D) THAT DESPITE THE FACT THAT THE ASSESSEE AGREED F OR ADDITION OF THE AMOUNT SUCH AN OFFER DOES NOT AMOUNT TO AN AGREEMENT TO SAVE THE ASSESSEE FROM PENAL CONSEQUENCES. E) WHILE IMPOSING THE PENALTY THE ASSESSING OFFICE R RELIED ON THE FOLLOWING DECISIONS: 1. TUBE FABRICS INDIA LTD. (210 ITR 1035) (DELHI) 2. DURGA TIMBER WORKS VS. CIT (79 ITR 63) (SC) 3. CIT VS. KRISHNA & CO. (120 ITR 144) (MAD.) 4. WESTERN TEXTILES VS. CIT (112 ITR 1048) (BOM) 5. CIT VS. POPULAR LUNGHI CO. (238 ITR 229) (MAD. ) 6. 259 ITR 99 (SC) 7. DHARMENDRA TEXTILE PROCESSORS (306 ITR 277) (SC) 12. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FILED A DETAILED WRITTEN SUBMISSION REQUESTING FOR DELETI ON OF PENALTY BEFORE THE CIT(A). THE MAIN FEATURES OF THE SUBMIS SION ARE AS FOLLOWS: 13. ON THE ISSUE OF ADOPTION OF ENHANCED CONSIDERA TION BY RS.40 LAKHS AND ALLEGED EXCESS CLAIM OF RS.10 80 000/- ON ACCOUNT OF CAPITAL BALANCE FOR THE PURPOSE OF COMPUTATION CAPI TAL GAIN IT WAS ITA NO.1011/HYD/2010 M/S PARK LANE MEDICAL DIAGNOSTIC SBAD. 5 VEHEMENTLY CONTENDED THAT SUCH A VIEW IS FACTUALLY INCORRECT ON THE FOLLOWING REASON : THAT THE EXISTENCE OF AN AGREEMENT FOR SLUMP SALE W HICH GAVE RISE TO CAPITAL GAIN WAS APPARENT FROM THE RETURN O F INCOME FURNISHED BY THE ASSESSEE. A COPY OF THE AGREEMENT WITH NLDL WAS MADE AVAILABLE TO THE ASSESSING OFFICER IN COURSE OF ASSESSMENT PROCEEDING. AT NO POINT OF TIME ANY AT TEMPT WAS MADE TO WITHHOLD INFORMATION FOR COMPUTATION OF INC OME. 14. IT WAS SUBMITTED THAT WHEN THE LTCG WAS DISCLO SED IN THE RETURN ALTHOUGH ITS COMPUTATION WAS DONE DIFFERENT LY AS PERCEIVED BY THE ASSESSEE AS CORRECT BASING ON THE STIPULATIO NS IN THE AGREEMENT THERE COULD BE NO ALLEGATION OF CONCEALM ENT. IT WAS CONTENDED THAT NO PRUDENT ASSESSEE COULD KEEP OFF O R HIDE OTHER RELATED INFORMATION FROM THE ASSESSING OFFICER WHIC H GAVE RISE TO LTCG. IT WAS THEREFORE SUBMITTED BY THE ASSESSEE THAT THE ALLEGATION OF THE ASSESSING OFFICER THAT THE ASSESS EE FAILED TO EXPLAIN THE REASONS FOR NON INCLUSION OF RS.40 LAKH S AS FULL VALUE OF CONSIDERATION IS NOT CORRECT. 15. IT WAS CONTENDED THAT THERE WAS INDICATION IN THE RETURN OF INCOME BY WAY OF FOOTNOTE THAT DURING THE PREVIOUS YEAR NLDL HAS PURCHASED THE ASSESSEE FIRM AND PAID A CONSIDERATIO N OF RS.1 10 00 000/- WHICH WAS ADOPTED AS FULL VALUE OF CONSIDERATION FOR COMPUTATION OF CAPITAL GAIN. THERE WAS THUS NO NON DISCLOSURE OF FACTS. 16. AS REGARDS NON INCLUSION OF RS.40 LAKHS IT W AS EXPLAINED THAT DURING THE YEAR THE ASSESSEE RECEIVED ONLY RS .1 10 00 000/- FROM NLDL. IT WAS ALSO EXPLAINED THAT THE RECEIPT OF THE BALANCE ITA NO.1011/HYD/2010 M/S PARK LANE MEDICAL DIAGNOSTIC SBAD. 6 AMOUNT WAS LINKED WITH ACHIEVEMENT OF 33 LAKHS OF O PERATING PROFIT IN THE FIRST COMMERCIAL YEAR AND RS.40 LAKHS IN THE SECOND COMMERCIAL YEAR AS PER STIPULATION IN THE AGREEMENT . IN OTHER WORDS THE ASSESSEE TRIED TO DRIVE HOME THE POINT T HAT THE PROMISE TO PAY WAS A CONDITIONAL ONE AND THE SAME WAS NOT U NQUALIFIED PROMISE SO AS TO TREAT THE ENTIRE AMOUNT AS FULL VA LUE OF CONSIDERATION AS ACCRUED OR RECEIVED AS PER THE AGR EEMENT. THEREFORE IT CANNOT BE SAID THAT FULL VALUE OF CON SIDERATION FRUCTIFIED DURING THE YEAR FOR BEING INCLUDED FOR C OMPUTATION OF LTCG ARISING OUT OF THE TRANSACTION. 17. THE METHOD OF ACCOUNTING OF THE FULL VALUE OF CONSIDERATION WAS EXPLAINED TO THE ASSESSING OFFICER IN THE COURS E OF ASSESSMENT PROCEEDING. IT WAS EXPLAINED THAT ACCRUAL SYSTEM D OES NOT MEAN THAT IN ALL CASES AND IN ALL CIRCUMSTANCES THE INCO ME WOULD ACCRUE TO THE ASSESSEE TILL THE ASSESSEE GETS A VESTED RIG HT TO RECEIVE THE INCOME. IT WAS SUBMITTED THAT BECAUSE OF THE CONDI TIONS ATTACHED TO RECEIVE THE BALANCE SALE CONSIDERATION OF RS.40 LAKHS WHICH WAS NOT RECEIVED DURING THE YEAR THE SAME WAS NOT TAKE N INTO ACCOUNT IN THE RETURN FOR ASSESSMENT YEAR 2006-07 FOR THE P URPOSE OF COMPUTATION OF LTCG. IT WAS SUBMITTED IN COURSE OF HEARING THAT THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT THE FUL L VALUE OF CONSIDERATION SHOULD BE LIMITED TO WHAT WAS ACTUALL Y RECEIVED DURING THE YEAR FOR COMPUTATION OF LTCG IN THE FACT S AND CIRCUMSTANCES OF THE CASE. IT WAS SUBMITTED THAT T HESE FACTS ARE NOT FULLY APPRECIATED BY THE ASSESSING OFFICER IN T HE CORRECT PERSPECTIVE WHILE IMPOSING PENALTY. 18. AS REGARDS EXCESS DEDUCTION ON ACCOUNT OF CAPI TAL BALANCE FROM FULL VALUE CONSIDERATION FOR WORKING OUT LTCG ASSESSING OFFICER OBSERVED THAT THE ASSESSEE SHOULD HAVE CLAI MED DEDUCTION ITA NO.1011/HYD/2010 M/S PARK LANE MEDICAL DIAGNOSTIC SBAD. 7 OF RS.30 36 190/- BEING THE CAPITAL BALANCE AS ON 1 .7.05 WHICH WAS DATE .OF SALE BUT NOT RS.41 16 191/- AFTER TAKI NG INTO ACCOUNT THE FRESH INTRODUCTION OF CAPITAL OF RS.10 80 000/- INTRODUCED ON 13.12.2005 BY THE TWO PARTNERS FOR THE PURPOSE OF W ORKING OUT LTCG. THEREFORE THE AMOUNT OF RS.10 80 000 WAS DI SALLOWED WHICH HAD THE EFFECT OF ENHANCING THE LYCG. IN THI S REGARD THE ASSESSEE SUBMITTED THE FOLLOWING FACTS: A) THERE WAS NO SUPPRESSION OF ANY MATERIAL PARTICU LARS. THE COMPUTATION OF CAPITAL GAIN WAS FILED ALONG WITH CA PITAL ACCOUNT. B) THE ASSESSEE WAS UNDER THE BONA FIDE BELIEF THAT THE CAPITAL BALANCE AS AT THE END OF THE YEAR WOULD BE DEDUCTED FOR ARRIVING AT THE CAPITAL GAIN. SINCE THE CAPITA L BALANCE WAS RS.41 16 191/- THE SAME WAS DEDUCTED. 19. ON BOTH THE CCOUNTS VIZ. RECEIPT OF FULL VALU E OF CONSIDERATION AND DEDUCTION OF CAPITAL BALANCE THE RE WAS FULL DISCLOSURE OF MATERIAL PARTICULARS RELEVANT FOR COM PUTATION OF INCOME ALTHOUGH THE SAME RECEIVED A DIFFERENT INTE RPRETATION IN THE HANDS OF THE ASSESSING OFFICER RESULTING IN ENHANCE D COMPUTATION OF LTCG. ALL THESE CLAIMS HAVING BEEN MADE UNDER A BONA FIDE BELIEF THAT THESE ARE PERMISSIBLE NO MOTIVE COULD BE ATTRIBUTED TO THE ASSESSEE TO CONCEAL INCOME. 19.1. AS REGARDS THE LEGAL ISSUES IN THE WRITTEN SUBMISSIONS THE EMPHASIS WAS PLACED BY RELYING ON THE DECISION IN T HE CASE OF SHOORJI VALLABHDAS & CO. ( 46 ITR 144(SC). IT WAS FURTHER CONTENDED THAT THE CASE OF THE ASSESSEE CANNOT BE E QUATED WITH A CASE WHERE THE ASSESSEE TRIED TO WITHHOLD ANY INFOR MATION TO EVADE TAX. IT WAS POINTED OUT THAT IN SUCH CIRCUMSTANCES AN AGREED OFFER COULD NOT TANTAMOUNT TO CONCEALMENT OF INCOME OR FU RNISHING ITA NO.1011/HYD/2010 M/S PARK LANE MEDICAL DIAGNOSTIC SBAD. 8 INACCURATE PARTICULARS OF THE INCOME. THE ASSESSIN G OFFICER PLACED RELIANCE ON THE DECISION OF DELHI HIGH COURT IN THE CASE OF TUBE FABRIC INDIA LTD. (210 ITR 1035) WAS DISTINGUISHED BY THE LEARNED AUTHORIZED REPRESENTATIVE. SIMILARLY THE ASSESSIN G OFFICER RELIED ON THE DECISION OF THE APEX COURT IN THE CASE OF DU RGA TIMBER WORKS (79 ITR 63) WAS DISTINGUISHED BY CONTENDING T HAT ASSESSEES CASE IS NOT A CASE OF ANY ATTEMPT TO EVA DE TAX WHEN ALL THE PARTICULARS WERE EITHER AVAILABLE IN THE BOOKS RETURN OF INCOME FURNISHED IN COURSE OF ASSESSMENT. AND AT BEST IT C AN BE A CASE OF COMPUTATIONAL ERROR UNDER BONA FIDE BELIEF. SIMILA RLY THE RATIO OF THE DECISION IN THE CASE OF CIT VS. KRISHNA AND CO. (120 ITR 144) (MDS.) WESTERN TEXTILES VS. (112 ITR 229) (BOM.) CIT VS. POPULAR LUNGHI CO. (238 ITR 229) (MDS.) THE LEARNED AUTHOR IZED REPRESENTATIVE MADE ELABORATE SUBMISSIONS BEFORE TH E CIT(A) AND BROUGHT OUT THE FACT THAT THOSE CASE RELIED BY THE ASSESSING OFFICER ARE NOT APPLICABLE IN THE PRESENT CASE OF THE ASSES SEE. 20. IN THE WRITTEN SUBMISSIONS THE OTHER CASES RE LIED BY THE ASSESSING OFFICER ARE DARMENDRA TEXTILES PROCESSORS (306 ITR 277) (SC) KANBAY SOFTWARE VS. DCIT (122 TTJ 721) (PUNE ) WAS COUNTED BY THE LEARNED AUTHORIZED REPRESENTATIVE BY RELYING ON THE CASE OF ACIT VS. VIP INDUSTRIES (MUM) GACL FINANCE LTD. (3 0 SOT 360) AND GEM GRANITES (KARNATAKA) VS. DY.CIT (120 TTJ 992) (CHENNAI). IT WAS CONTENDED THAT THERE IS TOTAL AB SENCE OF ANY ATTEMPT BY THE ASSESSEE TO HIDE OR TWIST THE FACTS TO CONCEAL INCOME AND THERE WAS ALWAYS A BONA FIDE BELIEF THAT THE CO MPUTATION OF CAPITAL GAIN WAS CORRECT. 21. THE LEARNED AUTHORIZED REPRESENTATIVE POINTED OUT THAT LAW WELL ESTABLISHED AS PRINCIPLE THAT PENALTY PROCEEDI NGS AND ASSESSMENT PROCEEDINGS ARE DIFFERENT. ITA NO.1011/HYD/2010 M/S PARK LANE MEDICAL DIAGNOSTIC SBAD. 9 22. THE LEARNED AUTHORIZED REPRESENTATIVE FURTHER RELIED ON THE DECISIONS IN THE CASE OF JAIN BROTHERS VS. UOI (42 ITR 216) (SC) CIT VS. DHARMACHAND L. SAHA (204 ITR 462) (BOMBAY) AND CIT VS. ABDUL BAKSI & BROTHERS (160 ITR 94) (AP FB). THE LEARNED AUTHORIZED REPRESENTATIVE FURTHER POINTED OUT ON TH E DECISION IN THE CASE OF CIT VS. RATHNASWAMY CJ (223 ITR 5) (MD S.) IS IN SUPPORT OF HIS SUBMISSION THAT THE ASSESSING OFFICE R HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CHARACTERISE THE INCOME AS CONCEALED INCOME BY ANY POSITIVE EVIDENCE AND THERE FORE NO PENALTY IS IMPOSABLE. THE AR ALSO SUBMITTED THAT THE ASSES SEE DOES NOT FALL WITHIN THE SCOPE OF EXPLANATION-1 FOR THE PURP OSE OF IMPOSITION OF PENALTY. THE AR POINTED OUT THAT THERE WAS NO C ONTUMACIOUS CONDUCT THAT THE ASSESSEE ACTED IN DEFIANCE OF LAW ON THAT HE RELIED IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF OR ISSA (83 ITR 26) (SC). 23. THE CIT(A) VIDE PARA 8 .C OF THE APPELLATE ORD ER DATED 12.4.2010 HELD AS FOLLOWS: THE CASE LAWS RELIED UPON BY THE ASSESSING OFFICER DO NOT SUPPORT HIS CASE FOR IMPOSITION OF PENALTY. THE AS SESSING OFFICERS RELIANCE ON THE DECISION IN THE CASE OF D HARMENDRA TEXTILES PROCESSORS (SUPRA) DOES NOT ADVANCE THE CA SE FOR IMPOSITION OF PENALTY. IN A RECENT CASE CIT VS. RE LIANCE PETRO PRODUCTS LTD. (322 ITR 158 SC) THE HONBLE SC HAD OCCASION TO CONSIDER THE IMPORT OF THE JUDGEMENT IN THE CASE OF DHARMENDRA TEXTILES PROCESSORS. IT WAS OBSERVED TH AT A MERE MAKING OF A CLAIM BY ITSELF WILL NOT AMOUNT TO FU RNISHING INACCURATE PARTICULARS OF INCOME REGARDING THE INCO ME OF THE ASSESSEE. SUCH A CLAIM IN THE RETURN CANNOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS. IT WAS OBSER VED THAT IF NON ACCEPTANCE OF A MERE CLAIM IN THE RETURN WOULD AUTOMATICALLY LEAD TO PENALTY THEN IN CASE OF EVER Y RETURN ITA NO.1011/HYD/2010 M/S PARK LANE MEDICAL DIAGNOSTIC SBAD. 10 WHERE CLAIM IS REJECTED THE SAME WOULD BE VISITED BY PENALTY. SUCH A PROPOSITION WAS HELD TO BE TOO WIDE AND NOT THE INTENTION OF THE LEGISLATURE. THE CASE OF THE ASSE SSEE SQUARELY FITS INTO THE RATIO OF THIS DECISION. IN ANOTHER R ECENT ORDER DATED 9.10.2009 THE JURISDICTIONAL ITAT IN THE CAS E OF CS CHOWDHURY V ITO WARD 7(2) HYDERABAD IN ITA NO.1367/HYD/2008 CAME TO A FINDING THAT UNLESS THE OMISSION WAS DELIBERATE OR WITH AN INTENTION TO HID E INCOME SO AS TO AVOID IMPOSITION OF TAX PENALTY CANNOT BE LE VIED. WHILE OBSERVING THUS THE TRIBUNAL ALSO KEPT IN VIEW THE IMPORT OF JUDGEMENT IN DHARMENDRA TEXTILES CASE. THE TRIBUNA L FOLLOWED THE RECENT DECISION OF THE APEX COURT IN T HE CASE OF UOI RAJENDRA SPINNING AND WEAVING MILLS 224 CTR 1 F OR THE PROPOSITION THAT THE PENALTY IS NOT AUTOMATIC IN EV ERY CASE. 24. AGGRIEVED THE DEPARTMENT IS IN APPEAL BEFOR E US. HE THE CIT(A) HELD THAT THE ASSESSEE IS NOT LIABLE FOR PEN ALTY U/S.271(1)(C) OF THE ACT. 25. AGGRIEVED THE DEPARTMENT IS AN APPEAL BEFORE U S 24. WE HAVE HEARD BOTH THE PARTIES. WE FIND THAT TH E COMPUTATION OF CAPITAL GAINS WAS FILED ALONG WITH T HE CAPITAL ACCOUNT WHILE FILING THE RETURN AND HENCE THERE CA NNOT BE ANY SUPPRESSION OF MATERIAL PARTICULARS FOR THE LEVY OF PENALTY UNDER SECTION 271(1)(C). FURTHER THE ASSESSEE WAS UNDE R BONAFIDE BELIEF THAT THE CAPITAL BALANCE AS AT THE END OF THE YEAR WOULD BE DEDUCTED FOR ARRIVING AT THE CAPITAL GAIN. SINCE T HE CAPITAL BALANCE WAS RS.41 16 191/- THE SAME WAS DEDUCTED. THEREFORE ON BOTH COUNTS VIZ. RECEIPT OF FULL VALUE OF CONSIDERATION AND DEDUCTION OF CAPITAL BALANCE THERE WAS FULL DISCLOSURE OF MATER IAL PARTICULARS RELEVANT FOR COMPUTATION OF INCOME ALTHOUGH THE SA ME RECEIVED A DIFFERENT INTERPRETATION IN THE HANDS OF THE ASSESS ING OFFICER RESULTING IN ENHANCED COMPUTATION OF LTGG. THE SUP REME COURT ITA NO.1011/HYD/2010 M/S PARK LANE MEDICAL DIAGNOSTIC SBAD. 11 IN THE CASE OF CIT VS RELIANCE PETROPRODUCTS LIMITE D (322 ITR 158) HAS HELD AS FOLLOWS:- (I) S. 271 (1) (C) APPLIES WHERE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME. THE PRESENT WAS NOT A CASE OF CONCEAL MENT OF THE INCOME. AS REGARDS THE FURNISHING OF INACCURATE PARTICULARS NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. THE WORDS INACCURATE PARTICULARS MEAN THAT THE DETAILS SUPPLIED IN THE RETURN ARE NOT ACCURATE NOT EXACT OR CORRECT NOT ACCORDING TO TRUTH OR ERRONEOUS . IN THE ABSENCE OF A FINDING BY THE AO THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR F ALSE THERE WOULD BE NO QUESTION OF INVITING PENALTY U/S 271(1) (C). (II) THE ARGUMENT OF THE REVENUE THAT SUBMITTING AN INCORRECT CLAIM FOR EXPENDITURE WOULD AMOUNT TO GIVING INACCU RATE PARTICULARS OF SUCH INCOME IS NOT CORRECT. BY NO STRETCH OF IMAGINATION CAN THE MAKING OF AN INCORRECT CLAIM IN LAW TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. A MERE MAKING OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LA W BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE . IF THE CONTENTION OF THE REVENUE IS ACCEPTED THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY THE AO FOR ANY REASON THE ASSESSEE WILL INVITE PENALTY U/S 27 1(1)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATU RE. 26. RESPECTFULLY FOLLOWING THE RATIO OF THE DECISI ON OF THE APEX COURT WE DELETE THE PENALTY LEVIED UNDER SECTION 27 1(1)(C) OF THE INCOME TAX ACT 1961. 27. IN THE RESULT THE REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 14.12.2011 SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 14 TH DECEMBER 2011 ITA NO.1011/HYD/2010 M/S PARK LANE MEDICAL DIAGNOSTIC SBAD. 12 COPY FORWARDED TO: 1. M/S PARKLANE MEDICAL DIAGNOSTIC CELLAR BHUVANA TO WERS BELOW CMR SHOW ROOM SECUNDERABAD 2. THE ACIT CIRCLE 10(1) HYDERABAD 3. THE CIT(A)-VI HYDERABAD 4. THE4 CIT HYDERABAD 5. THE DR ITAT HYDERABAD NP/