S.H.R. TRADING PVT. LTD. Vs. DCIT

JUDGEMENT

(1.) CHALLENGING the order dt. 16.01.2013 of the CIT(A) -20, Mumbai, assessee -company has raised following Grounds of Appeal:

(2.) Assessee -company, engaged in the business of letting out of immovable property filed its return of income on 26.08.2009 declaring income of Rs. 82,17,407/ -. The assessment was completed u/s. 143(3) of the Act by the AO (AO) on 25.10.2011 determining the income of the assessee at 2,02,43,923/. During the Assessment proceedings he found that the assessee had sold immovable property; being Unit No. II admeasuring 1422 sq. ft and one stilt car park No. 75; in Raheja Centre Premise Co -operative Society Limited, Mumbai, the resultant long term capital gain (LTCG) arising out of the said sale was quantified at Rs. 1,21,82,871 against which it claimed exemption u/s. 54 of the entire LTCG having invested 2,63,17,760/ - in acquiring new residential properties. He held that the assessee, being a company, was not entitled to claim deduction u/s. 54/54F of the Act. So, he made rejected the claim made by the assessee. Besides, he also initiated penalty proceedings after issuing a notice, dated, 25.10.2011, u/s. 274 r.w. s. 271(1)(c) of the Act. The assessee was given a further opportunity, vide letter dated 13.04.2012, to explain as to why penalty u/s. 271(1)(c) should not be levied. After considering the reply, dated 23.04.2012, filed by the assessee, AO held that being a company the assessee was not entitled to claim deduction u/s. 54 of the Act, that it had furnished inaccurate particulars and had concealed its income. He levied penalty of Rs. 41,00,754/ -.

(3.) In the appellate proceedings, First appellate Authority (FAA) held that it was not the case where simple disallowance had been made, that it was a case where taxable income had been suppressed by way of patently wrong claim of deduction u/s. 54 knowing well that it was a company not entitled for any such deduction, that in the case of Reliance petro Products Ltd. it was specifically mentioned that everything depended upon return of income, that in the case under consideration the assessee had suppressed the taxable income in the return of income, that the decisions relied upon by the assessee i.e. Atul Mohan Bindal ( : 317 ITR 1) and Reliance petro Products Pvt. Ltd. ( : 322 ITR 158) were not applicable to the facts of the case. He relied upon the cases of Balakrishna Textiles ( : 193 ITR 361), Nagin Chand Shiv Sahai ( : 6 ITR 534), Vidya Sagar Oswal ( : 108 ITR 861), Hoshiarpur Express Transport Co. Ltd. ( : 162 ITR 393), Electrical Agencies Corporation ( : 253 ITR 619), Dharmendra Textile Processors & Others ( : 306 ITR 277), M V. Valliappan ( : 170 ITR 238), K.R. Hoganathan (174 ITR 658), Smt. Nayantara G. Agrawal ( : 207 ITR 639).