COMMISSIONER OF INCOME TAX Vs. SUDHIRKUMAR CHOTTUBHAI

JUDGEMENT

(1.) THE Department has come in appeal against the decision of the Tribunal ordering deletion of the penalty under S.271(1)(c) of the IT Act, 1961.

(2.) THE facts of the case are as follows : The assessee was a partner in the firm, VIP EnterpriseS.He retired from the firm as it was incurring heavy losseS.The firm was carrying on business of distributing filmS.On his retirement, all the assets were valued including unexpired rights of distribution of filmS.At the time of retirement, the assessee got distribution rights of two films for 20 yearS.This was in lieu of his retirement from the firm. The assessee has no organisation for distribution of filmS.He, therefore, received cash amount from the firm in lieu of his retirement. The AO directed the assessee to revise the returns filed by him on the ground that the amount received from the firm in lieu of his rights constituted income. On the above facts, the AO imposed a penalty on the ground that the revised returns came to be filed after the Department detected the amount. This was challenged ultimately before the Tribunal. The Tribunal found that no case for concealment has been made out by the Department. Firstly, the Tribunal found that it was not clear from the order passed by the AO as to whether the amount received by the assessee is lieu of his rights for surrendering the films for distribution in the firm has to be taxed as business profits or under the head "Capital gains". Secondly, the Tribunal found that the assessee, under the above circumstances, was under a bona fide belief that the amount was not taxable when he filed the original returns and that the revised returns were filed by the assessee when he was persuaded by the AO. Hence, on the facts, the Tribunal came to the conclusion that no case for concealment has been made out. In the circumstances, no case for interference is made out. No substantial question of law ariseS.This appeal is dismissed accordingly.