CHANDRA PAL BAGGA Vs. INCOME TAX APPELLATE TRIBUNAL

JUDGEMENT

(1.) THE appeal was admitted in terms of the following question :

(2.) THE relevant assessment year is 1992-93. THE assessee appellant is an individual and is carrying on the business, of transport. In the preceding year, the assessee was a partner in M/s Gautam Roadways but became proprietor from the asst. yr. 1991-92. He filed the return on 21st Sept., 1992. THE appellant has sold his immovable property on 26th April, 1991, for Rs. 5 lacs and purchased two flats, one on 6th May, 1991, and another on 29th May, 1991, for total sum of Rs. 5,56,000. THE capital gain comes to Rs. 1,40,000. In the original return, the assessee claimed that as he has purchased the immovable property against the consideration received on sale of house property on 26th April, 1991, therefore, no capital gain tax is attracted. THEreafter, he filed the revised return claiming that the capital gain tax is not payable as it is long-term capital gain and assessee has purchased the property within 6 months, against the consideration received on sale of his house property on 26th April, 1991. THE AO did not accept this explanation and taxed this amount i.e. difference of Rs. 1,40,000 as short-term capital gain. No appeal has been preferred. THErefore, that addition has become final. THEreafter, the AO has initiated the penalty proceedings under s. 271(1)(c) of the IT Act, 1961, and levied the penalty of Rs. 1,04,110. In appeal before the CIT(A), the penalty amount has been reduced to Rs. 63,974 and in appeal before the Tribunal, the Tribunal has reduced the penalty amount to Rs. 53,312 vide order dt. 23rd Nov., 2000.

(3.) HE further submits that assessee has though brought to the notice of the Department that there was a transaction and assessee has sold the immovable property on 26th April, 1991, but on the advise of the advocate Mr. M.C. Ranka, the assessee has claimed that capital gain is not liable to tax. Mr. J.K. Ranka has brought to our notice the affidavit given on oath by Mr. M.C. Ranka that in fact by his mistake the assessee has shown 'long-term capital gain' and claimed exemption, but the transaction has been disclosed in the return. That was his mistake and not the mistake of the assessee. The relevant portion in para 3 of the affidavit reads as under :