Assistant Commissioner of Income Tax,Circle-46(1),Circle-New Delhi. Vs. Shri Jaswinder Singh Ahuja,Kailash-II,E-365, Greater Kailash-New Delhi 110 048.
June, 28th 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
`D' : NEW DELHI
DELHI BENCH `D'
G.D.AGRAWAL, VICE PRESIDENT AND
BEFORE SHRI G.D.AGRAWAL,
I.C.SUDHIR, JUDICIAL MEMBER
Nos.3416/Del/2011 & 3417/Del/2011
Years : 2004-
Assessment Years 2002-03
2004-05 & 2002-
Assistant Commissioner of Vs. Shri Jaswinder Singh Ahuja,
Income Tax, Kailash-II,
E-365, Greater Kailash-
Circle- New Delhi 110 048.
New Delhi. PAN : AAAPA2041H.
Appellant by : Shri R.S.Negi, Sr.DR.
Respondent by : None.
D.AGRAWAL, VP :
The only ground raised in these appeals by the Revenue is
against the cancellation of penalty levied under Section 271(1)(c) of
the Income-tax Act, 1961 at `2,50,102/- and `15,69,445/- for AY 2004-
05 and 2002-03 respectively.
2. Since the facts of both the years are identical except variation in
the quantum, we shall discuss herein the facts relating to AY 2004-05.
3. The assessee is an individual who is the Managing Director of
Cadence Design Systems India Pvt.Ltd. For the AY 2004-05, he filed a
return of income at `1,75,05,081/- comprising of salary income at
`1,02,72,400/- from Cadence Design Systems India Pvt.Ltd. and salary
income of `65,97,305/- from Cadence Design System Inc., USA. The
assessee has been granted stock option under an incentive stock
option agreement dated 17th September, 1993 with Cadence Design
Systems, USA. During the year under consideration, the assessee sold
the stock options and received the sum of `11,36,829/- on sale of such
2 ITA Nos.3416 & 3417/D/2011
stock options. The same was declared as long term capital gain. The
Assessing Officer assessed the same as short term capital gain and
also levied penalty under Section 271(1)(c) thereon at `2,50,102/-
being the difference between the tax as short term capital gain and tax
as long term capital gain on the sum of `11,36,829/-. The learned
CIT(A) cancelled the penalty. Hence, the Revenue is in appeal.
4. We have heard both the parties and perused the material placed
before us. From the facts of the case, it is evident that the only
dispute is whether the income from sale of stock options is assessable
as long term capital gain (as disclosed by the assessee) or short term
capital gain (as assessed by the AO). Apparently, there is no
concealment of any fact or furnishing of any incorrect or wrong fact.
Merely because in the opinion of the Assessing Officer the income from
sale of stock option is assessable as short term capital gain and not as
long term capital gain, it would not amount to concealment of income.
In our opinion, on the facts of the assessee's case, the decision of
Hon'ble Apex Court in the case of CIT Vs. Reliance Petroproducts
Pvt.Ltd. 322 ITR 158 (SC) would be squarely applicable wherein their
Lordships held as under:-
"Where there is no finding that any details supplied by the
assessee in its return are found to be incorrect or
erroneous or false there is no question of inviting the
penalty under section 271(1)(c). A mere taking of a claim,
which is not sustainable in law, by itself, will not amount to
furnishing inaccurate particulars regarding the income of
the assessee. Such a claim made in the return cannot
amount to furnishing inaccurate particulars."
5. In the assessee's case, evidently, there is no furnishing of any
inaccurate particulars. It is not the case of the Revenue that the
3 ITA Nos.3416 & 3417/D/2011
assessee has either concealed any fact or has submitted any wrong or
incorrect fact. It is only the question of opinion whether the income
from sale of stock option is assessable as short term capital gain or as
long term capital gain. In view of the above, respectfully following the
above decision of Hon'ble Apex Court in the case of Reliance
Petroproducts Pvt.Ltd., we uphold the order of learned CIT(A).
6. Admittedly, the facts of AY 2002-03 are identical except that the
quantum of penalty is `15,69,445/- and the amount received from the
sale of stock option is `1,05,19,631/-. For the detailed discussion in
para 4 & 5 above, we uphold the order of learned CIT(A) for AY 2002-
7. In the result, the Revenue's appeals are dismissed.
Decision pronounced in the open Court on conclusion of hearing
on 25th June, 2012.
JUDICIAL MEMBER VICE PRESIDENT
Dated : 25.06.2012
Copy forwarded to: -
1. Appellant : Assistant Commissioner of
2. Respondent : Shri Jaswinder Singh Ahuja,
E-365, Greater Kailash-
New Delhi 110 048.
5. DR, ITAT