Hasmukhlal Ishvarlal Patel vs. Income Tax Officer

Parties Involved

Facts Summary

The assessee filed the original return of income for the assessment year 2020-21 declaring total income of Rs. 18,53,860/-, which was later revised on 07.03.2021 to ₹9,33,340/-. The case was selected for scrutiny due to a substantial decrease in long-term capital gains shown by the assessee in the revised return. The Assessing Officer observed that the assessee had disclosed ₹16,09,971/- as income under the head 'Capital Gains' in the original return, whereas in the revised return, the assessee had reduced the capital gains to ₹6,58,175/- without any explanation. The Assessing Officer treated the differential amount of ₹9,51,796/- as income chargeable under the head 'Long Term Capital Gains' and added it back to the income of the assessee. The assessment was completed on an ex-parte basis under section 144 of the Act at a total income of ₹18,85,140/-. Penalty proceedings under Sections 270A for misreporting of income were separately initiated by the Assessing Officer.…

Legal Issues

• 1. The Ld. CIT(A) erred in confirming the addition of Rs. 9,51,796/- under Long Term Capital Gain (LTCG) without properly considering the circumstances of the case.
• 2. The Ld. CIT(A) has erred in confirming the penalty under section 270A of the Income Tax Act.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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