Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (5) TMI 76 - ITAT DELHIConfirmation of penalty u/s 271(1)(c) of the Act - Whether the assessee has furnished inaccurate particulars or not - AO was of the view that the assessee had deliberately booked losses on the sale of original units and had valued the bonus units at nil vale which otherwise had the value as the same were sold in the next year - Held that:- The assessees were issued bonus units which they valued at NIL value as they were issued free of cost and assessee had not paid any amount for receipt of the same - there is no dispute about the sale price of original units and loss incurred by the assessee on original units and also it is an undisputed fact that this loss cannot be said to be notional as assessee had actually made the sale of original units - to this extent, there does not seem to be a case of furnishing of inaccurate particulars - as far as value of bonus units is concerned, sub section (iiia) of clause (2) of sub section 55 permits the assessee to value such bonus units at NIL value - there was no loss to revenue or to assessee as claim denied during the present year has resulted into gain to assessee in succeeding year as assessee was able to adjust cost of such bonus units against sale of such units – here inaccurate particulars of income were not furnished. The provisions of section 94(8) were inserted in the statute to curb tax avoidance in such type of circumstances only which were applicable from assessment year 2005-06, the fact CIT(A) has noted in his order also - The present cases relate to assessment year 2004-05 and therefore in these years the assessee had not violated the provisions of section 94(8) and therefore had valued the bonus units as per provisions of section 55(2)(iiia) which is an accepted method though for different purposes - The AO had charged the assessee with the violation of provisions of section 94(7) which is not the fact as section 94(7) relates to the cases where an assessee earns dividend or income on such securities - the other charge of AO is that assessee had shown income from other sources as agricultural income is also not correct as CIT(A) in quantum proceedings had accepted the claim of assessee – thus, the assessee had valued the bonus units at nil value by taking one of the possible views and various courts has held that penalty under these circumstances is not leviable – Relying upon CIT v. Reliance Petroproducts Ltd. [2010 (3) TMI 80 - SUPREME COURT] - mere making a claim which is not substantiate in law by itself will not amount to furnishing of inaccurate particulars – thus, the penalties for concealment of income u/s 271(1)( c) is not imposable – Decided in favour of Assessee.
|