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Issues involved: Appeal against levy of penalty u/s.271(1)(c) of the Act for assessment year 2007-08.
Summary: The assessee, a Private Limited Company engaged in trading shares and securities, appealed against the penalty of &8377; 41,96,900/- u/s.271(1)(c) imposed by the Assessing Officer (AO) for treating short term capital gain as business income. The AO initiated penalty proceedings based on the discrepancy in income classification, despite the assessee's contention that all details were accurately disclosed in the return. The ld CIT(A) upheld the penalty, leading to the appeal before the Tribunal. During the hearing, the assessee's representative argued that the penalty was unjustified as there was no concealment of facts or inaccurate particulars furnished. Citing relevant case laws, the representative emphasized that the income reported truthfully in the return should not be penalized merely due to a difference in income classification by the AO. After considering the submissions, previous orders, and relevant case laws, the Tribunal concluded that the penalty was unwarranted. The Tribunal agreed that the discrepancy in income classification did not amount to concealment or furnishing inaccurate particulars. Therefore, the penalty of &8377; 41,96,900/- was deleted, and the appeal by the assessee was allowed. In conclusion, the Tribunal ruled in favor of the assessee, emphasizing that the discrepancy in income classification did not constitute grounds for penalty under u/s.271(1)(c) of the Act.
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