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Issues involved: Appeal against levy of penalty u/s. 271(1)(c) of the Act for inaccurate particulars of income for A.Y. 2002-03.
Summary: The Appellate Tribunal ITAT Mumbai heard an appeal against the order of the CIT(A)-2, Mumbai, regarding the levy of a penalty u/s. 271(1)(c) of the Act. The case involved the assessee declaring a total loss in the return of income, but later showing the sale of bonus shares of Hotel Rugby Ltd. The AO believed the cost of acquisition of bonus shares should be zero, leading to the entire sale proceeds being taxed as capital gains. The penalty proceedings were initiated for filing inaccurate particulars of income, resulting in a penalty of &8377; 2,48,705/-. Upon review, the Tribunal found that the revised computation of income had been accepted during assessment proceedings, and the assessee had substantial brought forward long term capital losses. It was noted that the assessee's mistake in taking the cost of bonus shares as zero while computing capital gains could have been inadvertent, as there was no benefit to the assessee in claiming a loss instead of showing capital gains. The Tribunal concluded that the mistake was bona fide, with no loss to the revenue, and directed the AO to delete the penalty. The Tribunal considered the peculiar facts of the case and the absence of revenue loss in deciding to allow the appeal and delete the penalty. The decision was made based on the specific circumstances of the case, rendering the discussion of judicial decisions unnecessary. In conclusion, the appeal by the assessee was allowed, and the penalty of &8377; 2,48,705/- u/s. 271(1)(c) of the Act was directed to be deleted.
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