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2017 (11) TMI 801 - AT - Income TaxPenalty u/s 271(1)(c) - change of head of income from short-term capital gains to business income - Held that - In the appeals before us, it is undisputed that the impugned amounts, which formed the basis for the AO to levy penalty, were in fact fully reported in the returns. The fact that the AO chose to treat the income under some other head cannot characterise the particulars reported in the return as inaccurate particulars or as suppression of facts. Respectfully applying the ratio of the decisions in the case of Reliance Petroproducts Private Limited (2010 (3) TMI 80 - SUPREME COURT) and CIT versus Amit Jain (2013 (1) TMI 340 - DELHI HIGH COURT ), we find no reason to interfere with the adjudication of the Ld. CIT (Appeals) in deleting the impugned penalties in all the four years under consideration. - Decided against revenue
Issues:
- Challenge to deletion of penalty under section 271 (1) (c) of the Income Tax Act, 1961 by the Ld. CIT (Appeals) for assessment years 2005-06, 2006-07, 2007-08, and 2008-09. Analysis: Issue 1: Assessment Year 2005-06 - Facts: AO treated short-term capital gains as business income, resulting in a penalty under section 271 (1) (c). - Decision: Ld. CIT (Appeals) deleted the penalty, Department challenged. - Arguments: Department claimed penalty justified; Ld. Authorised Representative argued no concealment or inaccurate particulars. - Ruling: ITAT held change in income head not concealment; relied on relevant judgments to support deletion of penalty. Issue 2: Assessment Year 2006-07 - Facts: Dispute over treatment of short-term capital gains as business income. - Decision: Penalty imposed by AO deleted by Ld. CIT (Appeals), challenged by Department. - Arguments: Department emphasized penalty validity; Authorised Representative cited disclosure of all facts. - Ruling: ITAT upheld deletion of penalty, citing precedents and lack of inaccurate particulars. Issue 3: Assessment Year 2007-08 - Facts: Income declared as short-term capital gains, treated as business income by AO. - Decision: Penalty under section 271(1)(c) deleted by Ld. CIT (Appeals), Department appealed. - Arguments: Department argued for penalty imposition; Authorised Representative stressed disclosure of all relevant details. - Ruling: ITAT upheld deletion of penalty, emphasizing accurate reporting of income details. Issue 4: Assessment Year 2008-09 - Facts: Dispute over short-term capital gains treated as business income by AO. - Decision: Penalty deleted by Ld. CIT (Appeals), challenged by Department. - Arguments: Department claimed penalty warranted; Authorised Representative highlighted disclosure of transaction details. - Ruling: ITAT upheld deletion of penalty, citing accurate reporting and lack of concealment. Conclusion: - ITAT dismissed all four appeals by the Department, upholding the deletion of penalties by Ld. CIT (Appeals) for assessment years 2005-06, 2006-07, 2007-08, and 2008-09. The decisions were based on the accurate disclosure of income details despite the disagreement on the treatment of short-term capital gains as business income. The judgments emphasized the distinction between assessment and penalty proceedings, highlighting the need for accurate reporting rather than the sustainability of the claim. The rulings were supported by relevant legal precedents, affirming the deletion of penalties.
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