2015 (7) TMI 358 - AT - Income Tax

Penalty u/s 271(1)(c) - Short term Capital Gain was assessed as business income - Held that - Following the earlier order of this Tribunal as well as the Judgment in the case of CIT Vs. Amit Jain (2013 (1) TMI 340 - DELHI HIGH COURT), we are of the view that the Short term Capital Gain offered by the assessee from sale and purchase of shares treated by the Assessing Officer as business income would not amount to furnishing inaccurate particulars of income or concealment of particulars of income. Accordingly, we delete the penalty levied u/s 271(1)(c). - Decided in favour of assessee.

Summary

Issues:
1. Whether penalty u/s 271(1)(c) of the Income Tax Act for A.Y. 2008-09 was rightly levied on the assessee by treating Short term Capital Gain as business income.

Analysis:
The appeal was against the penalty order passed u/s 271(1)(c) of the Income Tax Act for A.Y. 2008-09. The Assessing Officer treated the gain from sale and purchase of shares as business income instead of Short term Capital Gain offered by the assessee. The main contention was whether this treatment justified the penalty. The assessee argued that there was no concealment or furnishing of inaccurate particulars, as the income remained the same, only the head of income was changed. The Ld. Authorized Representative relied on legal precedents to support this argument.

The Assessing Officer, on the other hand, defended the penalty by stating that the additional amount was correctly assessed as income. The Tribunal noted that the only dispute was the treatment of income, not the facts presented by the assessee. Referring to a similar case, the Tribunal found that the treatment of income as business income instead of capital gain did not justify the penalty. The Tribunal highlighted that even for the subsequent year, the income declared as capital gain was accepted. Citing the decision of the Hon'ble Supreme Court, the Tribunal concluded that the penalty was not justified in this case and deleted the penalty levied by the lower authorities.

The Tribunal emphasized that the facts of this case were identical to a previous case where the penalty was deleted. Further, they referenced a judgment of the Hon'ble Delhi High Court supporting the deletion of the penalty in cases where the income was treated under a different head. Relying on legal precedents and previous Tribunal decisions, the Tribunal held that treating Short term Capital Gain as business income did not amount to furnishing inaccurate particulars of income or concealment. Consequently, the penalty u/s 271(1)(c) was deleted, and the appeal by the assessee was allowed.

In conclusion, the Tribunal found that the treatment of income as business income instead of capital gain did not warrant the levy of penalty u/s 271(1)(c). The decision was based on legal precedents and the principle that a mere difference in the treatment of income heads does not constitute concealment or furnishing inaccurate particulars of income.