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TMI Blog2013 (9) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... al gain to the extent of Rs.75,20,351/- had arisen from shares sold by the assessee on 07-09-2004. He also noted that as per the provisions of section 10(38), the profit arising from the share transactions made only after 1st Oct., 2004 was eligible for exemption from tax if Securities Transaction Tax (STT) was paid thereon. Since the long term capital gain to the extent of Rs.75,20,351/- had arisen to the assessee from sale of shares made on 07-09-2004 and no STT was also paid on the said transaction, the AO held that the assessee was not entitled to claim exemption u/s 10(38). Accordingly, long term capital gain of Rs.75,20,351/- was brought to tax by the AO in the hands of the assessee in the assessment completed u/s 143(3) vide an order dated 26-12-2007. He also initiated penalty proceedings u/s 271(1)(c) in respect of the said addition made on long term capital gain as well as in respect of other addition of Rs.50 lakhs made on account of unsecured loan u/s 68 treating the same as unexplained cash credit. Meanwhile, both these additions were confirmed by the learned CIT(Appeals) vide his appellate order dated 07-08-2008 while disposing of the appeal filed by the assessee in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts of the case, arguments of the Assessisng Officer and the written submissions of the Authorised Representative of the appellant. As per Explanation 1 to section 271(1)(c) if an addition is made to the total income of a person because of the fact that such person failed to offer an explanation with regard to any facts material to the computation of his total income or offered an explanation which is found by the Assessing Officer to be false then the amount so added shall be deemed to be the income in respect of which particulars have been concealed. This will also be applicable if such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bonafide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him. It means that the appellant is under obligation to offer bonafide explanation. In a land mark decision Hon'ble Supreme Court in the case of Union of India Vs. Dharmendra Textile Processors (2007) 166 Taxman 65 (SC) has even held that willful concealment is not an essential ingredient of penalty. If the explanation offered by the appellant is not bonafide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully and truly given by the assessee and it is thus not a fit case to impose penalty u/s 271(1)(c). He also contended that the series of mistake committed by the assessee in the computation of long term capital gains shows the bonafides of the assessee which is further supported by the fact that the said mistakes were accepted by the assessee in the letter dated 11th November, 2007 filed before the AO. He contended that the claim for exemption u/s 10(38) in respect of long term capital gain thus was inadvertently made by the assessee as a result of genuine and bonafide mistake and the disallowance of such claim cannot be treated as concealment to impose penalty u/s 271(1)(c). In support of this contention, he relied on the decision of Hon'ble Punjab & Haryana High Court in the case of CIT vs. Sidhartha Enterprises 322 ITR 80, the decision of Hon'ble Supreme Court in the case of Price water house coopers (P) Ltd. vs. CIT 253 CTR 1 and the decision of coordinate bench of this Tribunal dated 28th Sept., 2012 passed in the case of Asia Attractive Dividend Stock Fund in ITA No. 3908/Mum/2012. 5. The learned DR, on the other hand, strongly relied on the orders of the authorities below ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. As already noted by us, the provisions of section 10(38) in this regard are very plain and simple and since none of the two conditions stipulated therein was satisfied in the case of the assessee, it is difficult to accept the contention raised on behalf of the assessee that exemption under the said provision was wrongly claimed as a result of genuine and bonafide mistake. It is also observed that the entire long term capital gain earned by the assessee during the year under consideration was claimed to be exempt u/s 54D in the return of income and even the particulars relating to payment of Securities Transaction Tax, which were relevant to the assessee's claim for exemption u/s 10(38), had not been furnished by the assessee. 8. In support of the assessee's case, the learned counsel for the assessee has relied on certain judicial pronouncements. A perusal of the decisions cited by the learned counsel for the assessee, however, shows that the same are distinguishable on facts. In the case of Sidhartha Enterprises 322 ITR 80 (P&H) cited by the learned counsel for the assessee, the assessee had suffered a loss on sale of machinery which was duly disclosed in the statement of acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty imposed u/s 271(1)(c) was held to be unsustainable by the Tribunal. In the present case, the assessee had initially claimed exemption in respect of entire long term capital gain u/s 54D of the Act and in the letter dated 11th November, 2007 filed at the fag end of the assessment proceedings, the assessee stated that the said exemption was wrongly claimed u/s 54D instead of u/s 10(38) due to clerical mistake. The AO, however, found that even the claim made by the assessee for exemption u/s 10(38) was wrong and when he disallowed the same, the assessee challenged the said disallowance unsuccessfully in the appeal filed before the learned CIT(Appeals). The facts involved in the case of the assessee thus are entirely different from the facts involved in the case of Asia Attractive Dividend Stock Fund (supra) relied upon by the learned counsel for the assessee. 10. Similarly the facts involved in the case of Pricewaterhousecoopers (P) Ltd. (supra) cited by the learned counsel for the assessee are found to be different from the facts of the assessee's case inasmuch as the basis on which the computation error made in its return of income was explained by the assessee by way of an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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