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TMI Blog2014 (7) TMI 799X X X X Extracts X X X X X X X X Extracts X X X X ..... me and in the absence of the fact that the claim of assessee was not bonafide the Tribunal deleted the penalty imposed under section 271(1)(c) of the Act and there is no reason to interfere with the order of the Tribunal - rejection of capital gain/loss in the case of the assessee does not warrant levy of penalty is set aside – Decide in favour of Assessee. - ITA No. 1585/Mum/2013 - - - Dated:- 10-7-2014 - Shri Vijay Pal Rao And Shri D. Karunakara Rao,JJ. For the Petitioner : Shri Nitesh Joshi For the Respondent : Shri Sunil K. Agarwal ORDER Per Vijay Pal Rao, Judicial Member: This appeal by the assessee is directed against the order dated 30/11/2012 of CIT(A) arising from penalty order passed under section 271(1)(c) of the Income tax Act for the assessment year 2006-07. The assessee has raised the following grounds :- 1. The ld. CIT(A) erred in partly upholding the action of the ld. Dy. Commissioner of Income tax (hereinafter referred to as Assessing Officer ) levying penalty u/s. 271(1)(c) of the Income tax Act, 1961 (the Act). 2. The appellant submits that it had filed full, true, correct and complete particulars of its income and has neithe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n subsequent year. Therefore, through sale transaction the entire property purchased by assessee was sold during the year under consideration. This is not a regular business activity of assessee, and further, since the year 2002 the assessee has been showing these properties as fixed assets in the balance sheet till these are sold in the year under consideration. Therefore, it is a case of change of head of income by the AO on which penalty can be levied as there was no concealment of income or furnishing of incorrect particulars of income. In support of his contention he has relied upon the decision of Hon'ble Jurisdictional High Court in the case of CIT vs. Bennett Coleman Co. Ltd. (215 Taxmann 93) and submitted that the Hon'ble High Court has held that there is only a change of head of income and in the absence of the fact that the claim of assessee was not bonafide the Tribunal deleted the penalty imposed under section 271(1)(c) of the Act and there is no reason to interfere with the order of the Tribunal . He has relied upon the order of this Tribunal dated 11/1/2012 in case of Sukdham Construction Developers Ltd. vs. DCIT in ITA No.2172/Mum/2011 for assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of capital gain or business income arising from sale and purchase of the immovable property is a debatable issue. Though the claim of the assessee has been rejected and the treatment of business income has been confirmed by this Tribunal however, keeping in view of the fact that it was not a regular activity of the assessee and there is no prior or subsequent instance of purchase and sale of property by the assessee the rejection of claim by taking a different view does not ipso facto warrant levy of penalty when there is no finding that the claim of the assessee is a bogus claim or absolutely impossible/inaccurate claim. The assessee has furnished all the relevant particulars regarding purchase as well as sale of property in question. Even the immovable properties were shown as fixed assets in the balance sheet of the assessee right from beginning. Therefore, non-acceptance of the claim would not constitute concealment of particulars of income or furnish inaccurate particulars of income. The assessee let out some of the property after acquisition which shows the assessee s intention was to retain property for a longer period and not to hold simply to resell at the earliest possib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 1,01.85,887/- which was claimed as short term capital gain. The Assessing Officer treated the income from purchase and sale of shares as business income and accordingly shown the total income of the assessee at ₹ 1.02,42,338/-. Thus, it is clear that as far as the quantum of income as declared by the assessee and finally assessed by the Assessing Officer is concerned, there is no change except some minor disallowance of loss on account of speculative loss by the Assessing Officer. Thus the penalty has been levied by the reason of treatment of capital gain declared by the assessee as business income, which clearly shows that as far as the quantum on account of capital gain or expenditure, no mistake was found by the Assessing Officer, but there was a difference of view and opinion as the assessee declared said income as short term capital gain, which was treated by the Assessing Officer as business income. Accordingly, the claim of the assessee treating the income from sale and purchase of shares as capital gain cannot be treated as impossible view or absolutely illegal and incorrect treatment of income. The Tribunal while deciding the issue in quantum appeal has co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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