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TMI Blog2011 (4) TMI 1440X X X X Extracts X X X X X X X X Extracts X X X X ..... red by the Assessing Officer during the course of assessment proceedings to submit the details of purchase and sale of shares giving rise to the long term capital gain. While furnishing the said details, it was submitted by the assessee vide letter dated 26.12.2008 that a short-term capital gain of ₹ 71,14,710/- arising from the sale of IBL shares had been incorrectly and inadvertently included in the long tem capital gain. It was submitted by the assessee that its claim for exemption under section 10(38) in respect of long term capital gain arising from sale of shares, therefore, may be restricted to 51,95,54,016/- and the amount of ₹ 71,14,710/- claimed as exempt under section 10(38) may be treated as short-term capital gain. The claim of the assessee for exemption u/s.10(38) accordingly was disallowed by the Assessing Office to the extent of ₹ 71,14,710/- in the assessment completed under section 143(3) vide an order dated 26.12.2008. A notice was also issued by him requiring the assessee to show cause as to why penalty u/s.271(1)(c) should not be imposed in respect of the addition made to its total income by way of disallowance of exemption u/s.10(38) to the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ITA could not be levied . The above submission made on behalf of the assessee in reply to the penalty notice issued by him was not found acceptable by the Assessing Officer for the following reasons: 1) The assessee filed its return of income on 30.11.2006 and the assessee was entitled to file revised return stating the omission. 2) It was only after issue of notice asking specific details of capital gains, the assessee acknowledged the mistake and before that during the period from the date of issue notice u/s.143(2) dated 25.12.2008, there was no voluntary admission of mistake in not disclosing the short term capital gain of ₹ 71,14,710/-. 3) The case laws cited by the assessee are not at all relevant in the case of the assessee and the decisions as well were not squarely applicable in the case of the assessee. 4) The case of assessee is squarely covered by the decision of the Supreme Court in the case of Union of India Others v/s. Dharmendra Textiles Processors Others 306 ITR 277. For the reasons given above, the Assessing Officer held that the assessee had furnished inaccurate particulars of its income to the extent of ₹ 71,14,710/- and im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4393), the appellant came to know this mistake and vide letter dated 26.12.2008 has communicated the mistake to the assessing officer. The relevant portion of the letter is as under: In the computation f long term capital gain which are claimed as exempt u/s.10(38) of the I.T.Act a short term capital gain of ₹ 71,14,000/- arising on the sale of IBL shares stood incorrectly and inadvertently included. Resultantly the Long term capital gains which are exempt from tax should be computed at ₹ 51,95,54,016/- and the Short Term capital gain should be taken short term Capital Gain at ₹ 71,14,710/-. The appellant submitted that the period fro filing of a revised return of income had elapsed that is why the appellant immediately communicated to the assessing officer about the inadvertent mistake of misclassification, explaining the circumstances in which the mistake had occurred vide its above referred letter. The assessing officer has imposed a penalty u/s.271(1)(c) in respect of misclassification of short term capital gain arising on sale of shares of Indusind Bank Limited of ₹ 71,14,710/-. According to assessee mistakenly claimed as exempt under the long t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty u/s.271(1)(c) appears to be justified. Therefore, the same is confirmed. In view of the above, the action of the assessing officer levying the penalty u/s.271(1) appears to be justified. Therefore, the same is confirmed. Aggrieved by the order of the learned CIT(A), the assessee has preferred this appeal before the Tribunal. 5. The learned counsel for the assessee submitted that the mistake in claiming the short-term capital gain as long term capital gain exempt u/s.10(38) was realized by the assessee while preparing the details required by the Assessing Officer during the curse of assessment proceedings. He submitted that this mistake was brought to the notice of the Assessing Officer by the assessee company itself and the claim wrongly made for exemption u/s. 10(38) was withdrawn by it voluntarily. He submitted that there was only one instance of short term capital gain and the same was inadvertently included in the amount of long term capital gain due to mis-classification. He contended that the entire amount of profit on sale of investment thus was taken as long term capital gains while claiming exemption u/s.10(38). He invited our attention to the details of long ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income, it is not a case where the assessee can be said to have furnished all the relevant details relating to its claim for long term capita gain fully and truly. He contended that the case of the assessee thus is a fit case to impose penalty u/s.271(1)(c) as there was furnishing of inaccurate particulars of its income by the assessee by making wrong claim for exemption u/s.10(38) of the Act. 7. We have considered the rival submissions and also perused the relevant material on record. It is observed that while claiming exemption u/s.10(38) in respect of long term capital gain, a short term capital gain of ₹ 71,14,710/- was also included by the assessee in the amount of long term capital gain. Although an attempt has been made on behalf of the assessee to submit before the authorities below as well as before us that the said mistake in misclassifying short term capital gain as long term capital gain was attributable to human error inadvertently occurred, there is noting on record to support and substantiate the same. The details furnished by the assessee along with its return of income while making the claim for exemption of long term capital gain are placed at page No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected by the assessee himself while preparing the accounts for the subsequent year and immediately thereafter, the assessee informed about the said mistake to the Assessing Officer voluntarily without there being any enquiry made by the AO. In the case of Mrs. Nagma M. Kanchwala v. ITO (24 DTR 369)(Mum) although wrong calculation of capital gain was found to be made by the assessee by claiming higher indexation of the cost of acquisition, all the relevant particulars and details relating to the said claim were fully and truly furnished by the assessee and it was, therefore, held that concealment penalty could not be imposed u/s.271(1)(c). Similarly, in the case of reliance Petroproducts Pvt. Ltd. (surpa), the assessee was found to have furnished all the relevant particulars relating to the claim truly and fully and it was, therefore, held by the Hon ble Supreme Court that merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not attract the penalty u/s.271(1)(c). As such, considering all the facts of the case, we are of the considered opinion that it was a case of furnishing of inaccurate par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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