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TMI Blog2017 (1) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... ome and also that the assessee’s claim of capital gains/loss has been accepted by the AO in the assessee’s own case for the next assessment year i.e. A.Y. 2009-10, which was completed in scrutiny under section 143(3) of the Act. The authorities below were not able to controvert arguments put forth by the assessee or hold them to be false. In this view of the matter and respectfully following the decision of the Hon'ble Bombay High Court in the case of Bennett Coleman & Co. Ltd. (2013 (3) TMI 373 - BOMBAY HIGH COURT) and of the Coordinate Bench of the Tribunal in the case of Mita J. Jhaveri (2017 (1) TMI 682 - ITAT MUMBAI) we hold that since there is only a change of head of income from ‘STCG’ as declared by the assessee to ‘business inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iated penalty proceedings under section 271(1)(c) of the Act r.w. Explanation 1 thereunder for furnishing of inaccurate particulars of income by issue of notice under section 274 r.w.s. 271 of the Act simultaneously while completing the order of assessment under section 143(3) of the Act vide order dated 26.11.2010. 2.2 Penalty proceedings were taken up by the AO by issue of show cause notice. The assessee s submissions dated 26.06.2013 and 16.09.2013 sought dropping of penalty proceedings submitting, inter alia, that penalty under section 271(1)(c) of the Act cannot be levied for reclassification of STCG income declared by the assessee as business income by the AO and in this context relied on the decision of the Hon'ble Apex Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether a belief could be treated as bona fide or not. In other words it can safely be held that if an appellant, disregarding all the relevant facts and circumstances, interprets a section that suits its interest then such interpretation cannot be held bona fide belief. AO's view that appellant consciously attempted to reduce tax liability to the extent of ₹ 1,18,735/- being the difference between tax on Short Term Capital Gain of ₹ 81,945/- and tax on Business Income of ₹ 2,00,6801- and as such appellant comes in the purview of section 271(1)(c) of the Act , is upheld. In view of this sole ground of appeal raised by the appellant is dismissed. 3.1 Aggrieved by the order of the CIT(A)-31, Mumbai dated 05.01.2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the case was called for hearing, none was present for the assessee, but the learned D.R., who was present, fairly conceded that the assessee s appeal is to be allowed in view of the decision of the Hon'ble Bombay High Court in the case of Bennett Coleman Co. Ltd. 259 CTR 383 (Bom); wherein penalty for furnishing of inaccurate particulars of income, for change of head of income, was deleted. 3.3.1 We have heard the learned D.R. for Revenue and perused and carefully considered the material on record, including assessee s submissions before the CIT(A) and the judicial pronouncement referred to. From the facts on record it is clear that the assessee s income is mainly from STCG/LTCG arising from dealings in shares and securities and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s declared by the assessee to business income by the AO and there is no addition to income of the assessee. In the factual matrix, it is clear that there is no furnishing of inaccurate particulars of income by the assessee. No doubt, the tax effect would be there since the rate of tax for business income is higher than for STCG . The Hon'ble Bombay High Court in the case of Bennett Coleman Co. Ltd. (supra) has held that when there is only a change of head of income and in the absence of any evidence to show that the assessee s claim was not bona fide, penalty levied under section 271(1)(c) for furnishing of inaccurate particulars of income/concealment of income was to be deleted. At para 3 of its order the Hon'ble Bombay High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty imposed under Section 271(1)(c) of the Act. The revenue has not been able to point out that the finding of the Tribunal is perverse. In these circumstances, we see no reason to entertain the proposed question (ii). 3.3.3 The aforesaid decision of the Hon'ble Bombay High Court in the case of Bennett Coleman Co. Ltd. (259 CTR 383) (Bom) on similar fact situation was followed by a Coordinate Bench of the Tribunal in the case of Mita J. Jhaveri in ITA No. 6210/Mum/2012 dated 30.08.2016. We find that in the case on hand, the assessee had declared the income arising out of purchase and sale activity in shares and securities as STCG as against business income assessed by the AO. It is seen that the assessee had also filed written s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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