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TMI Blog2016 (6) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 271(1)(c) of the Act for furnishing inaccurate particulars of income. - Decided in favour of assessee. - ITA No. 697/Chd/2015 - - - Dated:- 17-6-2016 - Bhavnesh Saini (Judicial Member) For the Appellant : Sudhir Sehgal For the Respondent : S. K. Mittal, DR ORDER This appeal by assessee has been directed against the order of ld. CIT(Appeals)-2 Ludhiana dated 02.03.2015 for assessment year 2003-04 challenging the levy of penalty under section 271(1)(c) of the Income Tax Act. 2. Briefly the facts of the case are that assessment in this case was completed under section 143(3) of the Act vide order dated 30.03.2006 at an income of ₹ 15,32,190/- against returned income of ₹ 14,83,440/-. Penalty proceedings were initiated under section 271(1)(c) of the Act of the Act for concealment of income. Aggrieved against the order of assessment, assessee preferred appeal before ld. CIT(Appeals)-2 Ludhiana who vide order dated 31.03.2010 upheld the addition of ₹ 11,25,000/- made by Assessing Officer on the issue of treating capital gain on purchase and sale of shares as undisclosed income from other sources. The Assessing Officer issued penalty no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income by taking chance, therefore, assessee is liable for penalty. The Assessing Officer, in view of the above held that assessee has furnished inaccurate particulars of income of ₹ 11,25,000/- thereby canceling his true income and accordingly vide separate order, levied the penalty against the assessee. 4. The assessee challenged the penalty order before ld. CIT(Appeals) and detailed submissions of the assessee are reproduced in the impugned order in which the assessee reiterated the same facts submitted before Assessing Officer and also submitted that assessee had already declared capital gains in the return of income and paid tax @ 10%. The transactions have been disclosed in the return of income as well as at the assessment stage. Full facts have been disclosed and all transactions are carried through account payee cheques, therefore, there is no concealment of income. All the sale and purchase of shares have been routed through D-Mat Account. Relevant material have not been confronted to the assessee. The assessee purchased shares of M/s Country Credit Cap Ltd. in preceding assessment year 2002-03 and details are mentioned in the assessment order. The sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the return of income. The transactions are carried through banking channel and through D-Mat Account, only head of income has been changed by Assessing Officer to charge more tax. Therefore, it is not a case of furnishing inaccurate particulars of income. If the brokers have not produced books of account, no fault should be found with the assessee. All the transactions are substantiated through documentary evidences and material on record and even brokers have been identified. He has submitted that quantum and penalty proceedings are distinct and independent. Even if addition on merit have been confirmed by ITAT also, it may not be a case of levy of penalty. He has relied upon following decisions : i) Decision of Hon'ble Supreme Court in the case of CIT Vs Reliance Petroproducts P.Ltd. 322 ITR 158 in which it was held as under : Merely because the assessee claimed deduct/on of interest expenditure which has not been accepted by the Revenue, penalty under s. 271(l)(c) is not attracted; mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. ii) Decision of Hon& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2002-03 therefore, could not be subject matter of the assessment in assessment year in appeal i.e. 2003-04. The assessee, admittedly, filed copies of the purchase bills and sale bills alongwith copies of the accounts of assessee in the books of brokers. All the transactions of sales have been conducted through D-Mat Account and through banking channel. The assessee also filed details to show that shares in question have been listed in Ahmedabad Stock Exchange. The authorities below have not accepted the explanation of the assessee in quantum proceedings because transfer of shares have not been conducted through recognized Stock Exchange. However, the assessee claimed that the sale of shares have been made through various registered Stock Exchange brokers and payments have been received by cheque. Therefore, it is a case where the head of income have been changed by the authorities below for the purpose of charging higher tax from the assessee. The assessee claimed in the return of income the transaction to be earning of income on account of long term capital gain which was considered by the authorities below as income from undisclosed sources. 8. The authorities below also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng channel, therefore, it may not a case of furnishing of inaccurate particulars of income so as to levy the penalty against the assessee. The decisions relied upon by ld. counsel for the assessee also support the case of the assessee that it is not a fit case of levy of penalty. Further, the Assessing Officer in the assessment order initiated the penalty proceedings for concealment of income but in the penalty order, Assessing Officer levied the penalty for furnishing inaccurate particulars of income. Therefore, Assessing Officer was not definite in his conclusion and finding as to on which account penalty should be imposed against the assessee. May be the addition on merit have been confirmed considering the long term capital gain to be income from other sources, but the facts clearly disclose that it is not a fit case of levy of penalty under section 271(1)(c) of the Act for furnishing inaccurate particulars of income. 10. Considering totality of the facts and circumstances noted above, in the light of the decisions of the Hon'ble Delhi High Court referred to above, I am of the view it is not a fit case for levy of penalty under section 271(1)(c) of the Act. I, accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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