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TMI Blog2016 (4) TMI 1261X X X X Extracts X X X X X X X X Extracts X X X X ..... ry evidence and explanation of the assessee was not found to be bogus or false. Since assessee disclosed complete facts in the return of income therefore, there cannot be filing of inaccurate particulars of income. We are of the view that even if the quantum addition have been confirmed upto the stage of Hon'ble High Court, however, it is not fit case of levy of penalty under section 271(1)(c) - Decided in favour of assessee. - ITA Nos. 459, 460, 461 and 462/CHD/2015 - - - Dated:- 27-4-2016 - Bhavnesh Saini, Member (J) and Annapurna Gupta, Member (A) For Appellant: Tej Mohan Singh For Respondents: Manjit Singh, DR ORDER Bhavnesh Saini, Member (J) All the appeals by different assessees are directed against common order of ld. CIT (Appeals) Hisar dated 12.02.2015 for assessment year 2008-09 challenging the levy of penalty under section 271(1)(c) of the Income Tax Act. 2. We have heard ld. Representatives of both the parties and perused the material available on record. Both the parties mainly argued in ITA 459/2015 (Smt. Gurdip Kaur) and submitted that facts are same in the remaining appeals and order in the case of Smt. Gurdip Kaur may be followed in ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA 280/2013 vide Judgment dated 11.11.2013 found no merit in the appeal of the assessee and therefore, dismissed the appeal. The decision of the High Court was applied in all remaining cases. The Assessing Officer issued show cause notice to the assessee as to why penalty should not be imposed under section 271(1)(c) of the Act. The Assessing Officer found that assessee failed to prove the genuineness of the share transactions shown to be resulting in short term capital loss. The Assessing Officer has held that assessee has furnished inaccurate particulars of income to reduce the taxable income by way of claiming short term capital loss. The Assessing Officer applied Explanation-I to Section 271(1)(c) of the Act and relied upon certain decisions and levied the penalty against the assessee. 6. The assessee challenged the penalty order before ld. CIT (Appeals) and it was submitted that mere confirmation of disallowance of loss cannot ip-so-facto be made a basis to levy penalty. No penalty can be levied unless it is established that assessee has furnished inaccurate particulars of income. It was submitted that assessee, in the course of assessment proceedings had furnished the evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded by the Tribunal and by applying Explanation-I to Section 271(1)(c) of the Act confirmed the levy of penalty and dismissed the appeal of the assessee. 8. The ld. counsel for the assessee reiterated the submissions made before authorities below. He has submitted that all the particulars of capital gain were disclosed in the return of income. The ld. CIT (Appeals) deleted the addition on merit which was restored by the Tribunal. PB-121 is purchase bill of the shares which have not been doubted by the authorities below. PB-122 is the details of shares/copy of Client Master List. PB-123 is confirmation by company to the Assessing Officer directly under section 133(6) of the Income Tax Act of sale of shares at the price of ₹ 10/- per share in which book value was shown at ₹ 56/- but assessee sold the same at ₹ 10/- per share. The face value is ₹ 10/- and premium is ₹ 90/- per share. PB-125 is transfer details. PB-127 is Allotment Advice by M/s. Arcee Ispat Udyog Ltd., Hisar. PB-128 is ledger account of the assessee in the books of M/s. Arcee Ispat Udyog Ltd., Hisar. PB-129 is bank account showing all the transactions carried through banking channel. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 006 dated 10.04.2015, decision of Hon'ble Supreme Court in the case of Mak Data Pvt. Ltd. 358 ITR 593 and decision of Hon'ble Punjab Haryana High Court in the case of Shiv Narain Khanna 107 ITR 542. The ld. DR submitted that finding of fact recorded against the assessee clearly revealed that assessee has concealed the particulars of income therefore, penalty is leviable. 9. We have considered rival submissions. It is well settled law that findings given in quantum are relevant and have probative value but the finding of fact recorded in the quantum proceedings alone are not sufficient to levy the penalty against the assessee automatically. It is well settled law that quantum and penalty proceedings are independent and distinct proceedings. In this case, it is undisputed fact that the assessee in the return of income has declared income from capital gains and disclosed all the particulars of capital gains including the short term capital gain. Thus, the assessee disclosed all the particulars on this issue on which penalty has been imposed. The contention of the assessee is supported by purchase bill of the shares alongwith Client Master List which have not been disputed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere making of claim which is not sustainable in law by itself will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars of income. Hon'ble Delhi High Court in the case of CIT Vs. Nath Bros. International Ltd. 288 ITR 670 held as under: The assessee had claimed dividend income as his business income and according to the assessee it was entitled to a deduction under clause (baa) of the Explanation to section 80HHC(4C) of the Income-tax Act, 1961. The Assessing Officer disallowed the claim and imposed penalty. The Tribunal came to the conclusion that the assessee had disclosed all the facts, and therefore, even though it had made an erroneous claim which could not be justified in law, that by itself did not attract the penal provisions of the Act. On appeal Held, dismissing the appeal, that there was full disclosure of all relevant material. It could not be said that the conduct of the assessee attracted the provisions of section 271(1)(c). The cancellation of penalty was justified. 9(ii) Hon'ble Supreme Court in the case of CIT Vs. Reliance Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has failed to produce documentary evidence to substantiate its claim. 10(i) It is clear from the language of Section 271(1)(c) of the Act that penalty can be imposed for two offences i.e. for concealing the particulars of income or furnishing inaccurate particulars of income. The Assessing Officer initiated penalty proceedings for furnishing inaccurate particulars of income but did not levy the penalty for furnishing inaccurate particulars of income. The Assessing Officer levied penalty because assessee failed to produce documentary evidence to substantiate its claim with the aid of Explanation-I to Section 271(1)(c) of the Act despite the fact that penalty proceedings were not initiated for concealment of particulars of income. The finding of the Assessing Officer in the penalty order are incorrect in the sense that Assessing Officer has recorded his satisfaction in the penalty order that assessee has failed to produce documentary evidence to substantiate its claim because assessee furnished/produced documentary evidence as noted above in support of its claim of sale of shares at ₹ 10/- per share to the share broker and the documentary evidences filed by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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