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TMI Blog2018 (5) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... 005-06 and 2006-07 confirming levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). 2. These appeals have been transferred from Mumbai Benches to Pune Benches on the request of Shri Amar Nath Jain, legal heir of late Smt. Sarojbala Jain vide application dated 23-03-2017. The notice of appeal was sent to legal heir of assessee on 30-11-2017 for 05-02-2018 on the fresh address furnished at the time of making request for transfer of appeals. The notice sent through RPAD has been received back un-served with postal remarks "Not Claimed Returned To Sender". Fresh notice was issued to the legal heir of assessee on 06-02-2018 for 02-04-2018. The notice of appeal again has been received back with postal remarks "Not Claimed Returned To Sender". The notice of appeal was also sent to the counsel of the assessee on 06-02-2018 for 02-04-2018. The notice has been duly served as is evident from acknowledgment available on record. Despite service of notice on the Counsel, none has appeared on behalf of the assessee nor any letter of adjournment has been received. It appears that the legal heirs of assessee are not interested in pursuing the appeal. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee furnished the name of broker. The Assessing Officer issued notice u/s. 133(6) of the Act to the broker M/s. Vijay Bhagwandas & Co. on 03-12- 2007. The broker confirmed that the purchase bills vide which the assessee has allegedly purchased the shares of FTE were not issued by him. He further clarified that only one sale bill dated 08-10-2004 has been issued by him. However, the same has been issued to a different client i.e. Client Code No. 765 and not the Client Code No. 22524 as was informed by assessee. The Assessing Officer held that since the assessee has failed to substantiate sale and purchase of shares, the transactions purportedly entered into by the assessee are dubious. Accordingly, the Assessing Officer rejected assessee‟s claim of exemption u/s. 54F and made addition of Rs. 31,33,577/- as undisclosed income. Further, the Assessing Officer disallowed assessee‟s claim of payment of commission on transfer of shares Rs. 1,56,678/-. Aggrieved by the assessment order dated 10-12-2007, the assessee filed appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) rejected the submissions of assessee and confirmed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies is adventure in the nature of trade. The ld. DR to further buttress his submissions placed reliance on the decision of Mumbai Bench of the Tribunal in the case of Income Tax Officer Vs. Shamim M. Bharwani reported as 69 taxmann.com 65. 6. We have heard the submissions made by ld. DR and have perused the orders of the authorities below. We have also considered the decisions on which the ld. DR has placed reliance. It is evident from the records that the assessee has failed to furnish any documentary evidence in support of sale and purchase of shares of FTE. The assessee has merely given the name of broker M/s. Vijay Bhagwandas & Co. in support his contentions. During the course of inquiry by Assessing Officer from aforesaid broker it transpired that none of the bills as mentioned by the assessee for purchase and sale of shares of FTE were issued by the broker in favour of the assessee. The assessee has miserably failed to substantiate genuineness of transactions for sale and purchase of shares on which exemption u/s. 54F of the Act has been claimed. The assessee has also failed to justify phenomenal increase in the value of share from Rs. 1.16 per share to Rs. 70.18 per sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee filed appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) confirmed the additions. Since, the modus operandi of assessee for claiming Long Term Capital Gain exempt u/s. 10(38) on sale of shares in the assessment year under appeal is similar to the assessment year 2005-06, the findings given by us in ground Nos. 1 to 4 in ITA No. 6360/MUM/2009 for assessment year 2005-06 would mutatis mutandis apply to the ground Nos. 1 and 2 for assessment year 2006-07. Hence, for the detailed reasons given therein, the ground Nos. 1 and 2 raised in present appeal are dismissed. 12. The ground No. 3 raised in the present appeal relating to payment of commission for providing accommodation entries is identical to ground No. 5 in ITA No. 6360/MUM/2009 for assessment year 2005-06. For the reasons given while deciding ground No. 5, the ground No. 3 is dismissed. 13. In ground No. 4 of the appeal the assessee has impugned charging of interest u/s. 234A, 234B and 234C of the Act. Charging of interest u/s. 234A, 234B and 234C is consequential and mandatory, hence, ground No. 4 raised in appeal by assessee is dismissed being devoid of any merit. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the penalty has to be levied. 20. The Hon‟ble Karnataka High Court in the case of Commissioner of Income Tax Vs. Manjunatha Cotton and Ginning Factory reported as 359 ITR 565 has held that „concealment of income‟ and „furnishing inaccurate particulars of income‟ are two different expressions carrying different connotations. The Assessing Officer has to specifically state the charge for levy of penalty u/s. 271(1)(c) of the Act. There should be no ambiguity in the mind of Assessing Officer with respect to charge for which penalty u/s. 271(1)(c) is to be levied while recording satisfaction, as well as at the time of levy of penalty. 21. The Pune Bench of the Tribunal have been consistently deleting levy of penalty u/s. 271(1)(c) where there has been ambiguity in recording of satisfaction and levy of penalty. The charge for levy of penalty u/s. 271(1)(c) has to be specifically conveyed to the assessee at the time of recording satisfaction, otherwise, the principles of natural justice are offended. The assessee should know the charge which he has to meet while defending levy of penalty. 22. Thus, in view of the defect in recording satisfaction for levy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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