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TMI Blog2018 (7) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... fective ground of appeal is about deleting the penalty of Rs. 41. 02 lakhs, imposed by the AO, for furnishing inaccurate particulars, u/s. 271(1)(c) of the Act. Brief Facts: During the assessment proceedings, the AO found that the assessee had recorded 'unsold stock of built up premises as stock in trade till AY. 2005-06, that thereafter the same was shown as investment w. e. f. 01. 04. 2005 at book value, that it had declared LTCG in the return of income on account of difference of sale consideration and indexed cost of acquisition. The AO was of the view that since the premises sold by the assessee were out of unsold stock in trade, the profit from sales should have been treated as business income. Accordingly, he added the said pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestment in Mayfair-I and Mayfair-II as investments in those years, that premises had been partly sold and the income therefrom was under dispute as to the head of income, that the closing stock in the balance sheets from these two projects was NIL as the same had been transferred to Investment account, that the AO did not disturb the quantum of the income computation, that that the assessee had declared the profit from sale of total 4 premises at Rs. 381. 05 lakhs, that the profit was credited to the P&L A/c for purposes of accounting, however extracted as a separate head of LTCG in the computation of income, that the AO had simply assessed the business income starting from the net profit as per P&L A/c, that the AO had not only accepted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the stock in trade into investment, that in subsequent years it sold the assets and profit earned on sale of investment was offered to tax, that the assessee had disclosed all the necessary details about the transactions. He relied upon the cases of Reliance Petro Products Pvt. Ltd. (322 ITR 158), S M Construction( ITA 412 of 2013)and Dalmia Dychem Industries Ltd. (234 Taxman 9). 5. We have heard the rival submissions and perused the material before us. We find that the assessee had shown unsold stock as investment in its books of accounts from 01. 04. 2005, that that profit arising out of the sale of the flats was offered for tax under the head capital gains, that the AO was of the opinion that the stock in trade cannot partake the charac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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