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TMI Blog2024 (10) TMI 1204X X X X Extracts X X X X X X X X Extracts X X X X ..... y disagreed with the business transaction of the assessee whereby the proprietary concern was taken over by a company in which the assessee is a majority shareholder. Due to the long-term capital loss, which is the basis for the levy of the impugned penalty, there is no evasion of tax. We find that while examining the meaning of the term particulars in section 271(1)(c) as in CIT v/s Reliance Petroproducts (P) Ltd [ 2010 (3) TMI 80 - SUPREME COURT] held that 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. We are of the considered view that the levy of penalty under section 271(1)(c) of the Act in the facts of the present case is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elected for scrutiny assessment under CASS and statutory notices under section 143(2) and section 142(1) of the Act were issued and served on the assessee. During the year under consideration, the assessee s business was taken over by a private limited company named M/s Satish Enterprise Private Limited with effect from 02/04/2012. During the assessment proceedings, it was observed that the assessee s proprietary business was succeeded by M/s Satish Enterprise Private Limited in which the assessee is a 99.63% shareholder and claimed long-term capital loss amounting to Rs. 9,83,137. Accordingly, the assessee was asked to show cause as to why the transaction should not be considered a slump exchange instead of a slump sale. The assessee was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de order dated 22/03/2016 passed under section 143(3) of the Act disagreed with the submissions of the assessee and held that the assessee is only moving funds from the personal account to the company and from the company to proprietorship and the above funds are shown as loan (liabilities) and the balance sheet of M/s Satish Enterprise Private Limited. Thus, it was held that it was an afterthought and hence clearly a colourable device. Accordingly, the AO held that the transaction carried out by the assessee cannot be considered a transfer and the loss claimed by the assessee cannot be allowed to be carried forward. The AO further held that the transaction cannot be treated as a slump sale as individual values were determined by M/s Satish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that part consideration was actually paid by M/s Satish Enterprise Private Limited by taking a loan from the assessee. Accordingly, the AO concluded that the assessee is only moving funds from the personal account to the company and from the company to the proprietorship and the above funds are shown as loans (liabilities) in the balance sheet of M/s Satish Enterprise Private Limited. The AO further alleged that the assessee is the decision maker and he has transferred his business unit in consideration less than the net worth and incurred capital loss. As a result, the AO made an addition of the long-term capital gains amounting to Rs. 9,83,137 to the total income of the assessee. On the other hand, as per the assessee, M/s Satish En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1)(c) of the Act, the Hon ble Supreme Court in CIT v/s Reliance Petroproducts (P) Ltd.; [2010] 322 ITR 158 (SC) held that 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. The relevant findings of the Hon ble Supreme Court, in the case cited supra, are as follows: 9. We are not concerned in the present case with the mens rea. However, we have to only see as to whether in this case, as a matter of fact, the assessee has given inaccurate particulars. In Webster's Dictionary, the word inaccurate has been defined as : not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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