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2017 (11) TMI 1939 - ITAT MUMBAIPenalty u/s 271(1)(c) - furnishing of inaccurate particulars of income by the assessee with regard to computation of book profit under section 115JB - non-inclusion of long term capital gain from sale of equity shares while computing the books profit under section 115JB - HELD THAT:- A perusal of the return of income filed by assessee for the impugned assessment year,nd computation of income accompanying such return clearly indicate that the assessee has disclosed full particulars relating sale of equity shares and the long term capital gain derived therefrom - a perusal of the assessment order also reveals that the information relating to earning of long term capital gain from sale of equity shares by the assessee and non-inclusion of the same for computing book profit under section 115JB came to the notice of the Assessing Officer from the statement of total income filed by the assessee along with the return of income and not from any other source. Thus,assessee has furnished full particulars of the income derived from sale of equity shares. Though, it may be a fact that long term capital gain from sale of shares is not exempt for computing book profit under section 115JB, however, such exemption claimed by the assessee appears to be for the reason that assessee was under a bona fide belief that, since, long term capital gain as per section 10(38) is exempt from taxation under the normal provisions of the Act, the same would also apply for computing book profit. The explanation of the assessee that non-inclusion of long term capital gain for computing book profit was due to bona fide reasons cannot be brushed aside lightly. In any case of the matter, the factual matrix clearly reveals that the assessee has made full disclosure of facts relating to earning of long term capital gain from sale of equity shares in the return of income as well as in the computation of income. Non-inclusion of long term capital gains by computing book profit under section 115JB , in our view, is a mere computational error due to a bona fide belief entertained by the assessee that such income is exempt from taxation. That being the case, the ratio laid down by in the case of Pricewaterhouse Cooper Pvt. Ltd. [2012 (9) TMI 775 - SUPREME COURT] will clearly apply to the facts of assessee’s case. Thus assessee’s explanation that it excluded long term capital gain from sale of equity shares while computing book profit under section 115JB entertaining a belief that it is also exempt from taxation, appears to be plausible. Therefore, in our considered opinion, the assessee cannot be charged with the offence of furnishing inaccurate particulars of income so as to levy penalty under section 271(1)(c) - Decided in favour of assessee.
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