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2016 (3) TMI 869 - ITAT KOLKATAPenalty u/s. 271(1)( c) - wrong claim of exemption towards long term capital gains on sale of shares of M/s. Vishal Retail Ltd - claim for exemption u/s. 10(38) - Held that:- We find that the assessee was under bonafide belief that on off market share transaction of trading in listed company share, no capital gains would arise. We hold that this bonafide belief cannot be doubted in the facts of the case. We also hold that the assessee had duly come forward to rectify the mistake in not mentioning the long term capital on sale of listed company’s shares on off market in his original return of income, and on noticing the same the assessee immediately filed revised computation of income during assessment proceedings and as entered in the order sheets by the ld.AO. Thus, the assessee offered the same voluntarily before detection by the department. We also find that the version of the ld.AO in his penalty order that assessee was confronted with the specific issue on taxability of long term capital gain on sale of shares of M/s. Vishal Retail Ltd is factually incorrect. The assessee had furnished the explanation to the assessee by filing a revised computation of income offering long term capital gains voluntarily. We also find that the assessee had also given explanation for not offering the same in the original return of income due to his bonafide belief. His bonafide explanation has not been found to be false by the ld. AO. From the above, it could be safely concluded that as per Explanation 1 to section 271 (1) ( c ) of the Act, no penalty could be imposed on the assessee in the facts of the case. - Decided in favour of assessee
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