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2015 (1) TMI 1243 - AT - Income TaxLevy of penalty imposed u/s 158 BFA(2) - CIT(A) deleted the penalty levy - Held that:- Return of income was not filed within due date prescribed u/s 139(1) and in the meanwhile since there was a search, long term capital gain was rightly assessed as undisclosed income within the meaning of Section 158BB(1)(c) of the Act. However, to hold that the assessee has concealed particulars of income and penalty u/s 158BFA(2) is to imposed on facts of this case is unjustified. The penalty u/s 158BFA is not automatic and the assessee did not have any intention to conceal the said capital gain for the purpose of taxation. The reason for us to hold that the assessee did have any intention to conceal the capital gains is evident from the undisputed fact that the investment of the impugned shares were duly reflected in the financial statement of the assessee in the year of purchase and the sale consideration/gain received during the A.Y. 1999-2000 was deposited in the Bank account which was duly disclosed to the Income Tax Department. Further, the unaudited P&L account and balance sheet which were seized in the course of search contained the recording of the transaction of the sale of the shares and resulting capital gains. Further, whether long term capital gains can be treated as “undisclosed income” is debatable issue. The Hon’ble jurisdiction High Court has held in the case of CIT Vs. H.B. Leasing and Finance Co. Ltd. (2011 (2) TMI 434 - Delhi High Court ) that the issue can be said to be debatable when substantial question of law has been admitted and when quantum proceeding is debatable, the penalty cannot be imposed. - Decided in favour of assessee.
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