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2010 (1) TMI 877 - AT - Income TaxPenalty levied u/s 271(1)(c) - capital asset was converted into stock in trade - profits or gains arising from the transfer by way of conversion by the owner of a capital asset into, or its treatment by him as stock-in-trade of a business carried on by him shall be chargeable to income-tax as his income of the previous year in which such stockin- trade is sold or otherwise transferred by him and, for the purposes of section 48, the fair market value of the asset on the date of such conversion or treatment shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset - Held that:- penalty is must only when there is some element of deliberate default and not a mere mistake, when the assessee has offered an explanation which was not found false and when the assessee's explanation was bonafide and when all the facts relating to the same have been disclosed, then no penalty u/s 271(1)(c) was called for, deletion of penalty levied u/s 271(1)(c) upheld, appeal of the Revenue is dismissed
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