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2013 (11) TMI 314 - AT - Income TaxPenalty u/s 271(1)(c) of the Income Tax Act – Assessee sold shares at a loss and claimed for it – Held that:- Bald plea of the AO and also by the DR before us that the assessee has claimed a loss cannot by itself justify the exigibility of penalty under section 271(1)(c) - It is a fact that the assessee was unable to produce the details of the shares of the two companies before the AO but, before the CIT(A), the assessee was able to produce the balance sheet and profit & loss account of the two impugned companies, whose shares, the assessee has sold at a loss. As has been held by the CIT(A), the book value could not be the sole criteria for deciding the fair market value of the shares sold. The co-ordinate Bench in the case of Rupee Finance & Management (P) Ltd., reported in [2007 (2) TMI 240 - ITAT BOMBAY-J], Mumbai, ITAT held that in case of transfer of shares to a group company at cost price, difference between fair market value of the shares and their cost price cannot be brought to tax as capital gains. Since, there being no material to show that the assessee had received more consideration then recorded in the books. Disallowance of the loss claimed has been non-filing of appeal against the order of the AO, cannot, by itself, justify that penalty is exigible and leviable on the assessee, despite the fact that the assessee has placed all the material facts before the AO. There could have been various reasons for non filing of the appeal, which fact could not lead to a conclusion of furnishing of inaccurate particulars of income or concealing particulars of such income - The issue is also fortified by decision of the Hon'ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd., reported in [2010 (3) TMI 80 - SUPREME COURT] – Decided against the Revenue.
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