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2014 (3) TMI 615 - AT - Income TaxPenalty u/s 271(1)(c) of the Act - Revenue was of the view that the assessee had neither in the return of income nor in the accompanied documents, disclosed that the bonds were sold within the period of three months and the assessee did not suo–motu disallow the short term capital gain on sale of these bonds to the extent of dividend received – Held that:- The assessee has purchased units of Sundaram Mutual Funds for Rs. 40 lakhs on 26th December 2003, which is a record date - the assessee had received dividend income – the units have been redeemed on 26th March 2004 after incurring a loss which has been claimed by the assessee as a short term capital loss in the return of income - As per the provisions of section 94(7), the loss, if any, arising to the assessee on account of purchase and sale of securities or units, then such a loss has to be ignored if the securities has been sold or transferred within the period of three months. The Assessing Officer has calculated the period of three months on calendar basis which perhaps is correct - it cannot be held that the assessee has furnished any inaccurate particulars or concealed any income - the assessee’s belief or explanation cannot be held as wrong which was given during the course of quantum proceedings as well as penalty proceedings is not bonafide - thus, the order of the CIT(A) upheld – Decided against Revenue.
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