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2014 (11) TMI 293 - AT - Income TaxPenalty u/s 271(1)(c) – Inaccurate particulars furnished or not - Whether offering the tax at a concessional rate applicable on a different category of income would amount to furnishing inaccurate particulars of income attracting the provisions of section 271(1)(c) - Held that:- The Long Term Capital Gain arose on sale of paintings, therefore, the income from Long Term Capital Gain from sale of paintings is not allowable for concessional rate of tax as per the proviso to section 112(1) of the Income Tax Act - Though, by applying concessional rate of tax at 10% on the ground that the assessee has not taken the benefit of indexed cost for computation of Long Term Capital Gain would help the assessee if in the return of income, the assessee has given the impression that the Long Term Capital Gain is arising from the transfer of listed shares, bonds, securities etc., however, in the return of income the assessee has mentioned the capital gain arising from the sale of paintings - The source of income has been explained by the assessee in all the return of income which remains same and, therefore, there is no change in the source of income and the category of income which is specified as capital gain from sale of paintings then even if the assessee has applied incorrect rate of tax in the revised return, it would not constitute that the assessee has changed the class/nature of income eligible for concessional tax u/s 112(1) of the Income Tax Act. When there is no attempt on the part of the assessee to show the Long Term Capital Gain in a different category then merely because a concessional rate of tax was applied in the revised return does not ipso facto lead to the conclusion that the assessee has concealed the particulars of income - all the facts and circumstances supports the explanation of the assessee that the concessional rate of tax on Long Term Capital Gain was applied on the basis of the advice of the Chartered Accountant, therefore, it was a bona fide mistake - The explanation is quite reasonable as per the Explanation 1B of section 271(1) of the Income Tax Act particularly in view of the fact that the assessee did not claim the benefit of indexed cost while computing the Capital Gain – thus, the order of the CIT(A) is upheld for deleting the penalty by following the decision in Price Waterhouse Coopers (P.) Ltd. Versus Commissioner of Income-tax, Kolkata [2012 (9) TMI 775 - SUPREME COURT] – Decided against revenue.
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