Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (1) TMI 630 - AT - Income TaxPenalty under section 271(1)(c) - unaccounted transaction of shares - dilution of quantum penalty seeked by assessee - Held that:- We find the sequence of transactions as very disconcerting and integruing. The purchase transactions is not routed through stock exchange. It is ‘off market’ transaction where shares have been acquired against payment of ‘cash’. The impugned transaction is the only transaction with the Mumbai Brokers. Again, the shares were received in the Demat Account of the assessee on 05.09.2002 after a gap of nearly 1 ˝ years from its purchase on 13.04.2001. The shares were sold on 17.08.2002 whereas the shares were received in Demat Account on 05.09.2002 towards purchases, these were transferred against sale on 17.09.2002. The probe by the Investigation Wing of Income Tax Department, revealed by the purchased transactions regarding the shares of Database Finance Ltd., was not genuine. Couple with this, the fundamentals of the company were found to be negative and the company had not income of more than couple of lakhs. However, there is a huge price rise. From the above facts, it is crystal clear that the purchase transactions have been concocted and manipulated to declare wrongful long term capital gains. The transactions have been executed through Demat Account and transfer has taken place against the sale. The sale part of the transactions has not been disputed per-se. In view of the above mitigating circumstance, we feel that the assessee deserves benefit of doubt. Accordingly, we concur with the alternative plea taken by the assessee that the quantum of penalty should be reduced to 100% of the tax evaded. In our view, dilution of quantum penalty is justified. - Decided partly in favour of assessee Undisclosed LTCG - Held that:- assessee has made cheque payments against purchase for which delivery has been received. Likewise, delivery has been duly given against sale and the payment thereof has been received by cheque. The CIT(A) has accepted the purchase and sale transaction albeit holding the same as short term capital gain instead of long term capital gain. In the circumstances, it is difficult to say that the transactions do not exist per se. In the totality of circumstances, we feel that while the quantum addition has been sustained on a different footing than what was proposed by the Assessing Officer, imposition of penalty would not be justified on the basis of unproved facts. We, accordingly, set-aside the order of the CIT(A) and cancel the penalty imposed.- Decided in favour of assessee
|