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2017 (2) TMI 333 - AT - Income TaxPenalty u/s 271(1)(c) - addition u/s 14A - Held that:- We do not see any concealment or furnishing of inaccurate particulars in respect of the disallowance made under Section 14A of the Act. Disallowance came to be made by invoking the provisions of Rule 8D. Here the assessee proved that it has own funds much more than investments and therefore there is no question of disallowance under 8D 2(ii). Coming to administrative expenses disallowed under Rule 8D 2(iii) we find that during the assessment proceedings, the assessee itself given the computation u/s 14A for disallowance of estimated expenditure under Rule 8D 2(iii). This expenditure came to be disallowed by the operation of law but not on account of the reason that the assessee furnished inaccurate particulars or concealment of income. Hence no penalty is attracted for such disallowance. Addition made towards short term capital gains - Held that:- The bonafide explanation of the assessee that it is an inadvertent mistake and bonafide error while computing the capital gains is not proved to be false by the assessing officer. The assessing officer could not prove that the explanation of the assessee was not genuine. The assessee computed long term capital gain taking the sale proceeds of entire investments which were shown in the profit and loss account may be by oversight or inadvertence. It is only a change in the head of income. It is not complete non disclosure by the assessee. Therefore, the explanation of the assessee since not proved to be non genuine, in our view, there is no concealment of income or furnishing of inaccurate particulars by the assessee in respect of computation of capital gains, thus we delete the penalty levied by the assessing officer on the addition of capital gains. Assessee appeal allowed.
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