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2019 (8) TMI 181 - AT - Income TaxLevy of penalty u/s 271(1)(c) - disallowance of loss claimed in the return of income - as alleged satisfaction is not properly recorded in the assessment order for levy of penalty - HELD THAT:- Assessee has declared the transaction in question in the computation of income and return of income. AO examined the issue of long term capital gains and long term capital loss claimed by the assessee. The assessee conducted the entire transaction through banking channel through stock exchange. AO on the basis of the evidences produced by the assessee on record presumed that the transactions are bogus. These facts clearly show that assessee disclosed the entire facts to the Revenue Department and did not conceal anything to the AO. The assessee never claimed profit in the matter but claimed short term capital loss. The issue is, therefore, covered by order of ITAT ‘Delhi Bench’ in the case of Deepti Agarwal vs. ITO [2018 (9) TMI 709 - ITAT DELHI] in which in the similar circumstances penalty was cancelled. It may also be noted that the AO before levy of the penalty has issued show cause notice dated 16.12.2016 (PB-1) which is reproduced above in which AO has not mentioned as to for which the limb of section 271(1)(c) whether for concealment of particulars of income or furnishing inaccurate particulars of income, show cause notice has been issued. AO did not mention anything in the notice as to for which offence penalty is liable to be imposed against the assessee. AO in the assessment order mentioned both the limbs of section 271(1)(c) of the Act for levy of penalty. Therefore, satisfaction is not properly recorded in the assessment order for levy of penalty. The issue is, therefore, covered by order of ITAT ‘Delhi Bench’ in the case of Ms. Vijay Laxmi Rajput vs. ITO [2019 (6) TMI 397 - ITAT DELHI].The show cause notice issued before levy of the penalty itself is invalid and bad in law and, as such, the resultant proceedings are vitiated. - Decided in favour of assessee
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