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2020 (11) TMI 341 - ITAT CHENNAIPenalty u/s. 271(1)(c) - omission of inclusion of capital gain on transfer of shares that too arising out of a book adjustment - HELD THAT:- Explanation furnished by the assessee that by inadvertent mistake and human error, the capital gain derived from transfer of equity shares has not been reported in the return of income filed for the relevant year appears to be bonafide. Had it been the case of the AO that the assessee has received consideration for transfer of equity shares and yet not reported capital gain from transfer of shares in the return of income, then obviously explanation furnished by the assessee cannot be held to be bonafide. It is quite possible when a transaction is settled by book adjustment that too on the direction of Hon'ble High Court, there is every possibility to have an understanding that particular transaction cannot lead to tax. Moreover, in the instant case, even after computation of long term capital gain from transfer of equity shares the assessed income for the impugned year results into net loss. There is no deliberate attempt from the assessee to conceal particulars of income or evade payment of taxes. Therefore, the explanation furnished by the assessee that it was by inadvertent mistake omitted to include long term capital gain derived from transfer of shares in the return of income is bonafide and for this liability cannot be fastened u/s.271(1)(c) of the Act. The learned CIT(A) without appreciating these facts simply confirmed the penalty levied by the Assessing Officer u/s.271(1)(c) - Decided in favour of assessee.
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