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2015 (7) TMI 358 - ITAT MUMBAI

2015 (7) TMI 358 - ITAT MUMBAI - TMI - Penalty u/s 271(1)(c) - Short term Capital Gain was assessed as business income - Held that:- Following the earlier order of this Tribunal as well as the Judgment in the case of CIT Vs. Amit Jain (2013 (1) TMI 340 - DELHI HIGH COURT), we are of the view that the Short term Capital Gain offered by the assessee from sale and purchase of shares treated by the Assessing Officer as business income would not amount to furnishing inaccurate particulars of income o .....

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assessee has raised following grounds:- "1. The Commissioner of Income Tax (Appeals) -4, Mumbai (hereinafter referred to as the CIT(A)) erred in upholding the action of the Deputy Commissioner of Income tax - 3(2) Mumbai (hereinafter referred to as the Assessing Officer ) in levying penalty of ₹ 24,05,795/- under section 271(1)(c) of the Act". 2. The assessee company is engaged in the business of share trading and advisory In the course of assessment completed u/s 143(3), the Ass .....

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Short term Capital Gain was assessed as business income and levied the penalty of ₹ 24,05,795/- being 100% of tax sought to be evaded vide order dated 22.3.2013. The assessee challenged the action of Assessing Officer against the levy of penalty before the CIT(A) but could not succeed. 3. Before us, the Ld. Authorized Representative of the assessee has submitted that there is no concealment of income or furnishing inaccurate particulars of income on the part of the assessee but the additio .....

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s, facts as well as explanation of claiming gain arising from purchase and sale of shares as Short term Capital Gain. Thus the Ld. Authorized Representative has submitted that assessing the income under a different head would not amount to concealment of income of furnishing inaccurate particulars of income when the income remained same. In support of his contention he has relied upon the decision of Hon ble Delhi High Court in the case of CIT Vs. Amit Jain dated 21.12.2012 in ITA 683/ 2012 and .....

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in ITA No. 2172/Mum/2011and submitted that an identical issue was decided by the Tribunal in favour of the assessee and consequently deleted the penalty. 4. On the other hand, the Ld. DR has heavily relied upon the orders of authorities below and submitted that the additional amount has been brought to tax by the Assessing Officer by assessing the income correctly. 5. Having considered the rival submissions as well as relevant material on record, we note that there is no dispute that the assesse .....

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of revenue that the assessee has suppressed any fact or presented inaccurate particulars of income so far as the nature of transaction being sale and purchase of shares and the amount of gain arising from the transaction are concerned. The only dispute in the assessment proceedings, is the treatment of income and accordingly the higher amount of tax. The Assessing Officer treated the Short term Capital Gain offered by the assessee as business income and brought the same to tax as per the applica .....

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d sale of shares as business income and accordingly shown the total income of the assessee at ₹ 1,02,42,338/-. Thus, it is clear that as far as the quantum of income as declared by the assessee and finally assessed by the Assessing Officer is concerned, there is no change except some minor disallowance of loss on account of speculative loss by the Assessing Officer. Thus the penalty has been levied by the reason of treatment of capital gain declared by the assessee as business income, whic .....

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f income. The Tribunal while deciding the issue in quantum appeal has concluded in paras 7 & 8 as under. "Taking the totality of the facts and circumstances of this case into consideration, we are of the considered view that there is no infirmity in the orders of the Revenue authorities in treating the purchase and sale of shares by the assessee company as adventure in the nature of trade and accordingly assessing the profit under the head "profits and gains of business". Befo .....

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d circumstances as prevailing in the year under appeal. There is no discussion in the assessment order for assessment year 2006-07 about the transactions taking place in that year. Therefore, the said assessment order, in our view, does not affect the decision of the revenue authorities in the year under appeal. Finding no merit in this appeal of the assessee, we dismiss the same." 3.1 Thus, it is clear that even for the subsequent year i.e. AY 2006-07, the income admitted by the assessee a .....

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