TMI Blog2015 (9) TMI 1235X X X X Extracts X X X X X X X X Extracts X X X X ..... had admitted the mistake it committed in claiming exemption, by filing revised computation and setting off to business loss, on the very first date of hearing itself before the same was noticed by the AO. Therefore, assessee has neither furnished inaccurate particulars nor concealed income. In fact it is not the case of Revenue that assessee has concealed any income. this is not a fit case for levying penalty. - Decided in favour of assessee. - I.T.A. No. 504/HYD/2014 - - - Dated:- 23-9-2015 - Shri B. Ramakotaiah , Accountant Member For the Petitioner : Shri A.V. Raghu Ram, AR For the Respondent : Shri Y. Sesha Srinivas, DR ORDER This appeal is preferred by assessee against the order of Commissioner of Income Tax (Appeals)-IV, Hyderabad dated 10-01-2014 confirming penalty U/s. 271(1)(c) of the Income Tax Act [Act] levied by the Assessing Officer (AO) vide order dt. 17-05-2012. Assessee is aggrieved on levying penalty. 2. Briefly stated, assessee is an investment company and filed its return of income for the assessment year under consideration on 22-02- 2010 admitting a loss of ₹ 10,90,691/-. Along with that, assessee claimed exemption of divide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of capital gains, AO continued the penalty proceedings initiated in the assessment order for furnishing inaccurate particulars of its income in respect of capital gains on sale of equity shares. Assessee vide letter dt. 13-02- 2012, explained that the shares were listed in Stock Exchange, therefore, assessee was under the impression that capital gains were exempt U/s. 10(38) and this was claimed purely by mistake. Further, it was submitted that calculation of capital gains was on the basis of method adopted FIFO/LIFO, which can only be a difference of opinion. The company adopted LIFO method where as AO adopted FIFO method. In order to co-operate with the department and not to have continued/ protracted litigation, assessee has accepted the method adopted by the AO and paid the taxes thereon. It was submitted that there was no willful or malafide intention by assessee to furnish inaccurate particulars or concealment of income. 3. AO however, did not agree. He was of the opinion that determination of date of transfer, period of holding and cost of acquisition in respect of securities held in de-materialized form were governed by Section 45(2A) of the Act and Circular No. 76 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) confirmed the penalty and dismissed the appeal. 6. Assessee is aggrieved on the impugned order of the CIT(A) and raised two grounds holding that there is neither concealment of income nor furnishing of inaccurate particulars and CIT(A) erred in confirming the penalty. Ld. Counsel reiterated his arguments before the authorities and Ld. DR relied on the orders of AO and CIT(A). Ld. Counsel also placed on record computation of income in earlier year along with annual report of the year in Paper Book. 7. I have considered the relevant provisions and examined the facts available on record. As far as levy of penalty U/s. 271(1)(c) is concerned, it has two components i.e., assessee should have concealed the particulars of his income or furnished inaccurate particulars of such income. As seen from the assessment order and also the penalty order, AO initiated penalty proceedings for furnishing inaccurate particulars of such income. Therefore, it is not a case where assessee has concealed particulars of income. 8. Now, coming to the issue whether assessee has furnished inaccurate particulars of income, it is necessary to observe, what constitutes furnishing of inaccurate par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ividend income of ₹ 2,20,381/- as exempt, the income from business was offered at ₹ 61,32,704/-. Therefore, assessee even though is having name as Construction Pvt. Ltd., is an investment company and purchase and sale of shares was shown as business in earlier years. As seen from the Balance Sheet in the impugned assessment year, assessee had opening shares of Sagar Cements Ltd alone at ₹ 30,50,443/- and (with an aggregate market value of ₹ 12.71 Crores) and a further acquisition of shares to an extent of ₹ 11,08,51,434/- (at a market value of ₹ 4,69,85,670/-). Assessee has sold 12,000 shares during the year and claimed Long Term Capital Gain under the stated impression that the shares of M/s. Sagar Cements Ltd., were quoted in Stock Exchange. It was claimed that by mistake assessee did not notice that the shares were not sold through Stock Exchange. Be that as it may, assessee filed revised computation on 10-10-2011 i.e., on the very first date of hearing of the scrutiny proceedings. The assessment order indicates the date of hearing as 10-10-2011, 31-10-2011 and 11-11-2011. Assessment was completed on 14-11-2011. This indicates that on the ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sake of clarity, provisions of Section 45(2A) are extracted as under: Sec. 45(2A) Where any person has had at any time during previous year any beneficial interest in any securities, then, any profits or gains arising from transfer made by the depository or participant of such beneficial interest in respect of securities shall be chargeable to income-tax as the income of the beneficial owner of the previous year in which such transfer took place and shall not be regarded as income of the depository who is deemed to be the registered owner of securities by virtue of sub-section (1) of section 10 of the Depositories Act, 1996, and for the purposes of- (i) section 48; and (ii) proviso to clause (42A) of section 2, the cost of acquisition and the period of holding of any securities shall be determined on the basis of the first-in-first-out method. Explanation.-For the purposes of this sub-section, the expressions beneficial owner , depository and security shall have the meanings respectively assigned to them in clauses (a), (e) and (l) of sub-section (1) of section 2 of the Depositories Act, 1996.] 14. These provisions will apply only when asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ested in pursuing litigation. Therefore this can be considered as inadvertent mistake committed. The principles laid down by the Hon'ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd., Vs. CIT [348 ITR 306 (SC)] (supra) certainly applies to the facts of the case. Since AO has re-computed the computation by following FIFO method as against the average cost price method adopted by assessee, it cannot be stated that assessee is guilty of furnishing inaccurate particulars. Mere making of a claim by way of wrong method of computation by itself will not amount to furnishing of inaccurate particulars of income and said method claimed in the return of income cannot amount to furnishing inaccurate particulars of income. As already stated, assessee had admitted the mistake it committed in claiming exemption, by filing revised computation and setting off to business loss, on the very first date of hearing itself before the same was noticed by the AO. Therefore, I am of the opinion that assessee has neither furnished inaccurate particulars nor concealed income. In fact it is not the case of Revenue that assessee has concealed any income. Therefore, considering the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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