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DDIT, Circle-1 (1) , International Taxation, New Delhi Versus Naga Rama Prasad Bonda

2015 (9) TMI 1292 - ITAT DELHI

Penalty levied by the AO u/s 271(1)(c) - CIT(A) deleted the levy - revision of computation of income - Held that:- In the present case, it is an admitted fact that the assessee wrongly computed the short term capital gain to be carried forward due to some wrong formula entered into computation sheet used to work out the short term/long term capital gains / loss and when the mistake came to his notice, the assessee corrected the figures and filed the revised details of short term capital loss bef .....

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computation and paid the due tax on the income of the succeeding years because the claim of carried forward of short term capital loss had affected the future tax liability. See Price Water House Coopers (P.) Ltd., [2012 (9) TMI 775 - SUPREME COURT]

Thus we hold that no penalty is leviable in the facts and circumstances of the case under Section 271(1)(c) of the Act. Hence, the appeal filed by the assessee is allowed in full. - Decided in favour of assessee. - ITA No. 45/Del./2014 - D .....

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eturn of income on 30.07.2009 declaring nil income and claiming short term capital loss of ₹ 62,09,653/- to be carried forward. However, in the assessment framed u/s 143(3) of the Act vide order dated 22.12.2011, the AO allowed short term capital loss of ₹ 30,27,277/- to be carried forward. The assessee did not preferred any appeal against the said assessment order thereafter the AO levied a penalty of ₹ 8,58,653/- u/s 271(1)(c) of the Act. 4. Being aggrieved the assessee carri .....

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that when the notice u/s 143(2) was received, the assessee came to know of the mistake and filed the revised details of short term capital loss before the AO vide letter dated 24.10.2011. It was also stated that the assessee filed a revised return of income declaring thereon figure of short term capital loss at ₹ 30,27,277/- but the AO treated the revised return as non-est as it was filed beyond the time available u/s 139(5) of the Act but assessed the short term capital loss to be carried .....

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loss. It was further submitted that the aforesaid act of the assessee was the proof of bonafide of the assessee and what else could he do, to undo the mistake, other than rectifying all the matters related thereto and pay the taxes which was only way open to the assessee to show his regret for the mistake. The reliance was placed on the judgement of the Hon ble Supreme Court in the case of CIT vs. Reliance Petro Products and of the Hon ble Delhi High Court in the case of CIT vs. Dharampal Premch .....

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1 from the AO vide which he was required to give details regarding his claim of capital loss. In response to this questionnaire, the appellant filed a reply before AO vide letter dated 24.10.2011 that return for subject AY has been revised on 19.10.2011 in which claim of short term capital loss has revised to ₹ 30,27,277/-. The AO held that revised return is non-est being beyond prescribed time limit u/s 139(5). However, the AO accepted the revised figure of short term capital loss in the .....

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by taking help from staff in Morocco. The computation of capital gain / loss was done using XL sheet and because of some wrong formula entered into XL sheet, a portion of long term capital los was picked up as short term capital loss. The appellant further submitted that when he received questionnaire wherein routine details about claim of short term capital loss were asked for, working of capital loss was again rechecked and mistake was detected. Perusal of questionnaire issued by the AO revea .....

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ant in his revised return, though rejected as non-est by the AO. The appellant has furnished both copies of working of capital loss, explaining how the mistake got crept in. There is force in argument of the appellant since there was short term capital loss in both original and revised computation and there was no tax liability, there could not be any intention on the part of the appellant to furnish wrong particulars of his income. The claim of carry forward of short term capital loss would hav .....

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1 does not apply as the appellant has been able to substantiate his explanation and also could prove that explanation is bonafide. 5.4 The word conceal has been derived from the Latin word concelare which implies to hide . It is however implicit in the word concealed that there has been a deliberate act on the part of the assessee. It is established principle of law that assessment and penalty proceedings are entirely different & independent and standard of evidence which may be good for as .....

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t case. Accordingly the impugned penalty order u/s 271(1)(c) is quashed. The AO is directed to grant relief accordingly. The grounds of appeal are disposed of accordingly. Now the department is in appeal. 6. The ld. DR strongly supported the order of the AO and reiterated the observations made in the assessment order it was further stated that the assessee disclosed wrong figure of capital loss to be carried forward and as such concealed the income by disclosing the wrong facts, therefore, the A .....

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fully gone through the material available on record. In the present case, it is an admitted fact that the assessee wrongly computed the short term capital gain to be carried forward due to some wrong formula entered into computation sheet used to work out the short term/long term capital gains / loss and when the mistake came to his notice, the assessee corrected the figures and filed the revised details of short term capital loss before the AO vide letter dated 24.10.2011, much before the compl .....

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ng years because the claim of carried forward of short term capital loss had affected the future tax liability. On a similar issue the Hon ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd. vs. CIT, 348 ITR 306 has held as under :- Allowing the appeal, that the facts of the case were peculiar and somewhat unique. Notwithstanding that the assessee was a reputed firm and had great expertise available with it, it was possible that even the assessee could make a silly mistake. The f .....

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