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2015 (10) TMI 939 - ITAT PUNE

2015 (10) TMI 939 - ITAT PUNE - TMI - Penalty u/s. 271(1)(c) - wrong claim on the sale of shares - addition of Short Term Capital on sale of shares in the income returned - Held that:- In the present case, we observe that the assessee has not furnished inaccurate particulars with respect to the purchase and sale of shares. The mistake has been committed in computing the capital gain arising from sale of shares. We are of considered view that the mistake is bonafide and unintentional. The Revenue .....

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assessee. - ITA No. 668/PN/2013 - Dated:- 7-9-2015 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM For The Assessee : Shri Sunil Ganoo For The Revenue by : Shri B.C. Malakar ORDER PER VIKAS AWASTHY, JM : The appeal of the assessee is directed against the order of Commissioner of Income Tax (Appeals)-II, Nashik dated 15-01-2013 for the assessment year 2008-09, confirming the levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. The brief facts of th .....

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00/-. Thereafter, the assessee filed revised return of income on 10-12-2008 declaring income of Rs.(-)4,36,289/- and agricultural income ₹ 8,05,024/-. In the return of income the assessee had also disclosed income from Long/Short Term Capital Gain/Loss, arising from sale of shares, Future and Options. The case of the assessee was selected for scrutiny. Accordingly, notice u/s. 143(2) was issued to the assessee on 26-09- 2009. During the period relevant to the assessment year 2008-09, the a .....

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m Capital on sale of shares in the income returned. The Assessing Officer also initiated penalty proceedings u/s. 271(1)(c) for furnishing inaccurate particulars of income. The Assessing Officer vide order dated 29-06-2011 levied penalty of ₹ 67,170/- u/s. 271(1)(c) of the Act. Aggrieved by the order levying penalty, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) dismissed the appeal of the assessee and confirmed t .....

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ed out this error during assessment proceedings to the Assessing Officer vide letter, the copy of which is at page 72 of the paper book. The Assessing Officer without mentioning the fact that the mistake has been pointed out by the assessee himself made addition, which was accepted by the assessee. During the proceedings before the Commissioner of Income Tax (Appeals), the assessee in his statement of facts had categorically mentioned about the letter highlighting the mistake. In penalty proceed .....

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ins and as such it is not a case of furnishing inaccurate particulars. The ld. AR of the assessee prayed for setting aside the impugned order and deleting the penalty. In support of the submissions, reliance was placed on the following case laws: i. CIT Vs. Miles Cable Industries, 261 ITR 675 (Guj); ii. Udayan Mukherjee Vs. CIT, 291 ITR 318 (Cal); iii. CIT Vs. Umashankar Saraf, 139 ITR 842 (Bom); iv. CIT Vs. Reliance Petroproducts Pvt. Ltd., 322 ITR 158 (SC); and v. Price Waterhouse Coopers Pvt. .....

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rly shows that it was deliberate act of assessee to suppress the income by furnishing inaccurate particulars of income. The ld. DR vehemently supported the findings of Commissioner of Income Tax (Appeals) in confirming the levy of penalty and prayed for dismissing the appeal of the assessee. 5. We have heard the submissions made by the representatives of rival sides and have perused the orders of the authorities below. Penalty u/s. 271(1)(c) has been levied on assessee for making wrong claim on .....

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Short Term as well as Long Term Capital Gain/Loss on the sale of shares. It is in respect of shares of M/s. Jain Irrigation Systems Ltd. that were held for a period of less than 12 months, the assessee treated the gain arising thereon as Long Term Capital Gain and exempt from tax u/s. 10(38) of the Act. The assessee had furnished the details of shares transacted along with the dates of purchase/sale with the return of income. No mistake or error has been pointed out by the Revenue in the said in .....

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urnished by assessee are correct. The assessee has only erred in computing capital gain from sale of shares. 6. The Hon'ble Calcutta High Court in the case of Udayan Mukherjee Vs. CIT (supra) has held that there is a distinction between furnishing of wrong particulars and making a wrong calculation on the basis of the particulars furnished. If the particulars are furnished then there cannot be any question of concealment. A mistaken calculation is distinct from concealment. A mistaken indexa .....

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f, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. The relevant extract of the judgment is as under: 8. A glance at this provision would suggest that in order to be covered, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The present is not a case of concealment .....

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e meaning of the details of the claim made. It is an admitted position in the present case that no information given in the return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The learned counsel argued that "submitting an incorrect claim in law for the expenditure on interest would amount to giving .....

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ame provision, the court observed that the Assessing Officer has to be satisfied that a person has concealed the particulars of his income or furnished inaccurate particulars of such income. This court referred to another decision of this court in Union of India Vs. Dharamendra Textile Processors [2008) 13 SCC 369 as also, the decision in Union of India Vs. Rajasthan Spg. & Wvg. Mills [2009) 13 SCC 448 and reiterated in paragraph 13 that (page 13 of 317 ITR): "13. It goes without saying .....

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int CIT [2007) 6 SCC 329, this court explained the terms "concealment of income" and "furnishing inaccurate particulars". The court went on to hold therein that in order to attract the penalty under section 271(1)(c), mens rea was necessary, as according to the court, the word "inaccurate" signified a deliberate act or omission on behalf of the assessee. It went on to hold that clause (iii) of section 271(1)(c) provided for a discretionary jurisdiction upon the asse .....

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Officer must be found to have failed to prove that his explanation is not only not bona fide but all the facts relating to the same and material to the computation of his income were not disclosed by him. It was then held that the explanation must be preceded by a finding as to how and in what manner, the assessee had furnished the particulars of his income. The court ultimately went on to hold that the element of mens rea was essential. It was only on the point of mens rea that the judgment in .....

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