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2015 (10) TMI 1704 - ITAT DELHI

2015 (10) TMI 1704 - ITAT DELHI - TMI - Penalty u/s 271(1)(c) - treating part of income from sale of shares as business income instead of capital gains by the assessee - CIT(A) deleted the penalty - Held that:- The bifurcation of the short term capital gain and treating the transaction as investment in the cases where the holding period of more than 30 days and as business transaction in the case where the holding period is less than 30 day, in our considered opinion, is not justified on the par .....

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nder the head “capital gains”. From the above findings of Hon’ble Tribunal we find that assessee has been granted relief in this respect and therefore the penalty imposed by AO does not survive. - Decided in favour of assessee. - ITA No: 736/Del/2012 - Dated:- 1-9-2015 - SHRI T.S. KAPOOR AND SMT BEENA A PILLAI, JJ. For The Appellant : Smt. Parvinder Kaur, Sr. DR For The Respondent :Shri Santosh K Aggarwal, Advocate ORDER PER T.S. KAPOOR, ACCOUNTANT MEMBER This is an appeal filed by the revenue a .....

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d. DR though supported the order of AO fairly acceded that this has been deleted by Hon ble Tribunal. 2. We have heard rival submissions and have gone through the material available on record. We find that the penalty u/s 271(1)(c) was imposed by the AO as he treated part of income from sale of shares as business income instead of capital gains by the assessee. In this respect relevant part of AO imposing penalty are reproduced below :- After concluding the order u/s 143(3) of the Act, the AO in .....

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.04.2010 (Appeal No. 342/08-09), has partly allowed the appeal of the assessee, and held that ₹ 36,09,941/- earned by the assessee on account of sales of shares is business income, and thus confirmed the addition made by the AO at least up to this extent. The relevant extract of the decision of the Ld. CIT(A) on this very issue is reproduced below.- "I am of the view that it cannot be said in respect of sale of shares made within a short period of 30 days of purchase of shares that th .....

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s income. Accordingly, I accept the contention of the appellant to the extent of short term capital gain of ₹ 1,39,41,555/- and hold that amount of ₹ 36,09,941/- in the nature of business income. After receiving the order of the Ld CIT(A) on 04.05.2010, the undersigned, once again, issued a show cause notice u/ s 271(1)(c) of the Income Tax Act, 1961 (dated 08.09.2010) , and asked why penalty should not be imposed in your case with request to attend my office on20.09.2010 at 11.30 a. .....

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ssessee is reproduced below :- "It shall further be appreciated that it is a case where income of short term capital gain treated as Business Income; which have very less magnitude of transactions during the assessment year and genuine expenses were claimed under the bona fide belief that they are allowable which were disallowed by your honour. There is neither any concealment nor any inaccurate particulars of any income. All the facts are on record and were disclosed suo motto. It is submi .....

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ply of the assessee was well considered, but found that it has no force because holding the addition made by the AO up to the extent of ₹ 36,09,941/ - by the Ld CIT(A) is clear cut evidence of concealment on the part of the assessee. Besides this, it is also noted that initially the assessee did not offer even such amount as its Business Income, it was AO who arduously made it possible. Then, the contention of the assessee .that it is neither concealment nor furnishing inaccurate particula .....

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lty leviable u/ s 271(1)(c) of the IT Act works out to ₹ 10,82,982/- and ₹ 32,48,946/ - respectively. I am, therefore, levy a penalty of ₹ 10,82,982/- u/s 271(1) (c) of the Income Tax Act , 1961, which is calculated hereunder: Income sought to be evaded ₹ 36,09,941/- Tax on income sought to be evaded Rs.10,82,982/- Minimum penalty @ 100% of tax ₹ 10,82,982/- Maximum penalty @ 300% of tax ₹ 32,48,946/- 3. We find that the Hon ble Tribunal vide its order dated 1 .....

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