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Mr. Ketan V. Parekh Versus The Dy. Commissioner of Income Tax, Central Circle- 40, Mumbai.

2015 (11) TMI 1 - ITAT MUMBAI

Penalty under section 271(1)(c) - addition on 'deemed dividend’ under section 2(22)(e) - Held that:- It is a case where the assessee failed to substantiate its stand about the perception of viewing a particular transaction. A difference in perception about a transaction, in our view, would not constitute furnishing of inaccurate particulars of income within the meaning of section 271(1)(c) of the Act. Notably, a perusal of the assessment order passed by the Assessing Officer under section 143(3) .....

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nless there is a finding that any of the details or particulars supplied by the assessee in its return are found to be incorrect or erroneous or false, it would not invite the penalty under section 271(1)(c) of the Act merely because the claim made in the return of income has been found to be unsustainable. In the present case, factually speaking, the situation is of a varying perception of the nature of transaction which has resulted in application of section 2(22)(e) of the Act, thereby result .....

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see : Shri Rajiv Khandelwal For The Revenue : Dr.P.Daniel, Special Counsel ORDER PER G.S. PANNU,AM: The captioned appeal preferred by the assessee is directed against the impugned order dated 28/02/2007 passed by the CIT(A)-VII, Mumbai, pertaining to the assessment year 2000-01, which in-turn has arisen from the order passed by the ACIT dated 24/12/2010 under section 271(1)(c) of the Income Tax Act, 1961( in short the Act ). 2. In this appeal the sole grievance of the assessee is against the imp .....

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sessed to tax as deemed dividend under section 2(22)(e) of the Act. In this context, brief facts are that the assessee was found to have received a sum of ₹ 7.00 lacs from M/s. Classic Credit Ltd., which was treated by the Assessing Officer as a deemed dividend within the meaning of section 2(22)(e) of the Act. The said addition made by the Assessing Officer has become final, as stated by the Ld. Representative for the assessee before us. 3.1 Subsequently, vide order dated 28/03/2005, the .....

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y the CIT(A) also. Before us, Ld. Representative for the assessee has assailed the stand of the income-tax authorities by pointing out that there was no inaccurate particular filed by the assessee in as much as the assessee claimed that the amount of ₹ 7.00 lacs in question was received from M/s. Classic Credit Ltd., in the regular course of business. As per him, the assessee as well as M/s. Classic Credit Ltd. were in the business of dealing in shares and that the transaction of ₹ 7 .....

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lty under section 271(1)(c) of the Act. 4.1 Emphasizing that there was no deliberate intention to conceal the impugned income, the Ld. Representative for the assessee contended that the assessee and the group companies have declared incomes for assessment year under consideration of substantial amounts and in comparison the impugned sum of ₹ 7.00 lacs was an insignificant figure. Therefore, it could not be said that assessee had had deliberately not treated the impugned sum as an assessabl .....

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ht of the judgment of Hon ble Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd., 322 ITR 158(SC), penalty under section 271(1)(c) was not leviable. 5. On the other hand, Ld. Special Counsel appearing for the Revenue has defended the orders of authorities below for imposition of penalty under section 271(1)(c) of the Act. Ld. Special Counsel appearing for the Revenue pointed out that in the present case the provisions of section 2(22)(e) of the Act were rightly invoked because .....

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of ₹ 7.00 lacs, which is the controversy before us has been held to be an amount assessable as deemed dividend under section 2(22)(e) of the Act. Pertinently, the said amount was found to have been received by the assessee on 27/03/2000 from M/s. Classic Credit Ltd., and in so far as the applicability of section 2(22)(e) qua the said transaction is concerned there is no dispute. No doubt, assessee contended before the income-tax authorities that the other concern i.e. M/s. Classic Credit .....

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stantially interested shall be construed as deemed dividend, subject to the conditions prescribed therein. The claim of the assessee has been that the impugned sum of ₹ 7.00 lacs received from M/s. Classic Credit Ltd. is not in the nature of loan or advance and rather it was a business transaction. The Assessing Officer however, differed with the assessee and according to him assessee could not substantiate that the transaction was falling outside the deeming scope of section 2(22)(e) of t .....

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