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2016 (1) TMI 639 - ITAT AMRITSAR

2016 (1) TMI 639 - ITAT AMRITSAR - TMI - Addition on LTCG on which the STT was not paid - penalty u/s 271(1)(c) - whether by claiming an amount representing long term capital gain, on which STT was not paid, as exempt u/s 10(38) the assessee is furnishing inaccurate particulars of his income within the meaning of the provisions of section 271(1)(c) as held by the Authorities below? - Held that:- The Hon'ble Jurisdictional High Court, in "CIT vs. The Shahabad Co-op. Sugar Mills" (2009 (10) TMI 15 .....

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ppellant : Sh. P.N.Arora, Adv. For the Respondent : Sh. Tarsem Lal, DR ORDER Per: A D Jain: This is the assessee's appeal for the assessment year 2008-09 against the confirmation of levy of ₹ 1,38,202/- as concealment penalty. 2. The facts are that the assessee, in his return, had declared income on account of interest, LTCG and STCG. The income so declared was on account of interest and STCG and income on account of LTCG amounting to ₹ 34,98,034/- was claimed exempt, as Security .....

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₹ 12,18,572/- being the LTCG on which the STT was not paid. This amount was held to be taxable u/s 112 of the I.T.Act. An additional tax including surcharge and cess amounting to ₹ 1,38,202/- was levied vide order dated 16.12.2010 passed u/s 143(3) of the Act. 3. In the penalty proceedings, on query, the assessee filed a reply, which has been reproduced in the penalty order. It reads as follows: "That the assessee was given to understand that the said investment being long term .....

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on contumacious conduct and callous indifference to the provisions of law and willful non-compliance of requirements of statute [see 83 ITR 26 (SC)]. That the assessee having declared his income from capital gains, though part of the same become taxable on account of non deduction of STT, there is no willful non-compliance of provisions of law. In view of the above submissions, it is prayed that the assessee's explanation be accepted and penalty proceedings be filed and no penalty levied.&qu .....

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ul neglect. This is not correct to say because the assessee know that on part of its sales, STT was not deducted and the LTCG arising there from was covered u/s 112 of the Act. This also shows the indifference to the provisions of law which the assessee itself admits is a ground for imposition of penalty. The assessee has knowingly claimed exemption on the whole of LTCG. The assessee was required to disclose true and correct particulars of income in his return of income and to work out the corre .....

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bove, penalty amounting to ₹ 1,38,302/- is imposed which is 100% of the tax sought to be evaded." 5. The ld. CIT(A) confirmed the levy of penalty, holding as follows: "I have considered the rival submissions and find that mens rea is not essential for a civil liability of penalty. Penalties under fiscal statues are for breach of civil liabilities and therefore willful concealment is not an essential ingredients for attracting civil liabilities; Union of India and others vs. Dharm .....

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e assessee there is no reasonable explanation for such want of care, infer deliberateness and treat it as a false return (Cement Marketing Company of India Ltd. vs. ACIT Commissioner of Sales Tax and others (SC) 124 ITR 15). There are umpteen number of judgments where bogus claim when detected, have been treated as incorrect particulars of income. Even bogus claim of deduction in returns prepared by auditor had been overruled and penalty upheld. Kutto Karan Machine Tools vs. ACIT (Ker) 313 ITR 4 .....

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ar Pvt. Ltd. vs. ITO, ITAT (Del) 124 ITD 353 3. Assessee claiming deduction u/s 80-O on interest income earned on FD in India - Amounts to furnishing of inaccurate particulars penalty upheld. [ACIT vs. Surinder Pal Chopra ITAT (Del) 2 ITR (Trib.) 790 The appellant has a right to file a revised return, if he discovers any omission of wrong statement in his return before the assessment made. If the time for revising return was not available it could have been done during the assessment proceedings .....

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ds of shares sold amounted to ₹ 38,24,235/-, the purchase consideration was of ₹ 38,36,953/- and the loss to be carried over was of ₹ 12,718/-. It has been contended that the details of these items are contained at APB-6, shown under "short-term loss". It has been pointed out that APB 1 to 2 contain a copy of the written submission dated 16.01.2014 filed before the ld. CIT(A). It has been maintained, as before the Authorities below, that the assessee, in his return of .....

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hat the LTCG of ₹ 12,18,572/- was on account of switching of the securities; that it was, therefore, that no STT was deducted thereon; that the non-deduction of STT was on account of the fact that the assessee had been advised that the said investments, being long term investments, are free of tax; that the investments in question were not sold, but were redeemed by switching over; that the full details of purchase and sale of investments were provided in the return of income filed; that t .....

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eclared his income from capital gains, though part of the same became taxable on account of nondeduction of STT, there was no willful non-compliance of the provisions of law by the assessee. It is only that there was an inadvertent mistake in the return. 7. For the proposition that a wrong claim does not invite penalty, the ld. counsel has sought to place reliance on the following case laws: i) "CIT vs. Reliance Petro Products (P) Ltd.", 322 ITR 158 (SC) ii) "CIT vs. Bal Kishan Dh .....

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y levied qua the amount on which STT was not paid and this was not declared. Reliance has been placed on "CIT vs. Reliance Petro Products (P) Ltd." (supra), to contend that since the AO has correctly reached the conclusion that the assessee has claimed excessive deductions, though knowing this is to be incorrect, it amounted to concealment of income by furnishing inaccurate particulars thereof; that an item of expenditure may be falsely or in an exaggerated amount claimed, which amount .....

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ishing inaccurate particulars of his income within the meaning of the provisions of section 271(1)(c) of the Act, as held by the Authorities below. 9. In this regard, the Hon'ble Supreme Court, in "CIT vs. Reliance Petro Products (P) Ltd." (supra), has held that making an incorrect claim cannot tantamount to furnishing of inaccurate particulars. As per this decision, merely because the assessee claimed a deduction which has not been accepted by the Revenue, penalty u/s 271(1)(c) of .....

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come filed was found to be incorrect or inaccurate. The Hon'ble Supreme Court has held that mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the return cannot amount to inaccurate particulars. In the present case, the assessee has furnished all the details of its expenditure in its return, which details, in themselves, were not found to be inaccurate, nor could b .....

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