TMI Blog2010 (3) TMI 1122X X X X Extracts X X X X X X X X Extracts X X X X ..... /2008 of Rishi R. Oswal (HUF) is considered in detail. 2. The assessee filed return of income declaring total income of ₹ 29,14,798/- on 18.08.2004. The assessee has claimed long term capital gain and short term capital gain in the computation of income with other sources. The A.O. noticed that the assessee has declared long term capital gain of ₹ 28,85,208 on sale of 45,000 shares of M/s. Talent Infoway Ltd. Assessee was asked to furnish copies of broker s note in respect of purchase and sale of shares alongwith other details. The assessee has furnished necessary details. It was noticed by the A.O. that the assessee has purchased and sold shares through M/s. Goldstar Finvest Pvt. Ltd. and the broker was a dealer of Inter Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. All the investment shown by the assessee was a part of prestructured device to claim artificial capital gain to avoid the payment of the taxes. Sensing the heat of the investigation, the assessee has surrendered the amount for taxation during the course of assessment proceedings. After the detection of the issue, the assessee changed her stand by changing the head of income by filing the revised statement of her total income and requested not to initiate penalty proceedings u/s 271(1)(c). This clearly shows that if, the A.O. had not investigated the transactions of purchase and sales of shares shown by the assessee, the assessee would have paid lesser amount of tax and would have gone scott-free. It is only after the A.O. investigate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were carried out by the AO. From the assessment order also it can be gathered that it was only on account of the investigations undertaking by the AO and the facts emerged thereafter regarding the non genuineness of the broker and the share transactions, that the appellant filed a revised statement of income. It is also pertinent to note that the rate of taxation of long term capital gains were lower than that of income from other sources. The most important fact which need to be appreciated in this case is the intention of the appellant to manipulate the transactions in shares and use it to generate income under the head long term capital gains, whereas the actual income was from other sources . It is clearly established that the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they have surrendered the amount of entire long term capital gains and offered as income. It was his contention that the assessee in fact purchased 45,000 shares in April/May 2002 for a consideration of ₹ 47,232/- and paid the amount by way of cheque and sold all the shares through the broker from 04.12.203 to 27.03.2004 on various days in various slots for ₹ 29,32,440/- thereby gaining ₹ 28,85,208/-. It was his submission that the transactions are not bogus and necessary evidences by way of bank statements were furnished to the A.O. It is also on record that the said Goldstar Finvest Pvt. Ltd. has confirmed the transaction to the A.O. vide their letter which was acknowledged by the A.O. in the assessment order itself. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a single transaction of sale but a series of transactions of sales of 5,000 each happened from December 2003 to March 2004, over a period of three months, and the assessee has received the consideration in the bank account by way of cheques from the said broker. It is not the case of the A.O. that both the purchase and sale are bogus. The only enquiry made by the A.O. was whether the transactions are recorded in the Stock Exchange. The Stock Exchange has informed that the transactions are not recorded there. It is not verified by the A.O. whether the transactions are off market transactions or through the Stock Exchange. No further enquiry was made. Eventhough the stock broker has confirmed the transactions the A.O. has not made any furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bonafide and penalty is not leviable. Eventhough the learned counsel referred to various principles and case law, those need not be considerd here as the facts are similar to the facts in the case of CIT vs. Suresh Chandra Mittal 251 ITR 9 (SC).The Hon'ble Supreme Court in the above said case has held as under: - Penalty under s. 271(1)(c) Concealment Revised return filed showing higher income Assessee surrendered the income after persistent queries by AO However, revised returns have been regularised by Revenue Explanation of the assessee that he has declared additional income to by peace and to come out of vexed litigation could be treated as bona fide Penalty rightly cancelled No interference warrantd. 8. Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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