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Income Tax Officer, Ward 8 (4) , Ahmedabad Versus M/s. Vraj Services Pvt. Ltd.,

2016 (5) TMI 1092 - ITAT AHMEDABAD

Penalty u/s 271(1)(c) - concealment of income of Short Term Capital Gain - Held that:- Respectfully relying on the decisions of Hon’ble Apex Court in the case of Price Waterhouse Coopers Pvt Ltd (2012 (9) TMI 775 - SUPREME COURT ) and T. Ashok Pai (2007 (5) TMI 199 - SUPREME Court ), we are of the view that as the purchases and sale transactions were duly reflected in the investment account shown by the assessee in its balance-sheet, but due to inadvertent error, the assessee while submitting it .....

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nish Borad, Accountant Member: The Revenue is in appeal before us against the order of ld. Commissioner Income-Tax (Appeals)-XIV, Ahmedabad in Appeal No. CIT(A)XIV/Wd.8(4) /48/2011-12 , dated 20.04.2012, passed for Assessment Year 2008-09. Penalty u/s 271(1)(c) was framed for Assessment Year 2008-09 on 23.06.2011 by Income Tax Officer, Ward-8(4), Ahmedabad. The Revenue has raised following grounds of appeal:- 1. The ld. Commissioner of Income-tax (Appeals)-XIV, Ahmedabad has erred in law and on .....

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that the assessee is a Private Limited Investment Company and the return of income for Assessment Year 2008-09 was filed on 13.06.2009 declaring total income at Rs.NIL after claiming carried forward of unabsorbed loss of ₹ 25,35,103/-. During the course of assessment proceedings, the assessee was confronted with regard to AIR information available with the Assessing Officer relating to purchase and sale of shares of REI Agro Limited and it was revealed that profit on purchase and sale of .....

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- was confirmed. No appeal was preferred before the Tribunal against the order of the ld. CIT(A). Thereafter, penalty order u/s 271(1)(c) was framed on 23.06.2011, imposing penalty of ₹ 15,24,180/- for concealment of income of ₹ 1,34,52,600/-. The assessee went in appeal against the order u/s 271(1)(c) of the Act before the ld. CIT(A) who allowed the appeal of the assessee by deleting the penalty levied u/s 271(1)(c) of the Act, by observing as under:- I have carefully considered the .....

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ing in demat account and adjusted the sale consideration against the outstanding. The appellant, thereafter, credited the investment account and debited the brokers account and finalized the entry and books of accounts. The books of account were subsequently audited and the auditor's also could not detect the capital gain. However, during the course of scrutiny, when the demat account was analysed it came to its knowledge and immediately the tax was paid. In view of the above facts, I am inc .....

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res were already there before the A. O. and appellant has himself given the copy of demat account to the A. O. during the course of assessment proceedings. These events prove the reasonable cause of the appellant. Therefore, the penalty A. O. is directed to be deleted. The ground of appeal is, therefore, allowed. 3. Aggrieved the Revenue is now in appeal before the Tribunal. 4. The ld. Departmental Representative supported the order of the ld. Assessing Officer. 5. On the other hand, ld. Authori .....

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377; 9.80 crores and adjusted the outstanding. The ld. Authorized Representative further submitted that on the basis of information received from broker about the sale and adjustment in outstanding account, the appellant credited the investment account and debited broker s account for ₹ 9.80 crores which has been confirmed by the broker. In the process, gain arising on sale of shares was camouflaged in the investment account of shares and inadvertently & unintentionally this gain was n .....

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assessment, and only on the basis of these details the Assessing Officer could dig out profit on sale of shares, which was camouflaged in investment account, since the shares were sold by the broker to realise outstanding dues admittedly under intimation to appellant but profit was not visualized since the investment end outstanding were adjusted against each other. He also submitted that the assessee did not come to know about the profit on sale of shares as there was huge payment to be made t .....

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ails viz. Copy of demat account, details of purchase and sales of shares, asked by the assessing officer were submitted immediately and on submission these details only the Assessing Officer has pointed out profit on sale of shares, when it was surfaced, immediately it was accepted and tax was paid on same without any argument or hesitation. The ld. Authorized Representative also submitted that a duly sworn affidavit of Managing Director declaring facts on oath was also submitted before the Ld. .....

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he penalty levied. 6. We have heard the rival contentions and perused the material on record. The only issue in this appeal of the Revenue is against the action of ld. CIT(A) in deleting the penalty of ₹ 15,24,180/- levied u/s 271(1)(c) of the Act for concealment of income of Short Term Capital Gain of ₹ 1,34,52,600/-. From going through the assessment and appellate proceedings in relation to quantum as well as penalty, we are able to observe that the Short Term Capital Gain of ͅ .....

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not shown in the return of income under the head Capital Gains ; but, certainly the transactions were appearing in the regular books of accounts of the assessee. 7. We further observe that Hon ble Apex Court in the case of Price Waterhouse Coopers Pvt Ltd (supra) has held that no penalty can be levied u/s 271(1)(c) for bonafide, inadvertent mistake, human error and further held that all that has happened in the present case is that through bona fide and inadvertent error, the assessee while sub .....

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