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2016 (8) TMI 653 - ITAT MUMBAI

2016 (8) TMI 653 - ITAT MUMBAI - TMI - Levy of penalty u/s 271 (1) (c) - wrong claim of set off of loss of father - loss on account of earlier year’s long term capital gains or short term capital gains - Held that:- We find from the records that the penalty is levied on wrong claim of set off of earlier year’s long term capital gains or short term capital gains, which is a genuine claim but claimed under wrong understanding that henceforth assessee has to claim these losses instead of father of .....

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h the assessee as well as her father are under same tax bracket/slab of tax as is evident from the above chart. - Hence we are of the view that this penalty levied u/s 271(1)(c) of the Act cannot sustain and hence, the same is deleted for both the years - ITA No.6195 & 1686/Mum/2006 - Dated:- 17-6-2016 - SRI MAHAVIR SINGH, JM AND SRI RAMIT KOCHAR, AM For The Appellant : Shri Girish Dave, Ms. Kadambari Dave, ARs For The Respondent : Shri S. C. Tiwari, DR ORDER PER MAHAVIR SINGH, JM: Out of th .....

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f the assessee in ITA No.1686/Mum/2011 is arising out of the order of the learned CIT (A)-26, Mumbai passed in appeal No.CIT (A)-26/IT-113/15(2) (2)/08-09 dated 16-12-2010. In this case, assessment was framed by the ITO, Ward-15(2) (2), Mumbai for assessment year 2005-06 vide his order dated 17-09-2007 u/s 143 (3) of the Act. Penalty under dispute was levied by the ITO, Ward-15(2) (2), Mumbai u/s 271 (1) (c) of the Act vide order dated 12-02-2009. 3. The only issue in the assessee s appeal in IT .....

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ate to the assessment years in which the income of the appellant was clubbed with the income of the father . 4. Briefly stated, the facts of the case are that the assessee is a resident individual and her sources of income are capital gains on sale of mutual fund units and income from other sources, which includes bank interest on savings bank account and fixed deposits in banks. The assessee in her return of income for assessment year 2004-05 declared long term capital gains and short term capi .....

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d the claim of Long Term Capital loss as well as Short Term Capital Loss brought forwarded on the reason that the assessee is not entitled for claim of Long Term Capital Loss or Short Term Capital Loss because earlier years capital losses which were shown in the return of her father by virtue of clubbing provisions u/s 64(1A) of the Act. Accordingly, he disallowed the claim of Long Term Capital Loss or Short Term Capital Loss which has been arisen in assessment year 2002-03 and 2000-2001 respect .....

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of set off of earlier years long term capital loss. The assessee by her letter dt. 18/11/2008 has submitted various Supreme Court and Hon ble High Court judgments on various issues of penalty u/s. 271 (1) (c). I have gone through of these case laws but I find that these case laws are totally different and have no relevance to the issues involved in the present case. The assessee belongs to the family who is the owner of Parle Group of Industries where reputed CAs and Tax Consultants are doing th .....

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s appellate order by observing as under:- 5. It is seen that during this year also, all the facts and submissions of the appellant are same. The Ld. AR has not been able to put forward any reason against the very well considered logical decision of my predecessor sustaining the penalty in A. Y. 2005-06. I also endorsed his decision as I do not find any valid reason to differ from it. On facts, it is a case, where the appellant has not disclosed complete and correct particulars of income. The ass .....

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. Aggrieved by the order of CIT (A), now the assessee is in second appeal before the Tribunal. 6. We have heard the rival contentions and gone through the facts and circumstances of the case. Before us, the learned Counsel for the assessee Shri Girish Dave, Sr. Counsel first of all stated that the assessee is born on 26-07-1984 and by virtue of which she filed her first return of income for assessment year 2003-04, when she became major. According to him, prior to assessment year 2003-04 she be .....

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s of the above, learned Counsel for the assessee stated that, from the above chart it is clear that assessee s father Shri Raj Kantilal Chauhan has not claimed any brought forward loss on account of long term capital gain or short term capital gain in the AY under consideration. He explained that the income of both the assessee as well as her father is in same tax bracket/slab and cannot be said that there is revenue loss rather assessee s case is totally revenue neutral. According to him, the a .....

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s penalty order and the penalty is levied on wrong claim of set off of earlier year s long term capital gains or short term capital gains, which is a genuine claim but claimed under wrong understanding that henceforth assessee has to claim these losses instead of father of the assessee in whose hands assessee s income used to be clubbed prior to earlier assessment year 2003-04. He also explained that the assessee being owner of Parle Group of Industries but was not aware of the claim of loss bec .....

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assessee requested for deleting the penalty. He also stated that similar are the facts in ITA NO.1686/Mum/2011 for assessment year 2005-06 of assessee s appeal. 7. On query from the Bench, the learned SR. DR only relied on the orders of the lower authorities and stated that this addition has been confirmed by the Tribunal and accepted by the assessee. According to him, it is a fit case for levy of penalty u/s 271 (1) (c) of the Act. 8. We have heard the rival contentions and gone through the fa .....

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n respect to claim of loss on both the counts i.e. long term capital gains and short term capital gains and there is neither concealment nor furnishing of inaccurate particulars of income as alleged by the authorities below. We find from the records that the penalty is levied on wrong claim of set off of earlier year s long term capital gains or short term capital gains, which is a genuine claim but claimed under wrong understanding that henceforth assessee has to claim these losses instead of f .....

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that both the assessee as well as her father are under same tax bracket/slab of tax as is evident from the above chart. We find support to the arguments of Ld. Counsel , wherein he referred to the decision of the Hon ble Bombay High Court in the case of CIT Vs Nalin P. Shah (HUF) [(2013) 40 Taxmann.com 86 (Bombay)] wherein almost on similar facts the Hon ble High Court confirmed the order of the Tribunal deleting the penalty by observing as under:- 4. In this case, the respondent-assessee had d .....

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