TMI Blog2016 (12) TMI 1139X X X X Extracts X X X X X X X X Extracts X X X X ..... ide explanation which takes it out of provisions of Section 271(1)(c) read with explanation 1 to Section 271(1)(c) of the Act. Merely because a claim is made by the assessee which is not accepted by the AO to be sustainable in law penalty is not leviable automatically more so when all the details were duly furnished by the assessee in the return of income filed with the Revenue and the particulars of income filed by the assessee were not inaccurate. - Decided against assessee. - I .T.A. No.5834/Mum/2013 - - - Dated:- 24-10-2016 - SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : Shri Vijay Kothari For The Revenue : Shri Vishwas Jadhav (D.R.) ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the assessee, being ITA No. 5834/Mum/2013, is directed against the appellate order dated 28th August, 2013 passed by learned Commissioner of Income Tax (Appeals)- 32, Mumbai (hereinafter called the CIT(A) ), for the assessment year 2009-10, the appellate proceedings before the learned CIT(A) arising from the order of penalty dated 29th May. 2012 passed by the learned Assessing Officer (hereinafter called the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income in the return of income filed with the Revenue. The A.O. held that the assessee has wrongly claimed exemption of ₹ 3,95,769/- u/s 10(38) of the Act in the return of income filed with the Revenue , whereby exemption from tax u/s 10(38) of the Act was claimed with respect to Long Term capital gains on sale of shares on which STT was not paid and hence, the assessee is liable for penalty u/s 271(1)(c) of the Act and taking a lenient view, the A.O. levied minimum penalty @ 100% of the tax sought to be evaded of ₹ 81,030/-, vide order of penalty dated 29.05.2012 passed u/s 271(1)(c ) of the Act by the AO. 4. Aggrieved by the penalty order dated 29.05.2012 passed by the A.O. u/s. 271(1)(c) of the Act, the assessee filed her first appeal before the ld. CIT(A). 4. Before the ld. CIT(A) the assessee submitted that rectification application u/s 154 of the Act was filed before the A.O. wherein it was contended that as per proviso to section 112(1) of the Act capital gains earned by the assessee would be chargeable to tax @ 10% as against tax charged @ 20% by the A.O. and further the A.O. has not considered the cost of acquisition in respect of such 537 shares of Ranba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,769/- which was held for more than one year. Sale proceeds were received by the assessee under the buyback scheme whereby no STT was paid. The ld. Counsel submitted that it was an inadvertent mistake and during the course of assessment proceedings the assessee surrendered the amount and declared that the long term capital gain is not exempt from tax u/s 10(38) of the Act. Due taxes along with applicable interest have been paid. The ld. Counsel submitted that the rate of taxation is 10% and not 20% as charged by the AO . Without prejudice, it was submitted that the penalty levied should be reduced. The ld. Counsel has relied on the following decisions:- 1. Doral Trading Pvt. Ltd. v DCIT (ITA 6280/M/2011) dated 26.2.2013: 2. Virtuous Capital Limited v ACIT (ITA 5647/M/2013) dated 19.11.2015: 3. Asia Attractive Dividend Stock Fund v DDI (International Tax) (ITA 3908/M/2012) dated 28.9.2012: 4. Shri Vikramaditya Singh v DCIT (ITA 188/Asr/2014) dated 16.11.2015: 5. ACIT v Amit Bajaj (ITA 7707/M/2010) dated 3.8.2012: 6. Asia Management Consultancy Pvt: Ltd. v ACIT (ITA 1916/M/2010) dated 13.4.2011: 7. Price Waterhouse Coopers P. Ltd. v CIT 348 ITR 306 (SC) 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dividend Stock Fund v. DDIT in ITA no. 3908/Mum/2012 wherein the facts were identical to the facts of the assessee in ITA no 3908/Mum/2012 which decision of Asia Attractive dividend Stock fund (supra) was approved by Hon ble Bombay High court in (2013) 35 taxmann.com 265(Bom.) in DIT v. Asia Attractive Dividend Stock Fund, and also decision in the case of Virtuous Capital Limited v ACIT (ITA 5647/M/2013) vide orders dated 19.11.2015 are clearly applicable in this case. The decision of the Tribunal in ITA no 5647/Mum/2013 has duly considered the various case laws relied upon by learned DR . The Hon ble Bombay High Court in the case of DIT v. Asia Attractive Dividend Stock Fund (2013) 35 taxmann.com 265(Bom.) held as under: 2. In this appeal by the Revenue for assessment year 2008-09, although several questions have been formulated in the memo of appeal, the basic dispute is whether the Tribunal was justified in deleting the penalty under Section 271(1)(c) of the Income Tax Act, 1961 levied upon the respondent - assessee by the assessing officer. 3. The respondent - assessee had originally filed its return of income claiming a refund of ₹ 4.32 crores. This was on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on sale of shares. It is an inadvertent bona-fide mistake and as such the penalty is not sustainable in the eye of law and the same is hereby ordered to be deleted as the assessee has come forward with an explanation which is a bona-fide explanation which takes it out of provisions of Section 271(1)(c) read with explanation 1 to Section 271(1)(c) of the Act. Merely because a claim is made by the assessee which is not accepted by the AO to be sustainable in law penalty is not leviable automatically more so when all the details were duly furnished by the assessee in the return of income filed with the Revenue and the particulars of income filed by the assessee were not inaccurate. The assessee has rightly placed reliance on decision of Hon ble Supreme Court in the case of CIT v. Reliance Petroproducts Private Limited (2010) 322 ITR 158(SC) and decision of Hon ble Supreme Court in the case of Price Waterhouse Coopers Private Limited(supra). Hence, in view of our foregoing detailed discussions and reasoning, we order deletion of penalty of ₹ 81,030/- levied on the assessee by the AO u/s 271(1)(c) of the Act which was sustained by learned CIT(A) in the first appeal by setting a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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