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Rajnish Thakur Versus ACIT, Circle-V, Ludhiana

2016 (6) TMI 1221 - ITAT CHANDIGARH

Levy of penalty under section 271(1)(c) - furnishing of inaccurate particulars of income - Held that:- Since assessee disclosed complete facts in the return of income as well as at the assessment stage and all the transactions are carried out through D-Mat Account and banking channel, therefore, it may not a case of furnishing of inaccurate particulars of income so as to levy the penalty against the assessee. The decisions relied upon by ld. counsel for the assessee also support the case of the .....

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e income from other sources, but the facts clearly disclose that it is not a fit case of levy of penalty under section 271(1)(c) of the Act for furnishing inaccurate particulars of income. - Decided in favour of assessee. - ITA No. 697/Chd/2015 - Dated:- 17-6-2016 - Bhavnesh Saini (Judicial Member) For the Appellant : Sudhir Sehgal For the Respondent : S. K. Mittal, DR ORDER This appeal by assessee has been directed against the order of ld. CIT(Appeals)-2 Ludhiana dated 02.03.2015 for assessment .....

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ld. CIT(Appeals)-2 Ludhiana who vide order dated 31.03.2010 upheld the addition of ₹ 11,25,000/- made by Assessing Officer on the issue of treating capital gain on purchase and sale of shares as undisclosed income from other sources. The Assessing Officer issued penalty notice under section 271(1)(c) of the Act. The assessee submitted a reply before Assessing Officer that there is no concealment of income or furnishing of inaccurate particulars of income. During the year, assessee was hav .....

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ng term capital gain in view of the facts discussed in the assessment order and as a result of enquiries made from various Stock Exchanges, Registrar of Companies and various banks, through which cheques have been cleared. The Assessing Officer observed that assessee failed to produce evidence to substantiate the purchase of shares from different companies and also the share brokers failed to produce books of account and original vouchers and supporting documents of purchase/sale of shares sold .....

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the period from 01.04.2001 to 31.03.2003. Therefore, shares in question were not traded through any Stock Exchange. The assessee also failed to give evidence of whether these shares were traded on any other recognized Stock Exchange. The brokers have also not produced their books of account. The Assessing Officer noted that addition has been confirmed by ld. CIT(Appeals) on merit. Even during the course of penalty proceedings, assessee could not furnish any evidence of trading the sale of shares .....

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The assessee challenged the penalty order before ld. CIT(Appeals) and detailed submissions of the assessee are reproduced in the impugned order in which the assessee reiterated the same facts submitted before Assessing Officer and also submitted that assessee had already declared capital gains in the return of income and paid tax @ 10%. The transactions have been disclosed in the return of income as well as at the assessment stage. Full facts have been disclosed and all transactions are carried .....

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pies of the accounts of the brokers alongwith copies of the bills, their PAN number etc. have been filed. The assessee had been maintaining D-Mat Account from where there is documentary evidence in respect of such purchase and sale of shares. Copy of the D-Mat Account and details thereof are reproduced in the assessment order. The Assessing Officer made enquiries from Ludhiana Stock Exchange and maintenance of D-Mat Account by assessee which have been duly confirmed. Existence of the share broke .....

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ccommodation entries claiming the income as long term capital gain. The assessee furnished wrong particulars in the return of income. The enquiries conducted through Stock Exchange clearly revealed that these shares were not purchased or sold through Stock Exchange, therefore, it is a fit case of furnishing inaccurate particulars of income and accordingly, penalty order was confirmed and appeal of the assessee has been dismissed. 6. The ld. counsel for the assessee reiterated the submissions mad .....

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ificate of shares transfer. PB-16 to 18 are evidence of listed shares alongwith rate in the Stock Exchange of Ahmedabad. The ld. counsel for the assessee, therefore, submitted that assessee disclosed all the particulars of sale of shares in the computation of income and in the return of income. The transactions are carried through banking channel and through D-Mat Account, only head of income has been changed by Assessing Officer to charge more tax. Therefore, it is not a case of furnishing inac .....

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'ble Supreme Court in the case of CIT Vs Reliance Petroproducts P.Ltd. 322 ITR 158 in which it was held as under : Merely because the assessee claimed deduct/on of interest expenditure which has not been accepted by the Revenue, penalty under s. 271(l)(c) is not attracted; 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. ii) Decision of Hon'ble Punjab & Haryana High Court i .....

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nder: Apart from the fact that there are concurrent findings of two authorities below, the case of the assessee merits acceptance. On a perusal of the records of the case it is found that the assessee had made a full disclosure of all the facts as required by the Revenue and there was no question of any inaccurate particulars having been furnished by the assessee with a view to gaining any advantage. Consequently, no substantial question of law arises. 6(i) On the other hand, ld. DR relied upon .....

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penalty proceedings. 7. I have considered rival submissions and material on record. The facts noted above are not in dispute that assessee in the return of income has disclosed complete transaction of sale of shares and also disclosed earning of long term capital gain on sale of shares in a sum of ₹ 11,25,000/- which is the basis of levy of the penalty against the assessee. The assessee, thus, disclosed complete facts and details not only in the return of income and computation of income .....

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of the purchase bills and sale bills alongwith copies of the accounts of assessee in the books of brokers. All the transactions of sales have been conducted through D-Mat Account and through banking channel. The assessee also filed details to show that shares in question have been listed in Ahmedabad Stock Exchange. The authorities below have not accepted the explanation of the assessee in quantum proceedings because transfer of shares have not been conducted through recognized Stock Exchange. .....

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closed sources. 8. The authorities below also made addition against the assessee because the brokers have not produced books of account which is not within the control of the assessee to direct the brokers to produce books of account before Assessing Officer. Hon'ble Delhi High Court in the case of CIT Vs Nath Bros. Exim International Ltd. 288 ITR 670 held as under : The assessee had claimed dividend income as his business income and according to the assessee it was entitled to a deduction u .....

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material. It could not be said that the conduct of the assessee attracted the pro-visions of section 271(l)(c). The cancellation of penalty was justified. 8(i) Hon'ble Delhi High Court in the case of CIT Vs Amit Jain 351 ITR 74 held as under : The assessee declared an income of ₹ 2,60,73,558 from shortterm capital gains. The Assessing Officer on an interpretation of the relevant provisions and having regard to the nature of transactions assessed it as income from business. He also levi .....

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