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2019 (3) TMI 317

..... eated the loss as ‘Short Term Capital Loss’ - HELD THAT:- Mere change of head of income should not result in automatic levy of penalty. The details about the ‘business loss’ or ‘Short Term Capital Loss’ were available on the record. Therefore, it cannot be said that assessee had filed ‘Inaccurate Particulars of Income’. Even if a unsubstantiated claim is made in the return of income, it cannot be held that the assessee is liable for levy of penalty u/s. 271(1)(c). Difference of opinion between the AO and the assessee about head of income under which ‘Particular Item’ is to be ‘assessed’ was and would remain a bone of contention between the AO and the assessee. - But such differences should not and cannot result in invoking the penal pro .....

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..... ut considering the facts and circumstances of the case. 4) On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in levying a penalty of u/s.271(1)(c) of the Income Tax Act' 1961, on the issue of addition made of ₹ 3,125/- on account of alleged mismatch of AIR, without considering the facts and circumstances of the case. 5) The appellant craves leave to add, amend, alter or delete the said ground of appeal. 2. The brief facts of the case are that the assessee company is engaged in the business of trading in commodities. The return of income for the year under consideration was filed on 28-09-2014 declaring total income of ₹ 1,61,361/-. .....

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..... particulars of income within the meaning of section 271(1)(c) of the Income Tax Act, 1961. 7. As per the facts of the present case, the assessee claimed that the transactions relating to mutual fund constituted part of his business and therefore the loss arising out of the transactions in the mutual fund units was to be treated as its business loss. However, AO rejected the claim of the assessee and held that the transactions in the mutual fund did not constitute assessee s business transactions. Thus, AO treated the loss as Short Term Capital Loss of the assessee. 8. Ld. AR submitted that assessee had made claim which was bonafide and the same was coupled with documentary evidence, but nothing was brought on record by the AO. It was furthe .....

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..... essee makes makes a purported wrong claim in return of income, but the same is disclosed in return of income, penalty is not leviable. Such view had alreaby been taken by the Hon'ble Bombay High Court, being the jurisdictional High Court in the case of CIT vs. Nalin P. Shah (HUF) (40 taxmann.com 86). 12. From the facts of the present case, we notice that assessee had claimed that the transactions relating to mutual fund constituted part of his business and therefore the loss arising out of the transactions in the mutual fund units was to be treated as its business loss. However, AO rejected the claim of the assessee and held that the transactions in the mutual fund did not constitute assessee s business transactions and treated the loss .....

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..... d held that the assessee had furnished all the details of its expenditure as well as income in its ROI, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the return or not. 16. The Hon'ble Bombay High Court further held that merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not attract penalty under section 271(1)(c) of the Act. The Hon'ble Bombay High Court also rejected the Department's argument that the decision in case of Reliance Petroproducts (supra) was per incurim because it did not refer to Explanation .....

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..... n the assessee had mentioned about the dealing with shares of other company, that the AO had found about the loss from the profit and loss account filed by the assessee. The assessee relied upon the judgment of the Hon ble Supreme Court delivered in the case of Reliance Petro Products Ltd.(322ITR158). It was further argued that there was no change in amount of total income which was a loss, that merely a change of treatment of loss did not tantamount to concealment of income/filing of inaccurate particulars. Assessee relied upon cases of Auric Investments and Securities Ltd.(310ITR121) and Bhartesh Jain(323ITR58) in its support. The FAA considered the submission of the assessee and the penalty order of the AO. He held that in the matter und .....

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