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2019 (5) TMI 849

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..... particulars of income or concealment of income. See COMMISSIONER OF INCOME-TAX VERSUS RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] - Decided in favour of assessee. - 1513/Hyd/2018, 1514/Hyd/2018, 1515/Hyd/2018, 1516/Hyd/2018, 1517/Hyd/2018, 1518/Hyd/2018 - Dated:- 10-5-2019 - Smt. P. Madhavi Devi, Judicial Member And Shri S.Rifaur Rahman, Accountant Member For the Assessee : Shri K.C. Devdas For the Revenue : Shri Nilanjan Dey, DR ORDER PER BENCH: All these appeals by the respective assessees are against the orders of the CIT (A)-5, Hyderabad, dated 31.05.2018, confirmation of penalty levied by the AO u/s 271(1)(c) of the I.T. Act. Since the common issue is involved in all of these appeals, they were heard together and are disposed of by this common and consolidated order. 2. For the sake of ready reference, the grounds of appeal raised by Mrs. Amita Tulsyan in ITA No.1513/Hyd/2018 are reproduced hereunder: 1. The order passed by the Hon'ble CIT Appeals (5) is unsustainable both on facts and in law. 2. The Hon'ble CIT (A) failed to note that all the particulars in relation to purchase and sale of shares including contract notes, Bank statements, Demat .....

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..... rein they have stated that the companies in which they are directors are not real companies but are only paper companies and have only issued accommodation entries of bogus LTCG. The AO therefore, issued a show cause notice to the assessee as to why the LTCG claimed as exempt u/s 10(38) should not treated as a bogus LTCG and added to the income of the assessee u/s 68 of the Act. Vide letter dated 29.11.2016, the assessee submitted that the LTCG which was arisen out of sale of shares of M/s. Unno Industries to the tune of ₹ 12,89,690/- is genuine one and that it has paid STT and was therefore, eligible for exemption u/s 10(38) of the Act. It was also submitted that all the relevant details such as purchase of shares, copies of the Bank A/c statements and copy of the Demat accounts were also available and they are accordingly submitted. Further, in order to buy peace with the Department, the assessee voluntarily agreed to offer the capital gain to tax. The assessee also further prayed that the Department may not levy any penalty on such other income. The AO accordingly accepted the long term capital gain offered to tax and brought it to tax u/s 68 of the I.T. Act and brought it .....

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..... (c), is levied for furnishing of inaccurate particulars of income or concealment of income. In the case before us, we do not find that it is a case of furnishing of inaccurate particulars of income or concealment of income, because, the assessee had declared LTCG and had claimed it as exempt u/s 10(38) of the Act on the ground that shares have suffered STT, but subsequently withdrew the claim of exemption. This may, at most be considered as an unsubstantiated or wrong claim but it cannot be held to be furnishing of inaccurate particulars of income or concealment of income. The Hon'ble Supreme Court in the case of CIT vs. Reliance Petro Products (P) Ltd (2010) 322 ITR 158 has considered the import of these phrases used in the section to hold as under: 8. A glance at this provision would suggest that in order to be covered, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. Present is not the case of concealment of the income. That is not the case of the Revenue either. However, the learned Counsel for revenue suggested that by making incorrect claim for the expenditure on .....

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..... "furnishing inaccurate particulars". The Court went on to hold therein that in order to attract the penalty under section 271(1)(c), mens rea was necessary, as according to the Court, the word "inaccurate" signified a deliberate act or omission on behalf of the assessee. It went on to hold that Clause (iii) of section 271(1) provided for a discretionary jurisdiction upon the Assessing Authority, inasmuch as the amount of penalty could not be less than the amount of tax sought to be evaded by reason of such concealment of particulars of income, but it may not exceed three times thereof. It was pointed out that the term "inaccurate particulars" was not defined anywhere in the Act and, therefore, it was held that furnishing of an assessment of the value of the property may not by itself be furnishing inaccurate particulars. It was further held that the assessee must be found to have failed to prove that his explanation is not only not bona fide but all the facts relating to the same and material to the computation of his income were not disclosed by him. It was then held that the explanation must be preceded by a finding as to how and in what manner, the .....

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