TMI Blog2019 (8) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee disclosed the entire facts to the Revenue Department and did not conceal anything to the AO. The assessee never claimed profit in the matter but claimed short term capital loss. The issue is, therefore, covered by order of ITAT Delhi Bench in the case of Deepti Agarwal vs. ITO [ 2018 (9) TMI 709 - ITAT DELHI] in which in the similar circumstances penalty was cancelled. It may also be noted that the AO before levy of the penalty has issued show cause notice dated 16.12.2016 (PB-1) which is reproduced above in which AO has not mentioned as to for which the limb of section 271(1)(c) whether for concealment of particulars of income or furnishing inaccurate particulars of income, show cause notice has been issued. AO did not mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of the following: Short-term capital loss claimed by the assessee to the tune of ₹ 20,15,865/- was disallowed since it was a bogus, arranged transaction with the intention of booking a short-term capital loss (STCL) in order to set off the long-term capital gains (LTCG) of ₹ 10,03,300/- on sale of an immovable property. Since the STCL was assessed as a bogus and sham transaction, the LTCG set off was disallowed, and the amount of ₹ 10,00,330/- was added back to the total income returned by the assessee. Further, the expenditure incurred on paying commission to the various facilitators of this sham transaction was also assessed at 5% of the total STCL claimed, i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y u/s 271(1)(c) of the Act which is confirmed by the Ld. CIT(A). 4. Ld. Counsel for assessee reiterated the submissions made before AO and referred to show cause notice dated 16.12.2016 (PB 1) in which the AO has mentioned below: Whereas in the course of proceedings before me for the AY 2014-15 it appears to me that you are hereby requested to appear before me at 11.00 a.m. on 10.01.2017 and show cause why an order imposing a penalty on you should not be made u/s 271(1)(c) of the I.T. Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in personal through authorized representative you may show cause in writing on or before the said date which will be considered before any su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1)(c) of the I.T. Act, 1961, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing inaccurate particulars of income. The decision of Hon ble Karnataka High Court in the case of CIT vs. M/s SSAs Emerald Meadows (supra) have been confirmed by the Hon ble Supreme Court reported in 73 taxmann.com 248 by dismissing the SLP of the Department. In the present case, the AO issued a show cause notice dated 28.12.2016 which is also mentioned in the penalty order in which AO did not specify under which limb of section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing inaccurate particulars of income. Even in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther find that during the course of scrutiny assessment proceedings the AO has proceeded by the assumption that the shares purchased and sold by the assessee comes into the category of penny stock companies. The AO has drawn support from outside information. In my considered opinion the surrender of exemption by the assessee on repetitive queries would not amount to furnishing of inaccurate particulars of income. The assessee has claimed exemption as per the provisions of law, though surrendered during the course of assessment proceedings. In my considered opinion, on the facts of the case, no penalty is leviable u/s 271(1)(c) of the Act. I, accordingly, set aside the finding of the Ld.CIT(A) and direct the AO to delete the penalty so levie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee on record presumed that the transactions are bogus. These facts clearly show that assessee disclosed the entire facts to the Revenue Department and did not conceal anything to the AO. The assessee never claimed profit in the matter but claimed short term capital loss. The issue is, therefore, covered by order of ITAT Delhi Bench in the case of Deepti Agarwal vs. ITO (supra) in which in the similar circumstances penalty was cancelled. It may also be noted that the AO before levy of the penalty has issued show cause notice dated 16.12.2016 (PB-1) which is reproduced above in which AO has not mentioned as to for which the limb of section 271(1)(c) of the Act, whether for concealment of particulars of income or furnishing inaccurate partic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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