Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2019 (8) TMI 181

..... Assessee has declared the transaction in question in the computation of income and return of income. AO examined the issue of long term capital gains and long term capital loss claimed by the assessee. The assessee conducted the entire transaction through banking channel through stock exchange. AO on the basis of the evidences produced by the assessee 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 [2018 (9) TMI .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ome on 18th September, 2014 declaring a total income of ₹ 29,16,710/-. The case was selected for scrutiny. The AO made addition of ₹ 11,01,125/- to the returned income. Thus, the total income was assessed at ₹ 40,17,835/-, vide assessment order dated 16.12.2016. The additions mentioned above were made 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 o .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... reveal the real income and real nature of his share transactions which led to the booking of a contrived short term capital losses. The AO was of the view that Explanation 1 to section 271(1)(c) of the Act apply to facts of the case. The AO, accordingly, levied the penalty 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) .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ppeal filed by assessee holding that notice issued by the AO u/s 274 r.w.s. 271(1)(c) of the I.T. Act, 1961, to be bad in law and it did not specify in which limb of section 271(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 27 .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... imed dividend income as exempt and also long term capital gain on which STT is paid which is also exempt from tax. I further 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 .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... e 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 particula .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||