TMI Blog2020 (6) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... r Explanation 2 of sub-section 2 of section 55, the cost of acquisition wherein an asset has been acquired u/s 49(1) then the cost of asset to the previous owner has to be considered as cost of acquisition and therefore find no incorrect claim has been made by the assessee by claiming of cost of acquisition. For whatever reasons during the assessment proceedings, the assessee has withdrawn the same and has also paid taxes. As satisfied that the claim of the assessee i.e. the claim of acquisition was bonafide and therefore, the penalty u/s 271(1) (c) is not justified. Interest income - Assessee has earned interest income the assessee has not offered the entire income to tax. This is certainly a case of furnishing of inaccurate particula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost of acquisition at Rs.zero and calculated the LTCG and paid the taxes thereon. 3. Further, with regard to interest income earned by the assessee, the AO noticed that though the assessee has earned Savings Bank interest of ₹ 1,62,629/-, the assessee had offered only ₹ 47,094/- to tax as income from other sources. When confronted, the assessee offered the balance of interest income also to tax and paid the taxes thereon. Thereafter, the assessee did not prefer any appeal to the CIT (A) and thus the assessment order has become final. 4. Meanwhile the AO initiated the penalty proceedings u/s 271(1)(c) and levied the minimum penalty of 100% of taxes sought to be evaded. Accordingly, the penalty order dated 3.5.2018 was passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med the cost of acquisition which was after indexation. He submitted that u/s 55(2) of the Act and the explanation (b)(ii) thereunder, where the capital asset became the property of the assessee by any of the modes specified in sub-section (1) of section 49 and the capital asset became the property of the previous owner before 1st of April, 2001 means the cost of the asset to previous owner or the RMV of the asset are 1-4-2001 at the option of the assessee. It was submitted that the assessee s father had acquired the shares prior to 1-4-2001 on which bonus shares were also allotted to him for which he incurred the cost of acquisition and thereafter 2000 shares were gifted to the assessee. Thus, these shares were acquired prior to 1.4.2001, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s out of these 5220 shares, that the assessee has been gifted 2000 equity shares on 14.11.2014. Thus, the assessee has been allotted shares after allotment of bonus shares by her father and therefore, Explanation 2 of section 55(2) would definitely apply as the assessee has received the shares by way of gift. As per Explanation 2 of sub-section 2 of section 55, the cost of acquisition wherein an asset has been acquired u/s 49(1) of the Act, then the cost of asset to the previous owner has to be considered as cost of acquisition and therefore, I do not find that any incorrect claim has been made by the assessee by claiming of cost of acquisition. For whatever reasons during the assessment proceedings, the assessee has withdrawn the same and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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