2014 (2) TMI 368

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.... 271(1)(c) of the Act amounting to Rs. 40,00,000/- after concluding that addition was consequence of difference of opinion without appreciating the facts that offering income either under the head of "Business & Profession" or "Capital Gain" substantial effect on the rate of tax and thus reduce the tax liability which can also well be termed as furnishing of inaccurate particulars of income. 2. The appellant prays that the order of the CIT (A) on the above ground be set aside and that of the AO be restored." 3. Briefly stated relevant facts of the case are that the assessee is a Firm engaged in the business of „Development and Construction‟ and had entered into a development agreement on 8.2.1997 with M/s. Jaycee Construct....

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....ed by the assessee firm as its „business income‟ and penalty proceedings were initiated under section 271(1)(c) for filing inaccurate particulars. Aggrieved with the decision of the AO, assessee filed an appeal before the first appellate authority. 4. During the proceedings before the first appellate authority, after considering the submissions of the assessee, CIT (A) granted relief holding that this is not a fit case for levy of penalty. In the process, he considered the fact that the taxability of the said gains under the head „business income‟ or „capital gains‟ is a matter of debatable issue. Accordingly, he deleted the penalty levied by the AO. Para 2.10 of the impugned order is relevant in this ....

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.... before the CIT (A). Thus, the appellant accepted the decision of the AO. However, the fact remains that it is a case where the head of income was changed by the AO from long term capital gains to business income. Further, the issue of long term capital gains vs. business income is a debatable issue and the acceptance of the appellant to the finding of the AO has no bearing on the same. Furthermore, it is also a case where the claim made by the appellant in the form of long term capital gains have been disallowed by the AO by treating the same as business income, therefore, the various decisions cited by the appellant are quite relevant to the fact and circumstances of the case, particularly the case of Reliance Petro Products Ltd. It is th....