TaxTMI 
TaxTMI 
2014 (9) TMI 432
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....urities and other related activities. In the return of income filed in response to the notice under Section 153C of the Act, income of Rs. 10,65,750/- was disclosed. The respondent-assessee had also disclosed short term capital gains of Rs. 31,04,398/- on account of sale of 12,500 shares of Reliance India Ltd., 24,442 shares of Moser Baer India Ltd., 8886 shares of NIIT Ltd. and 15,300 shares of Software Technologies Group Ltd. The Assessing Officer held that the aforesaid sale and purchase was not in the nature of the investment but transactions relating to trading in shares, and accordingly, should be treated as business income. 4. In the penalty order passed by the Assessing Officer, he has recorded that the assessee did not disclose full and necessary particulars as the details were not mentioned in the return of income or any accompanying documents. Further, if the return had not taken up for scrutiny, the transactions in question would have been treated as short term capital gains and not as income from business. He accordingly rejected the detailed submissions made by the assessee to the effect that they were maintaining two separate accounts; for investments and the other ....
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....account, short term capital gains was duly credited. 6. The aforesaid finding of the CIT (A) was affirmed by the Tribunal in the impugned order dated 14.11.2013. Thus, we do not think, the finding of the Assessing Officer that material facts were not duly disclosed by the assessee is correct. No document or material has been filed before us to support or contend that the finding of the appellate authorities including the Tribunal is perverse or factual incorrect. 7. Now, coming to the question of bona fides and the explanation offered by the respondent-assessee, we notice that the question whether the shares were held as investment or stock-in-trade is highly debatable and a difficult call in many a cases. As noticed above, the respondent-assessee was investing in shares and securities and also dealing in purchase and sale of securities. There is no adverse comment or observation of the Assessing Officer on the submission and assertion made by the respondent-assessee that they were maintaining two separate portfolios, one for shares held as investment and the other for the shares held as stock-in-trade. The assessment order itself records that there were number of transactions re....
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....f that he is not liable so to include it, it would not be right to condemn the return as a false return inviting imposition of penalty. (v) Relying upon the judgement, of the Hon'ble Delhi High Court in the case of CIT vs. Bacardi Martini India Ltd. [2007] 158 Taxman 348 (Delhi), it was contended that the material facts for computation of income was brought by the assessee, on record and none of the particulars had been concealed and submitted inaccurately. (vi) ,The assessee invited attention towards the Judgement of Hon'ble Rajasthan, High Court, Jaipur Bench in the case of Chender Pal, Bagga vs. the Appellate Tribunal and another (2003) 261 ITR 67 (Raj.). Relying upon this judgement, it was contended that if the assessee has claimed any exemption after disclosing the relevant basic facts and under ignorance of the provisions of the Act of 1961 has not offered that amount for tax, in such cases, penalty should not be imposed. (vii) The assessee also placed reliance upon the judgement of Hon'ble ITAT, Delhi Bench 'F' in the case of DClT, Circle14 (1), New Delhi vs. M/s PEC Ltd. reported as 2010-TlOL-50-ITAT-DEL and contended that only because addition is sus....
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....e expenditure on interest would amount to giving inaccurate particulars of such income". We do not think that such can be the interpretation of the words concerned. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. In CIT v. Atul Mohan Bindal [(2009) 9 SCC 589] where this Court was considering the same provision, the Court observed that the assessing officer has to be satisfied that a person has concealed the particulars of his income or furnished inaccurate particulars of such income. This Court referred to another decision of this Court in Union of India v. Dharamendra Textile Processors [(2008) 13 SCC 369] as also the decision in Union of India v. Rajasthan Spg. & Wvg. Mills [(2009) 13 SCC 448] and reiterated in para 13 that: (Atul Mohan Bindal case [(2009) 9 SCC 589] , SCC p. 597, para 13) "13. It goes without saying that for applicability of Section 271(1)(c), conditions stated therein must exist." 12. Therefore, it is obvious that it ....