TaxTMI 
TaxTMI 
2014 (10) TMI 215
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.... there was a change in majority shareholding of the company in the previous year relevant to the assessment year under consideration. The capital loss though was sought to the carried forward to subsequent years against Capital Gain whenever accruing or arising but there was no impact on the returned or assessed income determined by the Assessing Officer. The assessee filed an appeal before the CIT(A)-I, New Delhi against the so called disallowance of carry forward loss at such later date as per claim in terms of Income Tax Act, 1961, which was dismissed by the appellate authority vide order dated 9.2.2012 disagreeing with the assessee. After receiving the order passed by the appellate authority dated 9.2.2012, the assessee did not carry forward the said capital loss of Rs. 23,90,722/- in the return filed for A.Y. 20012-13. The AO passed the order dated 21.3.2013 levying penalty of Rs. 8,05,000/- against the assessee under section 271(1)(c). 4. Against the above Penalty Order dated 21.3.2013 passed by the Assessing Officer, assessee appealed before the Ld. First Appellate Authority, who vide impugned order dated 25.4.2014 upheld the penalty of Rs. 8,05,000/-. 5. Against the above....
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....he said loss was not adjusted against any taxable gain. Without any loss to the revenue, no penalty can be imposed. If at all any loss has been caused, It is to the assessee as the assessee has been deprived of setting off the loss against furture taxable gains. It is undisputed that the AO disallowed the claim of the appellant for carry forward of long term capital loss U/s 79 of IT Act on the basis that the majority share holding had undergone a change in the previous year relevant to AY in question, which is apparent from the following observation of the AO:- "According to Section 79, where a change in the majority shareholding has taken place in the previous year, in case of a company, not being a company in which the public is substantially interested, no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year unless on the last day of the previous year the shares of the company carrying not less than 51 % of the voting share was beneficially held by the person who beneficially held shares of the company carrying not less than 51 % of the voting power ,?n the last day of the year or years in which the l....
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....submitted that the present case is fully covered by the ratio laid down by the Hon'ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd. (2010) 322 ITR 0158 (SC) as under "A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to the inaccurate particulars. Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty under s. 271(1)(c). If we accept the contention of the Revenue then in case of every Return where the claim made is not accepted by AD for any reason, the assessee will invite penalty under s. 271 (1)(c). That is clearly not the intendment of the legislature." 6.4 Ld. Counsel of the assessee has further submitted that the law laid down by the Hon'ble Supreme Court in the aforesaid cases has been followed in the following further cases the facts of which are similar to the present case:- a. COMMISIONER OF INCOME TAX-14 (MUMBAI) AND NALIN P. SHAH(HUF), NALIN P. SHAH AND MANAN....
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....e's claim of set off will not attract the penal provisions as contained under s. 71 (1 )(c). The Tribunal placed reliance on the recent decision of Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproducts (P) Ltd. (Supra). 6.5 It was the contention of the Ld. Counsel of the assessee that the Ld. CIT(A) has wrongly relied on the case of UOI Vs. Dharmendra Textiles (2007) 295 ITR 244 (SC) as the said case was under Central Excise. 6.6 It was also submitted that Ld. CIT(A) wrongly did not apply the ratio of the law laid down in the Reliance Petroproducts case (supra) on the basis of the Dilip N. Saroff's case and Dharmendra Textile's case as the said cases are not applicable to the facts and circumstances of the present case. He also pointed out that Ld. CIT(A) has not referred to any case wherein penalty under section 271(1)(c) has been held to be justified simply on the basis that the assessee had made a wrong claim of carry forward of Long Term Capital Loss where the same has been disallowed on the technical ground, even though it was found to be admissible on merits, as in the present case. Lastly, it was the prayer of the Ld. Counsel of the assessee that in o....
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.... prove that there was concealment of particulars of Income or furnishing of inaccurate particulars of income. In the instant case such onus was shifted on the department has not been discharged." 7.1 We also find that section 271(1)(c) postulates imposition of penalty for furnishing of inaccurate particulars and concealment of income. On the facts and circumstances of this case the assessee's conduct cannot be said to be contumacious so as to warrant levy of penalty. 7.2 In this regard, we find that assessee's counsel reliance from the Hon'ble Apex Court decision in the case of CIT vs. Reliance Petro Products Ltd. in Civil Appeal No. 2463 of 2010 is squarely applicable in the present case of the assessee. In this case vide order dated 17.3.2010 it has been held that the law laid down in the Dilip Sheroff case 291 ITR 519 (SC) as to the meaning of word 'concealment' and 'inaccurate' continues to be a good law because what was overruled in the Dharmender Textile case was only that part in Dilip Sheroff case where it was held that mensrea was a essential requirement of penalty u/s 271(1)(c). The Hon'ble Apex Court also observed that if the contention of the revenue is accepted then ....