TaxTMI 
TaxTMI 
2015 (1) TMI 734
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....eriod. The provisions of sec. 94(7), prior to the amendment by Finance (No.2) Act, 2004, shall apply if the units are purchased within a period of three months prior to the record date (for declaring dividend) and sold within a period of three months after the above said date. As per the pre-amended provisions, the transactions carried out by the assessee were not hit by the provisions of sec. 94(7) of the Act. 3. However, the Finance (No.2) Act, 2004 amended the provisions of sec. 94(7) of the Act, whereby the sale made within a period of NINE months after the record date was also brought within its ambit. According to the assessee, the Finance (No.2) Act, 2004 was introduced in the parliament on 8th July 2004 and received the assent of the Hon'ble President of India on 10th Sep. 2004. It came into effect from 1.4.2005 and hence became applicable from asst. year 2005-06. 4. The case of the assessee was that it purchased and sold the units prior to 10th Sep. 2004, i.e., the date on which the Finance (No.2) bill, 2004 received the assent of the Hon'ble President of India. Since the transactions of sales were concluded prior to the receipt of assent of the President of India, the p....
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....r the record date was enhanced from 3 months to 9 months and the said Bill received the assent of the Hon'ble President of India on 10th Sep. 2004. Hence the assessee was under the bonafide belief that the amended provisions will not affect the transactions already concluded prior to the date of assent of the Hon'ble President of India. (b) The assessee was under bonafide belief that the transactions carried on by him in accordance with the provisions that existed at the time of entering into the transactions cannot be affected by a subsequent amendment brought with retrospective effect. (c) The assessee has not furnished any inaccurate particulars of income. All the details were furnished before the assessing officer either in the return of income or during the course of assessment proceedings. (d) A claim, which is not sustainable in law, will not lead to furnishing of inaccurate particulars of income. However these explanations did not find favour with the assessing officer and Ld CIT(A). 8. We notice that there is no dispute with regard to the fact that the assessee has furnished all the details before the assessing officer during the course of assessment proceedings. In th....
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....ulars of income. 11. In the rejoinder, the Ld A.R drew our attention to the decision dated 14-12- 2012 rendered by the Hon'ble jurisdictional Bombay High Court in the case of CIT V/s M/s Aditya Birla Nova Limited (successor), In Business to M/s Birla Global Finance Limited, (2012-(IT1)-GTX-0390-Bom)(Income Tax Appeal No. 3899 of 2010). We have gone through the said decision. The facts prevailing in that case are that the assessee therein claimed deduction u/s 35D of the Act and the same was disallowed on the ground that it is not an industrial undertaking. It is pertinent to note that a similar claim in the earlier years had also been disallowed. Another claim put forth by the assessee was related to the dimunition in the value of shares. The said claim was also disallowed on the ground that the shares were held as investments. The penalty levied on both the disallowances were deleted by the Hon'ble jurisdictional High Court with the following observations:- "11. ............. However to attract the provisions of section 271, the assessee must be held to have concealed the material particulars or to have furnished inaccurate particulars. At the cost of repetition in the present c....
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.... used in Section 271(1)(c) would embrace the meaning of the details of the claim made. It is an admitted position in the present case that no information given in the return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. 11. The learned counsel argued that "submitting an incorrect claim in law for the 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 ....
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....proceedings in the Tamil Nadu General Sales Tax Act, the Court had found that the authorities below had found that there were some incorrect statements made in the return. However, the said transactions were reflected in the accounts of the assessee. This Court, therefore, observed: (SCC p.688, para 7) "7. So far as the question of penalty is concerned the items which were not included in the turnover were found incorporated in the appellant's accounts books. Where certain items which are not included in the turnover are disclosed in the dealer's own account books and the assessing authorities include these items in the dealer's turnover disallowing the exemption penalty cannot be imposed. The penalty levied stands set aside." The situation in the present case is still better as no fault has been found with the particulars submitted by the assessee in its return." The Supreme Court also held that it was only on the point of mens-rea that in Union of India & Ors. vs. Dharmendra Textile Processors & Ors, the Supreme Court over-ruled the earlier judgment of the Supreme Court in Dilip N. Shroff vs. Jt. CIT, (2007) 291 ITR 519. 13. Mr.Malhotra submitted that Explanation ....