TaxTMI 
TaxTMI 
2015 (2) TMI 156
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....itio and/or otherwise void and bad-in-Law. WITHOUT PREJUDICE TO THE ABOVE GROUND II: 1. On the facts and circumstances of the case and in law, the CIT(A) erred in upholding the action of the AO in levying penalty of Rs. 66,36,077/- u/s section 271(1)(c) of the Act on the alleged ground that there was concealment of income and that the Appellant had furnished inaccurate details of income with respect to the long term capital loss claimed by the Appellant. 2.The Appellant prays that a mere difference in opinion would not amount to raising a question on the bonafide claim made by the Appellant with respect to the Long term capital Loss. 3.The Appellant prays that the said penalty levied by the AO and confirmed by the CIT(A) be deleted. 2. At the time of hearing, ld. Counsel for the assessee, Shri Haresh G. Buch, contended that substantial question of law has been admitted by the Hon'ble High Court, therefore, no penalty is imposable u/s 271(1)(c) of the Act. Reliance was placed upon the decision from Hon'ble jurisdictional High Court in the case of CIT vs M/s Nayan Builders & Developers (ITA No.415/2012) order dated 8th July, 2014. Our attention was invited to the ca....
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....bstante clause which mentions that the difference between the repurchase price of the units and capital value of units shall be deemed to be capital gains arising to the assessee in the previous year in which such a repurchase takes place and will be taxed accordingly. In view of these facts A.O. disallowed the claim of long term capital loss of Rs. 6,34,72,767/- and allowed short term capital loss at Rs. 97,17,302/-. On appeal, the Ld.CIT(A) made enhancement of Rs. 97, 17,302/- which had been allowed by the A.O. as short term capital loss and was allowed to be carried forward. Accordingly. the A.O. levied minimum penalty of Rs. 66,36.077/- treating that the assessee has deliberately furnished inaccurate particulars of its income and sought to evade income to the extent of Rs. 6,34,72.767/-. 3.2 During the course of appellate proceedings the appellant has furnished written submissions wherein it has been submitted that capital gains on the conversion of subject US 64 units into US 64 tax free bonds should be computed under normal provisions u/s45( I) and not u/s.4S(6) of the I.T.Act. Appellant further submitted that US 64 units are capital asset to the appellant within the meani....
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.... facts of the case, perused the penalty order and submissions made by the appellant and also discussed the case with the A/R of the appellant. The A.O. made disallowance of long term capital loss on sale of units of UTI but allowed the short term capital loss (difference between purchase price & sale price of units) to be carried forward. While considering the issue during first appellate proceedings, the Ld.CIT(A) in Para 1.13 of his order No.CIT(A)-XIIT/275/2006-07 dated 28.11.2008 observed as under: "1.13 However, in the course of appellate proceedings, it was noticed that the capital gains accruing on US 64 were specifically exempted from taxation u/s. l0(33). Therefore, vide order sheet entry dated 18.ll.2008, the assessee was specifically asked to show cause as to why the capital loss should not also be disallowed on transfer of US 64. In other words, it would lead to an enhancement as envisaged u/s 251(2). In this regard the assessee has submitted as follows: (a) As per section 10 only positive income is exempt and not loss. (b) Capital loss is not included in total income and is carried forward. (c) Section 10(35) deals with positive income and therefore, sectio....
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....ourt in the case of Union of India VsI Dharmendra Textile Processors (2008) 306 ITR 277, where in order dated 29.9.2008 it was held that the object behind enacting section 271(1)(c) read with explanation indicates that the said section has been enacted to provide a remedy for loss of revenue. Penalty u/s. 271(1)(c) is a "civil liability". Willful concealment is not essential ingredient for attracting a civil liability as in the matter of prosecution u/s. 276C. Thus, it may be noted that the appellant has failed to offer an explanation before the A.O. by way of not responding to penalty notice u/s.271(1)(c). Even during the course of appellate proceedings it failed to prove that its action to claim loss was bonafide. In view of these facts and legal position. I am of the considered opinion that the penalty u/s.271(1)(c) has rightly been imposed by the A.O. which is upheld. 4 Ground of appeal No. III is general in nature, hence not adjudicated upon. 5. In the result, appeal is dismissed." 2.2. Without going into much deliberation and merits of the case, now question arises since the substantial question of law "whether on the facts in the circumstances of the case and in law....