TaxTMI 
TaxTMI 
2015 (9) TMI 1292
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....iled his return of income on 30.07.2009 declaring nil income and claiming short term capital loss of Rs. 62,09,653/- to be carried forward. However, in the assessment framed u/s 143(3) of the Act vide order dated 22.12.2011, the AO allowed short term capital loss of Rs. 30,27,277/- to be carried forward. The assessee did not preferred any appeal against the said assessment order thereafter the AO levied a penalty of Rs. 8,58,653/- u/s 271(1)(c) of the Act. 4. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that during the course of computation of short term / long term capital gains arising from dealing in shares, at the time of preparing the return of income, wrong working of short term and long term capi....
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....en to the assessee to show his regret for the mistake. The reliance was placed on the judgement of the Hon'ble Supreme Court in the case of CIT vs. Reliance Petro Products and of the Hon'ble Delhi High Court in the case of CIT vs. Dharampal Premchand. 5. The ld. CIT(A) after considering the submissions of the assessee deleted the penalty by observing in para 5.1 to 5.5. of the impugned order as under :- "5.1 I have carefully gone through various submissions of the appellant. The relevant facts are that the appellant filed his return of income declaring therein nil income and claiming carry forward of short term capital loss of Rs. 62,09,653/-. The case was picked up for scrutiny and the appellant received questionnaire dated 21.09.201....
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....at only a routine question about capital loss has been asked by him as reproduced below; 'Pl give details about the capital gains arisen to you during the year, whereby you have claimed capital loss of Rs. 62,09,653'. It is not the case that the AO had found out something wrong during scrutiny proceeding and the appellant corrected it after being pointed out by the AO. It is also relevant to mention that the AO assessed the same figure of short term capital loss as declared by the appellant in his revised return, though rejected as non-est by the AO. The appellant has furnished both copies of working of capital loss, explaining how the mistake got crept in. There is force in argument of the appellant since there was short term capital....
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....eding, it does not automatically lead to concealment of income. 5.5 In view of discussion supra, I hold that none of the preconditions for levying penalty as mentioned in section 271(1)(c) and explanation 1 to section 271(1)(c) are satisfied in the present case. Accordingly the impugned penalty order u/s 271(1)(c) is quashed. The AO is directed to grant relief accordingly. The grounds of appeal are disposed of accordingly." Now the department is in appeal. 6. The ld. DR strongly supported the order of the AO and reiterated the observations made in the assessment order it was further stated that the assessee disclosed wrong figure of capital loss to be carried forward and as such concealed the income by disclosing the wrong facts, t....
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....e succeeding years because the claim of carried forward of short term capital loss had affected the future tax liability. On a similar issue the Hon'ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd. vs. CIT, 348 ITR 306 has held as under :- "Allowing the appeal, that the facts of the case were peculiar and somewhat unique. Notwithstanding that the assessee was a reputed firm and had great expertise available with it, it was possible that even the assessee could make a "silly"mistake. The fact that the tax audit report was filed along with the return and that it unequivocally stated that the provision for payment was not allowable under section 40A(7) of the Act indicated that the assessee made a computation error in its....