TaxTMI 
TaxTMI 
2016 (1) TMI 630
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....of Appeal :- "1. On the facts & circumstances of the case & in law, the learned CIT(A)-V, Pune erred in law and on facts in levying concealment penalty of Rs. 1,06,800/- on the appellant for furnishing inaccurate particulars of income. 2. Alternatively and without prejudice, the learned CIT(A)-V, Pune erred in levying concealment penalty @ 150% on the alleged concealed particulars of income when the law permits levy of minimum penalty of 100%. The appellant craves leave to add, alter or amend to the grounds of appeal, before or at the time of hearing." 4. The appeal pertains to levy of penalty under section 271(1)(c) of the Act amounting to Rs. 1,06,800/- @ 150% of the tax evaded. 5. The relevant facts as briefly stated are that the assessee has claimed long term capital gains of Rs. 3,36,476/- on account of sale of Database Finance Ltd. shares which are as under :- Details of share purchase Purchase details scrip Sr. No. Purchase date Purchase from (Broker) Qty Purchase Rate Purchase amount Demat Date Payment details 1 13.0....
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..... Thereafter, the Assessing Officer also noted that the statement recorded under section 132(4) of the Act of Shri Ghanshyam J. Sukhwani has evidential value and subsequent retraction was nothing but an afterthought. The Assessing Officer further noticed that the onus placed upon the appellant to prove the genuineness of the transaction was not discharged by him. 9. In the backdrop of the enquiries conducted by the Income Tax Department, the Assessing Officer required the assessee to prove the genuineness of the capital gains vide his office letter dated 13.03.2008. The assessee was also asked to produce the Mumbai Brokers as the assessee's witness. In response, the assessee merely filed contract notes in support of purchases and sales. The assessee, however, expressed his inability to produce the Mumbai Brokers who sold the shares of the assessee on the plea that they are not traceable. The Assessing Officer observed that the transactions are peculiar for the following reasons :- "1) The assessee's father is regularly dealing in shares in Pune wherein he deals with 4-5 brokers. However, this is the only transaction with the Mumbai Brokers. 2) Payment for the p....
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....ogus and antedated. The entire series of alleged transaction are premeditated and meticulously planned. 11. In first appeal, the CIT(A) upheld the action of levy of penalty. However, he observed that interest of justice will be met if the penalty imposed is reduced and substituted @ 150% against 300% of tax evaded. Accordingly, he reduced the penalty to150% of the tax evaded. 12. Aggrieved by the order of the CIT(A), the assessee is in further appeal before us. 13. Before us, the Ld. Authorized Representative for the assessee contended that penalty is not exigible in the facts of the case. He observed that the transactions of purchase and sale are backed by broker notes. He contended that the shares were actually delivered in his Demat Account which is a reality. The appeal has not been preferred before the Tribunal in the quantum appeal only to avoid the protracted litigation. He, therefore, pleaded that the penalty sustained by the CIT(A) should be set-aside and cancelled. In support of the contentions raised, the Assessee relied on following case laws: (i) Smt. Smita P. Patil & Ors. vs. ACIT, (2014) 159 TTJ 0182 (Pune); (ii) ITO vs. Ajay Shantilal Lalw....
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.... purchased transactions regarding the shares of Database Finance Ltd., was not genuine. Couple with this, the fundamentals of the company were found to be negative and the company had not income of more than couple of lakhs. However, there is a huge price rise. From the above facts, it is crystal clear that the purchase transactions have been concocted and manipulated to declare wrongful long term capital gains. In MAK Data (P.) Ltd. (supra), the Hon'ble Supreme Court held on facts that when the assessee had no intention to declare its true income and no explanation is offered for alleged concealment of income, the imposition of penalty justified. The Assessing Officer has reportedly made detailed enquiries and his action is based on incriminating evidences. In the facts of the present case, we are inclined to agree with the findings of the lower authorities that the circumstances exist to say that transactions are not bona-fide per se. We find ourselves in complete agreement with the action of the lower authorities for imposition of penalty. The decisions cited by the Assessee does not set out any proposition of law and are distinguishable on facts. The ITAT Pune in the case of Sm....
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.... No.051962 Dtd. 25/12/02 for Rs.81,500/- 2 25/09/02 15000 48000 5/6/03 Total 81,500 15000 shares written off on 01/04/2007. Details of share sales Sr. No. Date of sale Sale through (Broker) Qty Sale rate Sale amount Demat date Payment received details 1 6/1/04 Drishti Securities Pvt. Ltd. 10000 69.84 6,98,457.13 Ch. No.298099 of Rs.698457/- dt. 14/01/2004 Long Term Capital Gain 666457.13 20. In this assessment year also, as noted, the facts are broadly identical and therefore not repeated. However, there is one important variance. The shares of the impugned scrip Suryadeep Salt Ltd. (SSL) in question were transferred in the demat account of the Assessee prior to its sale unlike in the earlier year. The transfer towards purchase by the selling broker was albeit after more than 7 months of purported purchase by the Assessee. As noted in the quantum order of the CIT(A), the shares were credited to the demat account of....