2016 (12) TMI 1139

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....lty u/s. 271 (1)(c) of Rs. 81,030/- and while doing so he amongst others failed to appreciate that: a. The appellant had neither concealed the particulars of his income nor had he furnished any inaccurate particulars of income; b. The details and particulars of the long term capital gains earned on the transfer of shares of Ranbaxy Laboratories Ltd. was entirely disclosed; c. The appellant was under a bonafide belief that the gain arising on transfer of shares of Ranbaxy Laboratories Ltd. was exempt u/s. 10(38) of the Act. d. Merely because the appellant had inadvertently committed an error in claiming exemption of capital gain on transfer of shares of Ranbaxy Laboratories Ltd., it could not be said that the appellant had concealed the particulars of income or had furnished inaccurate particulars of income." 3. The brief facts of the case are that the assessee is an individual and during the year under consideration , the assessee has , inter-alia, declared long term capital gain of Rs. 3,95,769/- arising out of sale of 537 shares of M/s. Ranbaxy Laboratories Ltd. sold for a total consideration of Rs. 3,95,769/- and claimed exemption u/s 10(38) of the Act. The sale was effecte....

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....penalty proceedings may be dropped or to reduce the penalty levied u/s 271(1)(c) of the Act on account of computational error in applying higher tax rate of 20% instead of 10% as also not providing deduction of cost of acquisition of shares while calculating long term capital gains , in working out the penalty. The ld. CIT(A) considered the contentions of the assessee and observed that the assessee has earned long term capital gain on sale of 537 shares of Ranbaxy Laboratories Ltd. wherein total sale consideration was Rs. 3,95,769/- which was sold under an buyback option and STT was not paid on the same by the assessee. Thus, the long term capital gain earned by the assessee is not exempt u/s 10(38) of the Act. The ld. CIT(A) observed that the present issue is covered by the decision of ITAT in the case of Asia Management Consultancy Pvt. Ltd. decided on 13th April, 2011 and not by the decision in the case of Doral Trading Pvt. Ltd. (supra) and Asia Attractive Dividend Stock Fund v. DDIT(supra) relied on by the assessee. The ld. CIT(A) held that the assessee has claimed long term capital gain earned by her as exempt u/s 10(38) of the Act under buyback option and as there was no ST....

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....TR 593(SC) and CIT v. Zoom Communication Private Limited (2010) 327 ITR 510(Del. HC) . 7. In the rejoinder, the ld. Counsel submitted that the Tribunal in the case of Virtuous Capital Limited v. ACIT in ITA No. 5647/Mum/2013 for the assessment year 2009-10 vide orders dated 19th November, 2015 has considered all the case laws referred by the ld. D.R. 8. We have considered the rival contentions and also perused the material available on record including case laws relied upon by both the parties. We have observed that the assessee has sold 537 shares of Ranbaxy Laboratories Ltd. under buyback scheme whereby no STT was paid. The long term capital gain earned on such transaction of sale of shares of Ranbaxy Laboratories Limited under buyback scheme was chargeable to tax as no STT was paid by the assessee but in the return of income filed by the assessee with the Revenue , the assessee had declared the said long term capital gains earned by her to be exempt from tax u/s 10(38) of the Act. On being asked, the assessee submitted that it is an inadvertent and bona-fide mistake taken place while filing the return of income with the Revenue. It was also submitted that the assessee has duly....

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.... of 30% at which rate even the advance tax had been paid. Consequent thereto, the respondent - assessee filed revised computation on the basis of tax being payable at the rate of 30%. The assessing officer completed the assessment without granting the claim for refund. However, penalty under Section 271(1)(c) of the Act was levied upon the respondent - assessee by the assessing officer. The Commissioner of Income Tax (A) upheld the order of the assessing officer levying penalty. 4. On further appeal, the Tribunal deleted the penalty as it found that this was a case of bona fide clerical error while computing the tax liability in the process of filing its return of income. However, as the same was rectified by the respondent - assessee on its own before the assessment was finalized, penalty was not justified. The fact of the clerical error was also fortified by the fact that the advance tax had been paid by the respondent - assessee at the rate of 30% and not at the rate of 10%. 5. In view of the fact that the order of the Tribunal is based on finding of fact, we see no reason to entertain the present appeal. Accordingly, the appeal is dismissed with no order as to costs." In ....