2015 (1) TMI 1315

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....ing the penalty levied by the Ld. Assessing Officer u/s. 271(1)(c) of the Income Tax Act, 1961 amounting to Rs. 2,25,783/-on the disallowance made u/s 94(7). The appellant prays that the same may please be deleted. Ground No.2: On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in confirming the penalty levied by the Ld. Assessing Officer u/s. 271 (1 )(c) of the Income Tax Act, 1961 amounting to Rs. 33,79,001/- on the reduction in claim of rebate u/s 88E. The appellant prays that the same may please be deleted. Ground No.3: On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in commenting that the appellant has not voluntarily ....

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....king this disallowance, the A.O. initiated the penalty proceedings and imposed the penalty of Rs. 2,25,783/- @ 100% of the tax amount sought to be evaded. 3. It was argued by ld. AR that exactly similar issue was dealt by the Tribunal in the case of City Group Global Markets India Pvt. Ltd., ITA No.5352/Mum/2009, dated 13-12-2011, wherein penalty imposed u/s.271(1)(c) for additions made with reference to disallowance made under Section 94(7) was deleted after having the following observations :- "5. In our view this does not attract penalty under section 271(1)(c). First of all the assessee is regularly purchasing and selling shares as part of business activity in large volumes and only in these two cases there is a declaration ....

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....gal parameters, on facts of the case we are of the view that there occurred a bonafide mistake in not examining the provisions of section 94(7) on these transactions. Moreover, though there are disallowances in the course of the assessment proceedings, mere disallowance does not attract penalty proceedings under section 271(1)(C). Accordingly the assessee's ground is allowed. The penalty levied on this disallowance of loss is hereby cancelled." 4. We have considered rival contentions and found that assessee is a share broker and share trader and has offered a total income of Rs. 13,98,55,100. The said income includes profits from share trading of Rs. 8,73,43,276/-. The profit has been resulted from innumerable transactions of purchase & ....