2017 (3) TMI 672
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....lowance amounting to Rs. 1,05,743/- on account of loss incurred on purchase and sale of securities and units as per provision u/ s 94(7) of the Act. 2.0 That on the facts and in the circumstances of the case, Ld. CIT(Appeals) was not justified and grossly erred in confirming the penalty u/ s 271(1)(c) inspite of the fact that there was no concealment of income nor inaccurate particulars have been filed. 3.0 That the respondent craves leave to add, amend, modify, rescind, supplement or alter any of the grounds stated here-in-above either before or at the time of hearing of the appeal." 3. The brief facts of the case are that the assessee is a company registered under the Companies Act, 1956 and is engaged in the business of investment ....
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....5.05.2007 imposing penalty to the tune of Rs. 96,020/-. That as appearing in the order of the Ld. CIT(A) the facts observed by the AO is that the relevant assessment was completed u/s. 143(3) of the Act on 24.11.2006 making two additions viz., (i) u/s. 94(7) Rs. 1,05,743/- and (ii) u/s. 14A Rs. 1,61,907/- = Rs. 2,67,650/-. The details of reasons for additions of the above two amounts were discussed in the body of the assessment order and proceedings u/s. 271(1)(c) of the Act was initiated. In response to the notice u/s. 271(1)(c) of the Act the Director of the company submitted written explanation wherein it was claimed that though the additions were made but it only converted returned loss of Rs. 47,160/- to assessed income of Rs. 2,20,490....
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....e AO went on to impose Rs. 96,020/- as penalty u/s. 271(1)(c) of the Act. Being aggrieved, the assessee had preferred an appeal before the Ld. CIT(A) against the penalty order passed by the AO and the Ld. CIT(A) has deleted the penalty imposed on disallowance made u/s. 14A of the Act of Rs. 1,61,907/- but has confirmed the penalty imposed u/s. 271(1)(c) of the Act on addition of Rs. 1,05,747/- u/s. 94(7) of the Act and hence, this present appeal. 4. The crux of the grounds of appeal preferred by the assessee (ground nos. 1 and 2) relates to the confirmation of penalty u/s. 271(1)(c) of the Act with regard to Rs. 1,05,743/- u/s. 94(7) of the Act. That at the first appellate stage the assessee submitted the reasons on basis of which penalty ....
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....ent of transactions of mutual fund were also duly filed before the AO during the assessment proceedings as and when required. Thus, there was neither any concealment of income nor any inaccurate details/particulars were filed. The assessee further referred to the case of Hon'ble Delhi High court in CIT Vs. Vikas Promoter Pvt. Ltd. (2005) 277 ITR 337 (Del), wherein it was held that satisfaction is not to be in the mind of the AO but must be reflected from the record. The provisions of Sec. 271(1)(c) of the Act are penal in nature thus must be strictly interpreted and the element of satisfaction should be apparent from the order itself. Further reliance were placed by the assessee in the case of Ranjit Sen Vs. ACIT (1992) 40 ITD 528 (Cal-Trib....
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.... jurisdictional Tribunal had referred to the case of Nalwa Sons Investments Ltd., supra and had held the cancellation of penalty imposed by the AO u/s. 271(1)(c) of the Act by placing reliance on the decision of Hon'ble Delhi High Court. The Ld. DR, on the other hand, reiterated the submissions as have been forwarded by the subordinate authorities and placed reliance on their respective orders. 6. We have perused the case records, analyse the facts and circumstances of the case and heard the rival contentions. We arrive at our considered view that the case of the assessee is squarely covered by the decision of Hon'ble Delhi High Court which was given support by the Hon'ble Apex Court in the case of Nalwa Sons Investments Ltd., supra, and f....
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....lhi High Court further observed that in the case before them the assessee was assessed u/s. 115JB of the Act and not under normal provisions. No doubt there was concealment but that had its repercussions only when the assessment was done under the normal procedure. The assessment as per the normal procedure was, however, not acted upon. On the contrary, it is the deemed income assessed u/s. 115JB of the Act which has become the basis of assessment as it was higher of the two. Tax is thus paid on the income assessed u/s. 115JB of the Act. Hence, when the computation was made u/s. 115JB, the concealment had no role to play and was totally irrelevant. Therefore, the concealment did not lead to tax evasion at all. Therefore, penalty u/s. 271(1)....