TaxTMI 
TaxTMI 
2017 (11) TMI 212
X X X X Extracts X X X X
X X X X Extracts X X X X
.... assessment year 2004 - 05 has been confirmed. 2. The brief facts of the case are that the assessee company had filed its return income at Rs. 76,93,966/- and the assessment was completed under section 153A/143 (3) of the Income Tax Act, 1961 at Rs. 2,41,80,260/-. The assessee had claimed short-term capital loss of 1,64,55,925/- on sale of units/mutual funds which was disallowed by the AO under section 94 (7) of the Income Tax Act, 1961 while making the assessment. On appeal before the Ld. CIT (Appeals), the Ld. CIT (Appeals) restricted the addition to the extent of dividend earned by the assessee on units/mutual funds amounting to Rs. 43,07,699/-. The AO proceeded to impose penalty of Rs. 15,45,387/- under section 271(1)(c) of the Incom....
X X X X Extracts X X X X
X X X X Extracts X X X X
....capital gains against short-term capital loss arising on redemption of various mutual funds/units. It was submitted that the claim for the adjustment of loss arising on redemption of units against the capital gain was made as the assessee was unaware of the provisions of section 94 (7) of the Income Tax Act, 1961 and, therefore, it was a bona fide inadvertent error committed by the assessee and no penalty was leviable in the facts and circumstances of the case. It was further submitted that the provisions of section 94 (7) are deeming provisions and in the normal course the loss arising on redemption of units is admissible. It was submitted that the assessee had furnished full details and particulars of its income while filing the return of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l Representative submitted that the penalty imposed and as confirmed by the Ld. CIT (Appeals) should be upheld. 5. We have heard the rival submissions and carefully perused the relevant material placed on record. We would like to refer to the decision of the Hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts (P.) Ltd. reported in 322 ITR 158, wherein the Hon'ble Court, while interpreting the provisions of section 271(1)(c) of the Act, held that a glance at the said provision would suggest that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly, as per the Hon'ble Apex court, the assessee must have furnished inaccurate particulars of his income. In the facts....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rrect and, accordingly, held that, prima facie, the assessee could not be held guilty of furnishing inaccurate particulars. The Hon'ble Court dismissed the contention raised by the counsel for the revenue that "submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income". The Hon'ble Apex Court held that in order to expose the assessee to the penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. It was the Hon'ble Court's dicta that by any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. Therefore, it is obvious that it must be shown that the conditions under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the word "particulars" used in the section 271 (1) (c) would embrace the meaning of the details of the claim made. It is an admitted position in the present case that no information given in the return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The learned counsel argued that "submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income." We do not think that such can be the interpretation of the concerned words. The words are plain and simple. In order to expose the assessee to t....