TaxTMI 
TaxTMI 
2017 (3) TMI 1576
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....pital gains" shown by the assessee of Rs. 93,49,445/- as 'income from other sources'. Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A), who vide order 10.02.2015 dismissed the appeal of the assessee. On the treatment of capital gains as income from other sources, AO vide order dt.21.03.2013 held the assessee to be liable for penalty u/s 271(1)(c) of the Act and accordingly levied a penalty of Rs. 30,56,526/-. Aggrieved by the order of AO, assessee carried the matter before Ld. CIT(A), who vide order dt.10.02.2015 dismissed the appeal of the assessee by holding as under : "2.1.5 I have considered the facts and arguments of the Appellant. The Appellant has stated that the learned AO has merely changed the head of income under which the Appellant had declared income. There is no change in the quantum of the assessed income because of the change of the head of the income. Further, the Appellant as truly and fully furnished all the particulars of income and there is neither a case of concealment of income nor of furnishing of inaccurate particulars of income. The Appellant further submitted that merely because the Appellant's claim is not accepted, it per se ....
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....bai and on actual inquiry, it was found that there is no such office at the given address. The given address is only a mailing address, from where dak is collected at the frequent intervals. 4) The Appellant has purchased the shares in March 2004 but the payment towards the shares was made only after the year in April 2005. This has happened despite the fact that the Appellant was not known to the broker. 5) The Appellant during the search could not satisfactorily explain in response to the various question asked to him such as why he preferred to do transactions in these shares, when he had never done shares transactions before. 6) The Appellant did not know anything about these companies such as their line of business, their products or turnover or profitability etc. He stated that he transacted in the shares as per the advice of his friend. 7) The honourable ITAT did not accept the Appellant's contention that he surrendered income due to coercion. The honourable ITAT observed that the Appellant surrendered the income only after the default was confronted to him with the modus operandi adopted by him. The honourable ITAT in para 6.9 held that as the Appellant surrende....
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....additional ground. Considering the aforesaid submissions, the additional ground is admitted. Since the additional ground and the other grounds are with respect to levy of penalty and are being inter-connected, all the grounds are considered together. 6. Assessee had earned profits on sale of shares and had claimed it as long term capital gains. AO while framing the assessment order held that the transaction of purchase and sale of shares was sham transaction and colourful devise to channelize the unaccounted income and accordingly treated it as "income from other sources." Before us, Ld.A.R. submitted that assessee had neither concealed nor had furnished inaccurate particulars of income in the return of income and it was only a change of head of income under which it was assessed and that mere change of head of income does not justify levy of penalty u/s 271(1)(c) of the Act and for this proposition he placed reliance on the decision in the case of Ratanshi Dahya Patel in ITA No.1167/PN/2012 dt.19.09.2013 and Chandak Krishnagopal Motilal in ITA No.2465/PN/2012 dt.25.11.2014. Ld.A.R. further submitted that the penalty order levied by AO is bad-in-law, as there was ambiguity and n....
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....e Act and has not specified the charge for levy of penalty as the AO was himself not clear as to under which limb of Sec.271(1)(c) penalty was leviable. He therefore submitted that the penalty proceedings are initiated without application of mind by AO and therefore the penalty order levied by the AO is bad and therefore the penalty levied be deleted. Ld. D.R. on the other hand supported the order of AO and Ld. CIT(A). 7. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to the levying of penalty u/s 271(1)(c) of the Act. 8. It is an undisputed fact that while passing the assessment order u/s 143 r.w.s. 153A, AO has recorded the finding that assessee has concealed particulars of income. In the notice dt.31.12.2009 issued u/s 274 of the Act, AO has not struck off the inapplicable portion i.e., as to whether it was the case of concealment of particulars of income or furnishing of inaccurate particulars of income. We further find that in the penalty order passed u/s 271(1)(c), AO has recorded the satisfaction by stating that assessee has furnished inaccurate particulars of income and that Ld. CIT(A) while confir....