TaxTMI 
TaxTMI 
2019 (3) TMI 1650
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....mation of penalty of Rs. 1,68,52,242/- by Ld. CIT(A) as levied by the AO under section 271(1)(c) of the Act by while the show cause notice issued under section 274 read with section 271 of the Act dated 28.03.2013 is null and void. 3. The facts in brief are that the assessment under section 143(3) of the Act was framed vide order dated 28.03.2013 assessing the income at nil as against the return loss of Rs. 7,43,70,000/- in the original return income filed on 15.10.2010. In the assessment framed by the AO , the purchase and sale of shares of M/s. SKS Ispat and Power Ltd. were held to be sham transactions and consequently , the said loss was not allowed to be carried forward. 4. In the assessment framed under section 143(3) of the Act,....
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....he said company was even listed in the exchange , the assessee decided to sell the shares and accordingly sale was made to various parties which has resulted in a long term loss of Rs. 7,43,70,000/- after indexing the cost of purchase. The details of shares sold to various companies have been given by the AO in penalty order at para 2.1. Ultimately , the AO, not treating the long term capital gain as genuine, rejected the contentions of the assessee and carry forward of the same was denied. 6. In the appellate proceedings, the Ld. CIT(A) after taking into account the submissions and contentions of the assessee dismissed the appeal by observing and holding as under: "6.4.1 I agree with the contention of the AO that the appellant&....
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....said company was not a listed company and assessee was facing problems in selling these shares in the open market. All the calculations and projections made by the assessee at the time of purchase of shares at Rs. 50 (face value 10 premium 40) were went wrong. These shares were purchased on 06.09.2004 by way of allotment and thereafter continued to be shown as long term investments in the balance sheets of this company in the subsequent years and sold to Vignesh Steel Pvt. Ltd. on 12.03.2010 at face value of Rs. 10/-. The Ld. A.R. filed a copy of confirmation from the said buyer at page No.18 of the paper book. The Ld. A.R. submitted that the observations of the AO and Ld. CIT(A) that no information/details were furnished before them wer....
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....of shares are bogus and sham is wrong and against the facts on record and may kindly be deleted. The Ld. A.R. also referred to the notice issued under section 274 read with section 271 of the Act dated 28.03.2013 wherein the Ld. A.R. pointed out that AO has issued notice in a mechanical manner without application of mind as it is specified whether the penalty is being proposed to be levied for concealment of income or for furnishing of inaccurate particulars of income. The Ld. A.R. also took us through the assessment order wherein it is stated that notice is being issued under section 274 read with section 271(1)(c) of the Act and in para 3.9 of the assessment order, the AO stated that the sale transactions of shares by the assessee were he....
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....tioned and notice is issued in a mechanical manner and submitted that in view of the ratio laid down by Hon'ble Bombay High Court, the order of learned CIT(A) may be set aside and the Assessing Officer be directed to deleted the penalty. 8. The Ld. D.R., on the other hand, relied heavily on the order of Ld. CIT(A) and submitted that the order of the AO was rightly upheld by Ld. CIT(A) as the share transactions with M/s. SKS Ispat and Power Ltd. were sham transactions and therefore penalty was rightly levied. So far as the non striking of the one of the two limbs are concerned, the Ld. D.R. submitted that this is just a clerical mistake on the part of the AO and can not be taken as fatal to the penalty order. The ld Dr further contend....