TaxTMI 
TaxTMI 
2017 (11) TMI 1939
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....urse of assessment proceedings the Assessing Officer noticed that while computing income under the normal provisions assessee has claimed exemption of long term capital gain of Rs. 94,90,810/- under section 10(38) of the Income Tax Act, 1961. Further, While computing book profit under section 115JB the assessee has also reduced long term capital gain, thereby, not offering any income under the said provision. The Assessing Officer was of the view that in terms of proviso to section 10(38) of the Act, the assessee was required to compute book profit under section 115JB by including the long term capital gain. He, therefore, called upon the assessee to explain the reason for not including long term capital gain while computing book profit. As....
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.... Rs. 14,58,630/- under section 271(1)(c) of the Act. Being aggrieved by the penalty imposed, assessee preferred an appeal before the Commissioner (Appeals). However, learned Commissioner (Appeals) upheld the penalty imposed on the reasoning that assessee has failed to establish its bonafide for non-inclusion of long term capital gain in books profit. 3. The learned Authorised Representative submitted, in the return of income as well accompanying statements the assessee has made full disclosure of facts relating to share transaction and the long term capital gain derived there from. He submitted, since, long term capital gain from sale of equity shares is exempt under section 10(38) of the Act the assessee claimed exemption under the said p....
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....mposed. In support of such contention he relied upon the decision of the Hon'ble Supreme Court in the case of Price Waterhouse Coopers P. Ltd. v/s. CIT 348 ITR 306. He also relied upon the following decisions: - i. CIT v/s Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (SC). ii. UOI v/s Rajasthan Spinning & Weaving Mills Civil Appeal no. 3527 of 2009 (SC). iii. Dilip N. Shroff v/s JCIT 291 ITR 519 (SC) iv. CIT v/s S.M. Construction, ITA no. 412 of 2013 (Bom) v. CIT v/s Dalmia Dychem Industries Ltd. (2015) 279 CTR 133 (Bom) vi. Anoopgarh Kraya Vikraya Shahakari Samiti Ltd. v/s ACIT (2015) 374 ITR 558 (Raj.) 4. The learned Departmental Representative justifying the imposition of penalty submitted, the assessee by not inc....
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.... sale of equity shares while computing the books profit under section 115JB was due to a bona fide belief that such income is exempt. Thus, the default committed by the assessee is due to an inadvertent mistake/omission in computation of income. It is trite law that the basis for imposition of penalty under section 271(1)(c), either for furnishing inaccurate particulars of income or concealing particulars of income, is the information disclosed by the assessee in the return of income filed for a particular assessment year. Keeping in view the aforesaid legal position we are to examine whether the assessee can be charged with the offence of furnishing inaccurate particulars of income. Undisputedly, the assessee in the relevant previous year ....
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....s, the aforesaid facts would make it clear that the assessee has furnished full particulars of the income derived from sale of equity shares. Though, it may be a fact that long term capital gain from sale of shares is not exempt for computing book profit under section 115JB, however, such exemption claimed by the assessee appears to be for the reason that assessee was under a bona fide belief that, since, long term capital gain as per section 10(38) is exempt from taxation under the normal provisions of the Act, the same would also apply for computing book profit. The explanation of the assessee that non-inclusion of long term capital gain for computing book profit was due to bona fide reasons cannot be brushed aside lightly. In any case of....