TaxTMI 
TaxTMI 
TaxTMI 
2014 (8) TMI 1237
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....is as under:- On the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals), Shimla, has grossly erred both in law and on facts of the case in confirming the penalty of Rs. 1,26,98,414/- imposed by the learned Deputy Commissioner of Income-tax, Parwanoo, u/s 271(1)(c) of the Income-tax Act, 1961. 4. After hearing both the parties, we find that during assessment proceedings the Assessing Officer noticed that assessee has declared income under the head 'capital gains'. It was further noticed that assessee was engaged in the business of investment as well as trading of shares. After detailed discussion, the income from capital gain was held to be assessable under the head 'income from business and profession'....
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....herefore, penal provision are clearly attracted and accordingly he levied minimum penalty amounting to Rs. 1,26,98,414/-. 8. On appeal before Ld. CIT(A), the submissions made before Assessing Officer were reiterated and it was further submitted that in fact no deduction u/s 80G was claimed because the amount of donation was added back in the computation by the assessee itself. Certain case laws were also relied. 9. The Ld. CIT(A) after considering the submissions did not find force in the same and confirmed the action of the Assessing Officer. 10. Before us Ld. counsel for the assessee submitted that before 31.3.1999, the assessee was doing the business of sale and purchase of shares and shares were reflected in the balance sheet as stoc....
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....he income under the head 'short term capital gain' but the same was assessed to the head 'business income', the penalty was held to be not justified. 11 On the other hand, the Ld. DR submitted that assessment to gains from the shares was made by the Assessing Officer under the head 'income from business and profession' and this decision was confirmed by the Tribunal as well as by the Hon'ble High Court of Himachal Pradesh. He then referred to the decision of Hon'ble High Court of Himachal Pradesh in assessee own case reported at 235 CTR (HP) 273 and particularly invited our attention to para 19 wherein it is clearly observed that it was only assessee who really can tell the facts whether shares were held as investment or stock in t....
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....investment. In the P&L a/c in the year ending 1995-96 the assessee suffered loss of Rs. Five lacs on the shares. It had also received some income. The loss in the sale of shares was adjusted against the income by treating it as a loss from business. The entire holding of the assessee company in various shares including the shares of the company sale of which led to the profit with which we are concerned were valued and reflected as stock-in-trade. Similar is the position for the asst. yrs. 1996-97, 1997-98 and 1998-99. It is only thereafter that the assessee started reflecting the stock of shares of Information Technology under the head of investment. Earlier in the year 1998-99 the profit made from the sale of shares of this very company (....
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.... has changed that treatment would not attract the penal action. The Hon'ble Supreme Court in the case of Cement Marketing Co. of India Ltd v Assistant Commissioner of Sales Tax 124 ITR 15 observed as under:- "If the view canvassed on behalf of the Revenue were accepted, the result would be that even if the assessee raises a bonafide contention that a particular item is not liable to be included in the taxable turnover, he would have to show it as forming part of the taxable turnover, he would have to show it as forming part of the taxable turnover in his return and pay tax upon it on pain of being held liable for penalty in case his contention is ultimately found by the court to be not acceptable. That surely could never have been int....
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.... details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous." 14 In the case before us, the assessee has duly disclosed the facts regarding sale of shares but the only difference is that since shares were treated as investment, therefore, gains were declared under the head 'capital gain' whereas same were assessed as income from business and profession by the Assessing Officer. This cannot be called to be a case of concealment of income or furnishing of inaccurate particulars of income. 15. In any case merely the change in the heads of income would not lead to levy of penalty u/s 271(1)(c) of the Act. In this regard the Hon'ble Delhi High Court in the case of CIT v Amit Jain 351....