TaxTMI 
TaxTMI 
2014 (8) TMI 1237
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....roceedings 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' because according to Assessing Officer the shares were purchased for trading purposes. Further it was noticed that assessee has claimed deduction u/s 80G amounting to Rs. 5,05,000,00/- but the assessee had not filed any evidence regarding exemption u/s 80G and, therefore, this deduction was denied. Accordingly, the income was computed under the head 'business and profession' and penalty proceedings u/s 271(1)(c) of the act were also initiated. 5. In response to the show cause notice for levy of penalty, written submissions were filed through which it was mainly explained that assessee had filed all the details to justify the claim which was not accepted by the Department during the assessment proceedings but this does not mean that assessee has concealed any particulars of income. It was further stated that assessee has converted the ....
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.... the decision of Hon'ble Supreme Court in the case of CIT v Reliance Petroproducts Pvt Ltd. 322 ITR 158. He also submitted that mere change in the head of income does not lead to penalty consequences and in this regard he relied on the decision of Delhi Bench of the Tribunal in the case of CIT v JMT Advisors P Ltd (2010) 124 ITD 223(Delh). He further submitted that in similar circumstances the Hon'ble Delhi High Court in the case of CIT v Amit Jain 351 ITR 74 (Delhi) where the assessee has shown the 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 ....
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....o issuance of bonus shares and splitting of shares the value of the shares of Information Technology rose sharply and realizing that the company would be liable to pay 30 per cent tax, the assessee started claiming the profits realized from sale of these shares as long-term capital gains. After going through the entire record the Revenue authorities have come to the conclusion that the shares of Information Technology were purchased by the assessee not by way of assessment (sicinvestment) but by way of trading. This is a pure finding of fact and not of law. It is true that the principles of law have to be applied and the question as to whether certain shares had been purchased by way of trade or by way of investment may be a mixed question of fact and law but if the authorities have properly considered the legal position then the resultant finding is basically a finding of fact. In the present cases, we find no error in the orders of the Revenue. Therefore, we answer the second question against the assessee and in favour of the Revenue." 13. From the above, it becomes clear that it was a finding of fact that shares were not held as investment which was confirmed by the Hon'b....
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....iculars are found to be inaccurate, the liability would arise. The attract penalty, the 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 ITR 74 (Delhi) wherein the assessee declared an income of Rs. 2,60,73,558/- from short-term capital gains and the Assessing Officer on an interpretation of the relevant provisions and having regard to the nature of transactions assessed it as income from business. He also levied penalty under section 271(1)(c) of the Income-tax Act, 1961, to the tune of Rs.....