TaxTMI 
TaxTMI 
2025 (11) TMI 1412
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....w and in facts in holding that the surrender of income by the assessee discharges him from the penal consequences under section 271(1)(c) of the Act, without appreciating the fact that the surrender was not voluntary but was made only after detection by the department. 3. Whether the Ld. CIT(A) has erred in law in ignoring the binding judgment of the Hon'ble Supreme Court in the case of MAK Data Pvt. Ltd. vs. CIT-II (2013) 358 ITR 593 (SC), wherein it was held that voluntary disclosure does not release the assessee from the rigours of penalty under section 271(1)(c) of the Act. 4. Whether the Ld. CIT(A) has failed to consider that the transactions relating to Long-Term Capital Gains from penny stock (NCL Research and Financial Services Ltd.) were found to be nongenuine and were used as a colorable device to convert unaccounted money into tax-exempt income, which clearly amounts to furnishing of inaccurate particulars of income. 5. Whether the Ld. CIT(A) has erred in holding that the penalty was wrongly levied despite clear satisfaction recorded by the Assessing Officer in the penalty order that the assessee had furnished inaccurate particulars of inco....
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....ases were being made through Victor Commodeal Pvt. Ltd. Kolkata and not through recognized Stock Exchange. A letter was issued to the said company which was returned back from the postal authority with remarks, 'Receiver, 6, Braboum Road, Room No. G/9 Kol refused due to no such addressee in this address. During the course of assessment proceedings, it was found that the assessee opened a DEMAT account in Microsec Capital Ltd. on 9.8.2013 and the said scrip was dematerialized on 27.8.2013 in Microsec Capital Lad through Eureka STK and SH BKG SERV. The details of scrips credited from the said concerns were not explained by the assessee. It was also noticed that out of the said scrips 200 scrips were sold on 17.9.2017 just after 20 days only by Microsec Capital Ltd. and remaining shares i.e. 900 were first transferred from the account of Microsec Capital Ltd. to the account of Asthvinayak Stock Broking Pvt. Ltd. through East India Sec. Ltd. and thereafter sale was made. The explanation was not furnished by the assessee as to why the said transactions were made through this pattern. As also, the sale rate of first sold 200 scrips was Rs.1983 per share and remaining sold for Rs. 149....
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....isclosure of its income, it would have filed the return declaring an income accordingly, which was surrendered later during the course of assessment proceedings. The law does not provide that when the assessee makes a surrender of his concealed income, he is absolved from penalty. In view of the above facts, it is clear that the assessee has furnished inaccurate the particulars of his income and liable to be penalized under section 271(1)(c) of the Income tax Act, 1961. Therefore, I levy a penalty of Rs.536500/-being 100% of the tax sought to be evaded." 4. Against the penalty order, the Ld. CIT(Appeals)/NFAC while allowing the appeal of the assessee observed and held as follows: "Appellant in his submission stated that the assessee has withdrawn claim of exemption u/s.10(38) of the Act. Penalty u/s. 271(1)(c) of the Act is leviable for furnishing inaccurate particulars and concealment of income. No penalty is leviable for making a claim which is found incorrect. On merit, it is seen that assessee has surrendered his claim of long term capital gain which was made in the ROI. No enquiry to disprove the documents filed by the assessee has been made. Just because ....
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....f IWs operator in connivance with business man looking to introduce their cash as long term capital gain. AO has also discussed the abrupt movement of share prices of this share in stock market, the financials of the shares and enquiry of Investigation wing Kolkata into 84 scrips which were used by certain persons to artificially show LTCG by business man. Statement of certain persons were recorded who were involved for causing movement in the share prices and facilitating of buying and selling shares. However, there are no facts to establish the involvement of the assessee and collusion with these persons. In the stock market a share can be bought or sold by any person online. However every person who has bought or sold a share has done so with ulterior motive, such a conclusion cannot be derived without bringing on record facts to this effect and to show that assessee has acted in collusion with these persons. As held in Dilip N. Shroff vs JCIT (2007) 291 ITR 5r9, 547 (SC), only on the basis of finding in assessment proceeding, penalty cannot be levied automatically. In case of Shadilal Sugar & General Mills Ltd vs CIT 168-ITR 705 SC 1987, the Hon'ble Supreme Court has observ....