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The Tax Publishers2013 TaxPub(DT) 1988 (Hyd-Trib) : (2014) 056 (II) ITCL 0040 : (2013) 025 ITR (Trib) 0086 Income Tax Act, 1961 --Penalty under section 271(1)(c)Concealment Incorrect claim of set-off of excess loss under short-term capital gains--Assessee, an Individual, deriving income from salary and other sources had filed his return admitting a certain income, which included long-term capital gains and short-term capital gains. Assessing officer noted that there was a wrong claim of set-off of excess loss under short-term capital gains which was added to the income of assessee and penalty was levied under section 271(1)(c). *Held:* Was not justified as mere making of a wrong claim by, assessee, by itself, would not constitute concealment of income or furnishing inaccurate particulars of income. The claim of the assessee could not be allowed because provisions of the Act had been amended with effect from1-4-2005 and the assessee, in considering new amendments, made a wrong claim, which was a bona fide error on the part of the assessee and could not be a reason for levy of penalty. Income Tax Act, 1961, Section 271(1)(c) In the ITAT, Hyderabad B Bench Chandra Poojari, A. M. & Asha Vijayaraghavan, J. M. Asstt. CIT v. M. Ravinder I.T.A. Nos. 1010/Hyd/2010 & 315/HydA 2011 A.Y. 2005-06 & 2006-07 31 August, 2012 Appellant by : M. Dayasagar Respondent by : A. V. Raghuram ORDER *Chandra Poojari, A. M.* Thesis two appeals by the Revenue are directed against different orders of the Commissioner (Appeals)-VI Hyderabad, dated 26-4-2010 and 15-11-2010 for the assessment years 2005-06 and 2006-07. 2. The Revenues grievance in these appeals is with regard to deletion of penalty by the Commissioner (Appeals) levied under section 271(1)(c) of the Income Tax Act, 1961. 3. The brief facts of the issue, relating to the assessment year 2005-06, are that the assessee is an individual deriving income from salary and other sources. For the assessment year 2005-06, he has filed return of income admitting an income of Rs. 3,23,47,200. This included long-term capital gain and short-term capital gains also. The assessing officer completed the assessment determining the income at Rs. 5,51,54,588. This includes securities transaction tax of Rs. 62,48,476 and disallowance under section 94 being dividends received on shares attracting short-term capital gain. During the penalty proceedings, the assessee submitted that this is the first year of assessment after introduction of provisions of taxing short-term capital gains at concessional rate wherein the securities transaction tax should not be considered. This mistake crept in inadvertently and the same continued in the subsequent year also. Therefore, the claim of securities transaction tax deduction is made by mistake and similar is the case of claim of loss in case of dividend stripping and hence accepted for addition. It was also submitted that all the facts relating to computation of income is before the assessing officer and there is no inaccuracy in the particulars inasmuch as the same details only are used to add back. However, the assessing officer, not accepting the submissions, levied penalty under section 271(1)(c) of Rs. 14,12,091 stating that claim of loss is agreed to be wrongly made. On appeal, the Commissioner (Appeals) deleted the penalty by holding that mere making of a claim by an assessee in his assessment which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars of income or concealment of income and such a claim made in the return cannot be a reason for levy of penalty under section 271(1)(c) of the Act. Against this, the Revenue is in appeal before us. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 1988 (Hyd-Trib) : (2014) 056 (II) ITCL 0040 : (2013) 025 ITR (Trib) 0086

Income Tax Act, 1961

--Penalty under section 271(1)(c)Concealment Incorrect claim of set-off of excess loss under short-term capital gains--Assessee, an Individual, deriving income from salary and other sources had filed his return admitting a certain income, which included long-term capital gains and short-term capital gains. Assessing officer noted that there was a wrong claim of set-off of excess loss under short-term capital gains which was added to the income of assessee and penalty was levied under section 271(1)(c). Held: Was not justified as mere making of a wrong claim by, assessee, by itself, would not constitute concealment of income or furnishing inaccurate particulars of income. The claim of the assessee could not be allowed because provisions of the Act had been amended with effect from1-4-2005 and the assessee, in considering new amendments, made a wrong claim, which was a bona fide error on the part of the assessee and could not be a reason for levy of penalty.

Income Tax Act, 1961, Section 271(1)(c)

In the ITAT, Hyderabad B Bench

Chandra Poojari, A. M. & Asha Vijayaraghavan, J. M.

Asstt. CIT v. M. Ravinder

I.T.A. Nos. 1010/Hyd/2010 & 315/HydA 2011

A.Y. 2005-06 & 2006-07

31 August, 2012

Appellant by : M. Dayasagar

Respondent by : A. V. Raghuram

ORDER

Chandra Poojari, A. M.

Thesis two appeals by the Revenue are directed against different orders of the Commissioner (Appeals)-VI Hyderabad, dated 26-4-2010 and 15-11-2010 for the assessment years 2005-06 and 2006-07.

2. The Revenues grievance in these appeals is with regard to deletion of penalty by the Commissioner (Appeals) levied under section 271(1)(c) of the Income Tax Act, 1961.

3. The brief facts of the issue, relating to the assessment year 2005-06, are that the assessee is an individual deriving income from salary and other sources. For the assessment year 2005-06, he has filed return of income admitting an income of Rs. 3,23,47,200. This included long-term capital gain and short-term capital gains also. The assessing officer completed the assessment determining the income at Rs. 5,51,54,588. This includes securities transaction tax of Rs. 62,48,476 and disallowance under section 94 being dividends received on shares attracting short-term capital gain. During the penalty proceedings, the assessee submitted that this is the first year of assessment after introduction of provisions of taxing short-term capital gains at concessional rate wherein the securities transaction tax should not be considered. This mistake crept in inadvertently and the same continued in the subsequent year also. Therefore, the claim of securities transaction tax deduction is made by mistake and similar is the case of claim of loss in case of dividend stripping and hence accepted for addition. It was also submitted that all the facts relating to computation of income is before the assessing officer and there is no inaccuracy in the particulars inasmuch as the same details only are used to add back. However, the assessing officer, not accepting the submissions, levied penalty under section 271(1)(c) of Rs. 14,12,091 stating that claim of loss is agreed to be wrongly made. On appeal, the Commissioner (Appeals) deleted the penalty by holding that mere making of a claim by an assessee in his assessment which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars of income or concealment of income and such a claim made in the return cannot be a reason for levy of penalty under section 271(1)(c) of the Act. Against this, the Revenue is in appeal before us.