The Tax Publishers2019 TaxPub(DT) 1657 (Mum-Trib)

INCOME TAX ACT, 1961

Section 271(1)(c)

Mere change of head of income should not result in automatic levy of penalty and details about 'business loss' or 'Short-Term Capital Loss' were available on the record, therefore, it could not be said that assessee had filed 'Inaccurate Particulars of Income' and penalty under section 271(1)(c) could not be levied.

Penalty under section 271(1)(c) - Change of head of income - Assessee claimed transactions relating to mutual fund constituted part of his business and loss to be treated as its business loss -

Assessee-company was engaged in business of trading in commodities and claimed the transactions relating to mutual fund constituted part of his business and loss to be treated as its business loss. AO treated the loss as 'Short Term Capital Loss. However, no appeal was filed by assessee against the order of assessment passed by AO. During assessment proceedings, AO initiated penalty under section 271(1)(c) on the ground that assessee had furnished 'inaccurate particulars of income'. Held: Mere change of head of income should not result in automatic levy of penalty. The details about 'business loss' or 'Short Term Capital Loss' were available on record. Therefore, it could not be said that assessee had filed 'Inaccurate Particulars of Income'. Even if a unsubstantiated claim was made in the return of income, it cannot be held that assessee is liable for levy of penalty under section 271(1)(c). Difference of opinion between the AO and assessee about head of income under which 'Particular Item' was to be 'assessed' and would remain a bone of contention between AO and assessee.

Followed:<./i>CIT v. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC) : 2010 TaxPub(DT) 1683 (SC) DIT v. Administrator of the Estate of Late Mr. E.F. Dinshaw (2013) 218 Taxman 125 (Bom) CIT v. Nalin P. Shah (HUF) (2013) 40 taxmann.com 86 (Bom) : 2014 TaxPub(DT) 2652 (Bom-HC) Sesa Resources Ltd. v. Asstt. CIT (2013) 219 Taxman 92 (Bom) CIT v. M/s. Aditya Birla Nova Ltd. [ITA No. 3899 of 2010] : 2012 TaxPub(DT) 3001 (Bom-HC) CIT v. Bhartesh Jain (2010) 323 ITR 58 (Del) : 2010 TaxPub(DT) 1784 (Del-HC) CIT v. Auric Investment and Securities Ltd. (2009) 310 ITR 121 (Del) : 2009 TaxPub(DT) 0095 (Del-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :



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