IN THE INCOME TAX APPELLATE TRIBUNAL
BEFORE SHRI G.D.AGRAWAL, VICE PRESIDENT AND
SHRI RAJPAL YADAV, JUDICIAL MEMBER
ITA No.3989/Del/2011
Assessment Year: 2005-06
Deputy Commissioner of Income Tax,
Circle-3(1),
(Appellant)
Vs.
M/s CNB Finwiz Limited,
4318/3,
Darya Ganj,
PAN: AABCB2613A.
(Respondent)
Appellant by: Shri Vikas Suryavanshi, Sr.DR.
Respondent by: Shri K.C.Jain, Advocate.
ORDER
PER G.D.AGRAWAL, VP:
This appeal by the Revenue is directed against the order of learned CIT(A)-VI,
2. The Revenue has taken the following ground of appeal:-
“The ld.CIT(A) has erred on facts and in law in deleting penalty amounting to Rs.2189177/- imposed u/s 271(1)(c) of the I.T.Act ignoring that the quantum additions in this case had been confirmed by the ld.CIT(A) and the Department is contesting deletion by Hon’ble ITAT.”
3. At the outset, the learned counsel for the assessee submitted that the assessee had filed an appeal before the ITAT being aggrieved by the order of learned CIT(A) who had treated the short term capital gains of `82,32,316/- as business income. The ITAT, vide its order dated
“The assessee has maintained investment portfolio as well as trading portfolio. The shares in the investment portfolio have been held in Demat account. Therefore, profit on sale of shares will be assessable under the head ‘short term capital gain’ and not as business income. The assessee’s case is squarely covered by the decision of Hon’ble Bombay High Court in the case of Gopal Purohit Vs. JCIT (supra). In view of the above discussion, it is held that the profits earned on sale of shares held as investment will be assessable under the head ‘short term capital gains’ and not as ‘business income’. We, therefore, decide this issue in favour of the assessee.”
4. The learned counsel placed on record the order of the Tribunal dated
5. The learned DR relied upon the order of Assessing Officer.
6. We have carefully considered the submissions of both the sides and perused the material placed before us. In this case, the disallowance made by the Assessing Officer and sustained by the learned CIT(A) was challenged by the assessee before the ITAT in an appeal. The ITAT has decided the said appeal in favour of the assessee. Therefore, at present, when the addition itself has been set aside, there cannot be any case for levy of penalty for concealment of income. Even otherwise, on merits also, the issue is covered in favour of the assessee by the decision of Hon’ble Apex Court in the case of CIT Vs. Reliance Petroproducts Pvt.Ltd. (supra) wherein their Lordships held as under:-
“Where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c). A mere taking of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars.”
7. The ratio of the above decision would be squarely applicable to the facts of the case under appeal because there is no case of the Revenue that the assessee furnished any incorrect or erroneous facts before the Assessing Officer. In view of the above factual and legal position, we do not find any justification to interfere with the order of learned CIT(A). The same is sustained and Revenue’s appeal is dismissed.
8. In the result, the appeal of the Revenue is dismissed.
Decision pronounced in the open Court on conclusion of hearing on
Sd/- Sd/-
(RAJPAL YADAV) (G.D.AGRAWAL)
JUDICIAL MEMBER VICE PRESIDENT
Dated: 15.05.2012
VK.
Copy forwarded to: -
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT
Assistant Registrar
