ASST CIT 33(1), MUMBAI vs. AMIT P. PANDYA, MUMBAI

Per Manoj Kumar Aggarwal (Accountant Member):- 1. Aforesaid appeal by revenue for Assessment Year [AY] 2009-10 contest the order of Ld. Commissioner of Income-Tax (Appeals)-45, Mumbai [CIT(A)], Appeal No. CIT(A)-45/ACIT-33(1)/ITA-187/2016-17 dated 12/12/2017 on effective grounds of appeal: - 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the penalty, without appreciating the fact that the Ld. CIT(A), has confirmed the addition made by the AO in quantum appeal.

2. On facts and in circumstances of the case, and in law, the Ld. CIT(A) erred in relying upon the case of Kanabay Software India (P) Ltd. Vs. DC1T Circle 8, Pune (2009) 31 SOT 153, Pune, 1TAT Bench and Evergreen Investment Services (P) Ltd. of the ITAT Mumbai, which do not squarely apply to the present case.

3. The appellant prays that the order of the Ld. CIT(A) on the above ground be set aside and that of the Assessing Officer be restored. 2. Facts leading to the dispute are that the assessee, a resident individual, was assessed for impugned AY u/s 143(3) on 07/12/2011 at Rs.66,720/- as against returned income of Rs.58,860/- e-filed by the assessee on 30/09/2009. The assessee reflected Short Term Capital Losses of Rs.149.94 Lacs and Long-Term Capital Losses of Rs.11.90 Lacs. These losses were related to dealing in shares & securities. After examining these transactions, Ld. AO came to a conclusion that loss reflected under the head Capital Gains were to be treated as Business losses. Another addition for Rs.7,863/- was also made in the hands of the assessee, being interest reflected in AIR information but which was not offered to tax by the assessee. The stand of Ld. AO has since been confirmed by Ld. first appellate authority. 3. Accordingly, penalty proceedings u/s 271(1)(c) were initiated in quantum assessment order on both these counts for furnishing of inaccurate particulars of income. In the penalty proceedings, the assessee was saddled with impugned penalty of Rs.50.03 Lacs u/s 271(1)(C) by Ld. Assessing Officer vide penalty order dated 29/03/2016. 4. The assessee contested the imposition of penalty before Ld. first appellate authority with success vide impugned order dated 12/12/2017. The Ld. CIT(A) deleted the penalty qua change of head of losses in view of the fact that there was mere change of head of income under which the loss