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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: Shri Mahavir Singh & Shri G Manjunatha
Date of hearing 21-11-2017 Date of pronouncement 21-11-2017 O R D E R
Per G Manjunatha, AM :
This appeal filed by the revenue is directed against the order of the CIT(A)-20, Mumbai dated 04-01-2012 and it pertains to AY 2006-07. The revenue has raised the following grounds of appeal:-
“1 On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) was correct in deleting the penalty levied u!s.271(i)(c) even though the activity of purchase and sale of shares in systematic and regular manner with high frequency and volumes throughout the year was held by the AO & Ld. CIT(A) as business-income as per -Explanation 1 t section 271(1)(c) the assessee has concealed income to the extent ?”
2 ITA 2084/Mum/2012 2. The brief facts of the case are that the assessee filed its return of income for the assessment year 2006-07 on 29-11-2006 declaring total income at Rs.1,57,60,580. The assessment was completed u/s 143(3) on 26-12-2008 determining the total income at Rs.1,57,70,160. During the year under consideration, the assessee has declared income from share transaction under the head ‘capital gains’ whereas the AO has treated the income from sale of shares under the head ‘Income from business’. Thereafter, the AO initiated penalty proceedings u/s 271(1)(c) for furnishing inaccurate particulars of income and levied penalty of Rs.35,48,234 being 100% of tax sought to be evaded. Aggrieved by the penalty order, assessee preferred appeal before CIT(A). Before the CIT(A), the assessee has taken a plea that the AO was erred in levying penalty u/s 271(1)(c) towards addition made on account of change in head of income from capital gain to ‘Income from business’. The CIT(A), for the detailed reasons recorded in his order dated 04-01-2012 deleted the penalty levied by the AO. Aggrieved by the order of the CIT(A), revenue is in appeal before us.
The Ld.AR for the assessee, at the outset, submitted that the appeal filed by the revenue challenging the order of CIT(A) deleting the penalty levied u/s 271(1)(c) is not sustainable in law as the quantum appeal filed by the assessee has already been allowed by the ITAT, Mumbai Bench ‘A’ in ITA
3 ITA 2084/Mum/2012 No.2265/Mum/2010 dated 28-09-2016. The Ld.AR further submitted that the issue, whether surplus from sale of shares is taxable under the head ‘Income from business’ or under the head ‘Income from capital gain’ has been decided by the ITAT in assessee’s favour. Once the addition on which penalty has been levied itself has been decided in favour of the assessee, penalty levied by the AO on the same addition is not sustainable.
The Ld.DR, on the other hand, has fairly accepted that the quantum appeal has been decided in favour of the assessee by the ITAT in ITA No.2265/Mum/2010.
We have heard both the parties and perused the material available on record. The co-ordinate bench of ITAT, Mumbai A-Bench has already decided the issue of addition made by the AO towards surplus from sale of shares as assessable under the head ‘Income from capital gains’ or ‘Income from business’. The co-ordinate bench in dated 29-10-2016 held that the profits on sale of shares is assessable under the head short term capital gain / long term capital gain, as the case may be. Once the addition on which penalty has been levied u/s 271(1)(c) has been deleted by the ITAT, there is no scope for the AO to levy concealment penalty. Therefore, we uphold the order of CIT(A) in deleting the penalty u/s 271(1)(c).
In the result, appeal filed by the revenue is dismissed.
4 ITA 2084/Mum/2012 Order pronounced in the open court on 21st November, 2017.