THE DCIT, CIRCLE-3(1), BARODA vs. SHRI HARESHKUMAR A. KESHWANI, BARODA

The roots for the levy of penalty lie in the assessment order dated 25.11.2010 framed u/s. 143(3) of the Act. The returned short term capital gain shown by the assessee at RS. 4147280/- was assessed as business income and penalty u/s. 271(1)(c) of the Act has been levied accordingly.

Before the ld. CIT(A), it was strongly contended that the assessee had furnished all the explanations and details in support of its claim of Short Term Capital Gain. However, the contentions of the assessee were dismissed by the A.O. who was of the firm belief that the assessee was trading in shares and, therefore, any gains earned by the assessee has to be taxed under the head business income. It was firmly stated that the assessee has furnished all the details relating to the share transactions and, therefore, it cannot be said that the assessee has furnished inaccurate particulars of the income leading to concealment of income. The ld. CIT(A) was convinced with the contention of the assessee and the penalty so levied was deleted.

Before us, the ld. D.R. strongly supported the findings of the A.O. None appeared on behalf of the assessee and we therefore decided to proceed ex parte.

A perusal of the record shows that the assessee in his return of income has furnished complete details relating to the sale transactions of shares. We further find that even during the course of the assessment proceedings, the assessee furnished all the related documents to support his claim of Short Term Capital Gain. However, the A.O. has simply changed the head of income from capital

In the result, the appeal filed by the Revenue is dismissed.