The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) while deleting the penalty against the assessee ruled that mere making of unsustainable claims does not amount to furnishing inaccurate particulars regarding Income.
The assessee company, Tecnotree Convergence Ltd. had disclosed these transactions and from the details furnished by the assessee, the AO has come to the conclusion that capital loss to the extent of dividend income claimed exempt cannot be allowed. He submitted that there was no furnishing of any inaccurate particulars or concealment of income of the assessee.
Regarding the levy of penalty for a claim of short term capital loss by invoking the provisions of section 94(7) of the Act, the assessee submitted that the assessee company had disclosed these transactions and from the details furnished by the assessee, the AO has come to the conclusion that capital loss to the extent of dividend income claimed exempt cannot be allowed. He submitted that there was no furnishing of any inaccurate particulars or concealment of income of the assessee.
The coram headed by the Vice President, N.V.Vasudevan and Accountant Member Chandra Poojari ruled that to attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous. 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 making 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.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
