THE COMMISSIONER OF INCOME TAX AND ORS. Vs. CHANDRASEKARAN

JUDGEMENT

(1.) THE revenue has preferred this appeal against the order passed by the Tribunal upholding the order passed by the Appellate Authority by setting aside the imposition of penalty.

(2.) THE assessee claims short term capital gain of Rs. 2,33,504/ - and long term capital loss of Rs. 12,62,883/ -. The Assessing Officer on examination of the details found that the assessee had deliberately set -off long term capital loss of Rs. 39,37,081/ - to arrive at a short term capital gain of Rs. 2,33,504/ -. After disallowing the same, an addition of Rs. 41,70,585/ - was made. However, the depreciation of Rs. 2,98,343/ - was disallowed and income of letting out property was charged under the head Income from house property". The assessee accepted those transactions and paid tax. Thereafter, the revenue initiated penalty proceedings under Section 271(1)(c) of the Income Tax Act (for short the 'Act') on the ground that the assessee has deliberately concealed the income and furnished inaccurate particulars. The assessee contested the penalty proceedings and contended that the claim for set -off is in accordance with law and that he had not noticed the impugned amendment and therefore, it is a bona fide mistake and not a case of deliberately furnishing of inaccurate particulars and submitted that the penalty proceedings should be dropped. Similarly, in respect of compensation also, it was contended that it was a bona fide mistake. However, the Assessing Authority did not accept the explanation and held that it is a case of deliberately suppressing of income and furnishing of inaccurate particulars and therefore, levied penalty.

(3.) THE substantial question of law that arise for consideration in this appeal is as under: -