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The assessee was asked to provide complete details of sale and purchase of shares in the relevant per-forma vide notice u/s 142(1) dated 02.05.2014. It was noticed that the assessee had carried out share trading activity with a short interval and with huge quantity. In some of the cases, shares were not event held for 1 or 2 months. Thus, the assessee has carried out share trading activity with an intention to earn quick profit which is nothing but trading in shares liable to be taxed as business income. Therefore, the capital gain showed was treated as business income and the total income of the assessee was assessed in sum of Rs. 5,26,75,510/-. The CIT(A) confirmed the addition, thereafter, the penalty proceeding was initiated after issuance of notice and the penalty in sum of Rs. 95,05,536/- was levied. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who confirmed the penalty, therefore, the assessee has filed the present appeal before Tribunal.

Shanti Prime Publication Pvt. Ltd.

Sec. 271(1) of Income Tax act, 1961— Penalty —Assessee has offered his income from the sale and purchase of the shares transaction under the head of long/short term capital gain, however, the AO treated the same as business income on seeing the voluminous transactions of the shares and the said finding was confirmed by CIT(A) but in fact there is no concealment of income or furnishing the inaccurate particulars of income and assessee showed his income from long/short term capital gain from his share purchase transaction, however, the same was not accepted and the income from the share transaction was treated as business income and these facts nowhere attract the penalty , thus, taking into account all the facts and circumstances, the penalty is not liable to be sustainable in the eyes of law - VIDYASAGAR MAHAVIR PRASAD SAH V/s ADDI. CIT - [2020] 28 ITCD Online 078 (ITAT-MUMBAI)

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