Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessee - Firm, controlled by members of a family K, was carrying on business, inter alia, as a dealer in shares - Assessee purchased certain shares of a tea company at rate of Rs. 121.20 and came to hold controlling interest in that company - Thereafter directors of tea company resigned and K family members were appointed as directors - Subsequently assessee sold all its shares of tea company to K family members at rates varying from Rs. 50 to Rs. 80 per share - In relevant assessment year assessee revalued its share value of aforesaid tea company and claimed deduction of loss on account of sale of aforesaid shares - Assessing authority, however, rejected assessee's claim - On appeal tribunal also held that all facts were known to assessee in spite of which assessee consciously and deliberately claimed a loss on revaluation of said shares and thereby deliberately reduced its income for assessment year in question - Whether in view of finding of tribunal and in view of fact that no further material was produced by assesses in penalty proceedings, penalty under section 271(1)(c) was rightly imposed on assessee for concealing its income and consciously furnishing inaccurate particulars of income with pre-meditation and calculation - Held, yes Facts The assessee-firm, controlled by the members of a family K, was carrying on, inter alia, business as a dealer in shares. The assessee purchased certain shares of a tea company not quoted in the share market at the rate of Rs. 121.20. At the same time B, a company controlled by the K family purchased certain shares of the above tea company. By reason of aforesaid purchases the K family came to hold the controlling interest in the tea company. Thereafter, the directors of the tea company resigned and at their place, the K family members were appointed as directors. Subsequently, the assessee sold all its shares to different members of K family who were all partners of the assessee at rates varying from Rs. 50 to Rs. 80 per share. In the relevant assessment years the assessee revalued its shares' value and claimed deduction in respect…

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