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(ii) Appellant has furnished all particulars of computation of long term capital loss in original assessment proceedings u/s143(3) of the Act.

(iii). the computation error in the original return of income was bonafide human error.

(d) The learned Commissioner of Income Tax (Appeals) erred in holding that addition made is on account of contumacious conduct of the appellant in which mens rea can be reasonably inferred without appreciating the fact that:

(i) There is no addition made by the Id A.O to the total income as declared in return of income filed in response to notice u/s. 148 of the act and before receiving the reasons for reopening

I.T.A. No.5935/Mum/2014

(iv) said claim of set out of capital loss was made due to the genuine human error while finalising the computation of income

(v) that the claim was a genuine human error as the same could not be noticed even by le ld AO though scrutiny assessment was done u/s 143(3) of the act vide order dated.05.12.2007.

4. Calculation of capital loss is obvious thing. However provision treating transaction of sale of capital asset from subsidiary to holding company not as transfer is peculiar/ special provision of Income Tax Act. However, the accountant of the assessee company made a mistake of computing the same. Further, apart from the assessee even the Ld. AO who framed the original assessment order made the mistake in overlooking the provisions of section 47(v). This can be at most can be described as human error and bonafide inadvertent error. Therefore, Penalty under 271(1)(c) cannot be levied for a "bonafide /inadvertent/ human error. Reliance in this regard is placed on:

"Notwithstanding the fact that the assessee is undoubtedly a reputed firm and has great expertise available with it, it is possible that even the assessee could make a "silly" mistake. The fact that the Tax Audit Report was filed along with the return and that it unequivocally stated that the provision for payment was not allowable u/s 40A(7) indicates that the assessee made a computation error in its return of income. Apart from the assessee, even the AO who framed the original assessment order made a mistake in overlooking the contents of the Tax Audit Report. The contents of the Tax Audit Report suggest that there is no question of the assessee concealing its income. There is also no question of the assessee furnishing any inaccurate particulars. All that happened in the present case is that through a bona fide and inadvertent error failed to add the provision for gratuity to its total income. This can only be described as a human error which we are all prone to make. The calibre and expertise of the assessee has little or nothing to do with the inadvertent error. That the assessee should have been careful cannot be doubted, but the absence of due care, in a case such as the present, does not mean that the assessee is guilty of either furnishing inaccurate particulars or attempting to conceal its income. Consequently, given the peculiar facts of this case, the imposition of penalty on the assessee is not justified. "