Penalty not justified on income, taxability of which was debatable

Penalty proceeding u/s 271(1)(c ) imposed on the basis of that the assessee declared short term gains on the sale of the stock options instead of long term capital gains is not justified. The question whether the sale of the stock options would result in long term capital gains or short term gains was not very clear at the time when the respondent/ assessee filed his return for the assessment year 2002-03. In fact the view taken by the assessing officer in the quantum proceedings  had been reversed by the Commissioner of Income Tax (Appeals) in the appeal filed by the assessee. The view take...