No penalty can be levied if addition is made merely because of change in head of income:

Appellant had shown certain income on sale of shares as long term capital gain and certain part of income as income from speculative business of trading in shares. AO treated the said capital gain as speculation income, made an addition in respect of the same and levied penalty. Hon’ble ITAT observed that transactions in respect of shares were duly disclosed at the time of filing return of income. Appellant had disclosed names of the companies, description of shares, date of transfer of shares, sale consideration, cost of acquisition and the indexed cost. Accordingly, the appellant had worked out long term capital gain. Explanation offered by the appellant was not found satisfactory by AO and therefore he treated the same as speculation income. But there was no allegation as to concealment of facts or dealings in sham transactions. Since the addition was made merely because of change in head of income, penalty was deleted.

[M/s. Crown Tradelink Pvt. Ltd. vs. ACIT – ITA No.2768/Ahd/2012]