M/S KEVAL ( INDIA ) LTD,INDORE vs. DCIT-R-1 (1), INDORE

ITA 653/IND/2017Status: DisposedITAT Indore04 April 2019AY 2007-0812 pages
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What did the Tribunal hold?

The Tribunal held that the penalty under Section 271(1)(c) was not sustainable. It reasoned that the assessee had bonafidely treated the loss as business loss, disclosed all relevant details, and the issue was debatable with two possible interpretations.

What were the facts?

The assessee company, engaged in trading grains and shares, claimed a loss on the sale of wheat as a business loss. The Assessing Officer (AO) treated this loss as speculative and initiated penalty proceedings under Section 271(1)(c). The Commissioner of Income Tax (Appeals) confirmed the penalty.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when the classification of loss as business or speculative is debatable and the assessee has made full disclosure.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 43(5)

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Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: HONBLE KUL BHARAT & HONBLE MANISH BORAD

For Appellant: Shri P.D. Nagar, C.A Date of Hearing
For Respondent: Shri K.G. Goel, Sr.DR, Shri P.D. Nagar, C.A Date of Hearing
Hearing: 28.03.2019Pronounced: 04.04.2019

PER MANISH BORAD.

The above captioned appeals are filed at the instance of the assessee pertaining to Assessment Years 2005-06 & 2007-08 and are directed against the orders of Ld. Commissioner of Income Tax

(Appeals)-III (in short ‘Ld.CIT(A)’], Indore dated 03.02.2017 which is arising out of the order u/s 271(1)(c) of the Income Tax Act 1961(In short the ‘Act’) dated 28.03.2013 framed by DCIT-1(1), Indore.

Keval (India) Ltd ITA No.652 & 653/Ind/2017

2.

Assessee has raised following grounds of appeal;

Assessment Year 2005-06

1.

That the learned CIT (A) erred in confirming the penalty u/s 271 ( 1 ) ( C ) of the Act, Rs. 64330

The order continues below.

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