THE COMMISSIONER OF INCOME TAX vs. SPFL SECURITIES LTD.

IN THE HIGH COURT OF DELHI AT NEW DELHI . 20.08.2009 . Present: Ms. Rashmi Chopra, Advocate for the appellant. . + I.T.A. No. 778/2009 . The penalty proceedings initiated against the respondent- assessee resulted in imposition of penalty under Section 271(1)(c) of the Income Tax Act have been set aside by the CIT(A) as well as by the I.T.A.T. The assessee had claimed loss of sale of shares as trading loss in its return. The Assessing Officer, however, treated it to be a speculative loss and not the trading loss and while making the assessment order the Assessing Officer also . . supported the penalty proceedings as stated above. The CIT(A) as well as the Tribunal returned the finding that the claim made by the assessee, on the aforesaid account was a wrong scheme but cannot be treated as a false claim as is clear from the order of the I.T.A.T.: ?5. It is clear from the facts narrated above that the assessee had undertaken delivery-based share transactions, leading to loss of Rs.30,68,331/-. It is not the case of the revenue that the loss was bogus or the transactions were bogus. The provision contained in the Explanation to section 73 was invoked to hold the loss to be speculation loss. This finding has been upheld by the Tribunal. However, whether dealing in shares in case of a company, leading to loss, will result into business loss or speculation loss, is a controversial matter and elaborate tests have been laid down to decide the issue in different contexts in different case laws. Therefore, making a claim of the loss as business loss does not per se lead to the conclusion that any false claim was made. In our view, such a claim may be a wrong claim, but the same is not a false claim. In any case, the transactions were truly disclosed and there is no adverse finding by the lower authorities in assessment order or in penalty order in this behalf. In view thereof, we tend to agree with the learned CIT(A) that this is not a fit case for levy of penalty, as no inaccurate particular of income was furnished.? . We are of the opinion that no substantial question of law arises. Dismissed. . A.K.SIKRI, J . . VALMIKI J.MEHTA, J . August 20, 2009 Ne . . # 7