M/S. KRISHNA SOYA PRODUCTS PVT. LTD,INDORE vs. THE DCIT CIRCLE 1(1), INDORE

ITA 496/IND/2015Status: DisposedITAT Indore28 September 2017AY 2009-109 pages
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What did the Tribunal hold?

The Tribunal held that penalty under Section 271(1)(c) cannot be levied when the issue is debatable and the assessee has made a full and true disclosure of facts. The mere reclassification of loss from business to speculative by the AO, without concealment or furnishing inaccurate particulars, does not warrant penalty.

What were the facts?

The assessee claimed a loss on forward booking of oil contracts as a business loss. The Assessing Officer (AO) treated these transactions as speculative and disallowed the loss, initiating penalty proceedings under Section 271(1)(c). The Commissioner (Appeals) upheld the penalty, stating the assessment order had become final.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when the classification of loss as speculative is debatable and the assessee has disclosed all facts.

Which sections of the Income-tax Act were involved?

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

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Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI C.M. GARG & SHRI O.P.MEENA

Hearing: 28.09.2017

PER O.P. MEENA, AM.

This appeal filed by the Assessee is directed against the order of ld. Commissioner of Income-tax (Appeals)-1, Indore [in short referred to as the CIT (A)] dated 23.02.2015 pertaining to Assessment Year 2009-10. M/s. Krishna Soya Products Pvt.Ltd v DCIT(Appeals-I) ITA No.496/Ind/2015 A.Y. 2009-10 2. Ground No.1 and 2 relates to levy of penalty of Rs.5,10,000/- u/s 271(1)(c) of the I.T. A

The order continues below.

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