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Income Tax Appellate Tribunal, MUMBAI BENCHES “A” MUMBAI
Before: SHRI MAHAVIR SINGH & SHRI N.K. PRADHAN
ORDER
PER N.K. PRADHAN, AM
This is an appeal filed by the assessee. The relevant assessment year is 2009-10. The appeal is directed against the order of the Commissioner (Appeals) – 39, Mumbai and arises out of penalty u/s 271(1)(c) of the Income Tax Act, 1961 (the “Act’’).
The grounds of appeal filed by the assessee read as under:-
i. On the facts and circumstances of the case and in law the Learned CIT(Appeals) erred in upholding the penalty of Rs. 1,50,000/-. a. Merely on the ground that the brokerage of Rs. 1,85,000/- claimed was legally non permissible, ignoring the fact that the said claim was made under bonafide belief and all the facts had been disclosed during the course of the assessment and details furnished in the return of income filed. b. Further, the Ld. CIT(A) has erred in upholding penalty on account of disallowance of speculation loss of Rs. 1,90,491/- merely on the ground that the return of income had been filed in a lackadaisical manner ignoring the fact that the appellant at the time of assessment had voluntarily submitted the day to day statement of transaction of shares during the course of assessment and disclosed that the loss from shares had been wrongly claimed as trading loss instead of speculation loss. In a nutshell, the facts are that the Assessing Officer (AO) 3. noticed during the course of assessment proceedings that the assessee had deducted brokerage of Rs. 1,85,000/- from the house property. Since this is not allowable, the AO disallowed the same and added it back to the income from house property. 3.1 During the course of assessment proceedings, the assessee submitted before the AO that the business loss also included loss from speculative transaction in shares of Rs. 1,90,491/- and requested to allow this to be carried forward to the subsequent years for adjustment. Accordingly the AO reduced loss of Rs. 1,90,491/- from the business loss claimed by the assessee and allowed it to be carried forward as speculation loss. 3.2 Then the AO imposed a penalty of Rs. 1,50,000/- u/s 271(1)(c) on the above amount of Rs. 3,75,491/- (Rs. 1,85,000/- plus Rs. 1,90,491/-).
The assessee preferred an appeal before the learned CIT(A). We find that the learned CIT(A) relying on the judgement of the Hon'ble Delhi High Court in the case of Zoom Telecommunications Ltd. (327 ITR 510) confirmed the penalty of Rs. 1,50,000/- imposed by the A.O.
Before us, the learned counsel of the assessee relies on the judgement of the Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproducts P Ltd. (2010) 322 ITR 158 (SC) and Delhi High Court in the case of CIT vs. Auric Investment & Securities Ltd. (2009) 310 ITR 121 (Del).
The learned DR supports the order passed by the learned CIT(A).
We have heard the rival submissions and perused the relevant material on record. In the case of Reliance Petroproducts P. Ltd. (supra), the Hon'ble Supreme Court has held as under: Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the revenue, that, by itself, would not attract the penalty under section 271(1)(c). If the contention of the revenue was accepted, then in case of every return where the claim made was not accepted by the Assessing Officer for any reason, the assessee would invite penalty under section 271(1)(c). That is clearly not the intendment of the Legislature. 7.1 We also find that in the case of Auric Investment & Securities Ltd. (supra), the Hon'ble Delhi High Court has held as under: The assessee vide its letter filed during the course of assessment proceedings, submitted the details of transaction, it is clear from the record that all the requisite information as required by the AO, was furnished by the assessee. There is nothing on record to show that in furnishing its return of income, the assessee has either concealed his income or has furnished any inaccurate particulars of income. The mere treatment of the business loss as speculation loss by the AO does not automatically warrant inference of concealment of income. The assessee did not conceal any particulars of income, as he filed full details of the sale of shares. In any case, it cannot be said that the assessee has concealed any particulars so far as its computation of income is concerned and as such provision of s.271(1)(c) are not attracted there is no infirmity in the reasoning given by the Tribunal. The above being the position, no fault can be found with the view taken by the Tribunal. Thus, the order of the Tribunal does not give rise to a question of law, much less a substantial question of law, to fall within the limited purview of s.260A.
Respectfully following the decisions mentioned at para 7 & 7.1 here-in-above, the penalty of Rs. 1,50,000/- imposed by the A.O. u/s 271(1)(c) is deleted.
In the result, the appeal is allowed. Order pronounced in the open court on 16/01/2017