DCIT CIR 3(1), MUMBAI vs. EDELWEISS TRADING & HOLDING LTD, MUMBAI

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ITA 4653/MUM/2014Status: DisposedITAT Mumbai13 January 2017AY 2008-093 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A) rightly deleted the penalty as the disallowance was ad-hoc and there was no concealment of income or furnishing of inaccurate particulars. The case was a matter of opinion and not supported by incriminating material.

What were the facts?

The Revenue appealed against the deletion of penalty levied under Section 271(1)(c) by the CIT(A). The penalty was related to expenses claimed for speculation transactions, which the AO had disallowed on an ad-hoc basis.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when expenses related to speculation loss were disallowed on an ad-hoc basis and full disclosure was made.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” BENCH, MUMBAI

Before: SHRI D. KARUNAKARA RAO & SHRI PAWAN SINGHShri M. Murli, DR Shri Arvind Sonde

For Appellant: Shri M. Murli, DR
For Respondent: Shri Arvind Sonde
Hearing: 17.11.2016Pronounced: 13.01.2017

सुनवाई की तायीख / Date of Hearing : 17.11.2016 घोषणा की तायीख /Date of Pronouncement : 13.01.2017 आदेश / O R D E R

PER D. KARUNAKARA RAO, AM:

1.

This appeal filed by the Revenue on 07.7.2014 is against the order of the CIT (A)-6, Mumbai dated 22.4.2014 for the assessment year 2008-2009. In this appeal, Revenue raised the following grounds which read as under:- “Whether on the facts and in the circumstances of the case and in law, Ld CIT (A) has erred in deleting of the penalty levied on the assessee u/s 271(1)(c) of the Act without appreciating the fact that the claim of expenses pertaining to speculation transaction made by the assessee was not established and therefore was not allowable and making such claim amounts to the furnishing of inaccurate particulars of income within the meaning of section 271(1)(c) of the Act.”

2. At the outset, Ld Counsel for the assessee briefly narrated the facts of the case and submitted that the penalty levied on the assessee u/s 271(1)(c) of the Act is relatable to the expenditure attributable to the speculation loss reported by the assessee in the return of income. Revenue Authorities disturbed the revenue expenses based on the turnover of 5% of the expenditure attributable to the speculation loss. Agreed to the above disallowance on ad-hoc basis considering the fact that the benefits available to the assessee on the said additions in the later

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