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Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा लेखा सद"य लेखा लेखा सद"य सद"य राजे"" सद"य राजे"" राजे"" केकेकेके अनुसार राजे"" अनुसार अनुसार PER RAJENDRA, AM- अनुसार Challenging the orders dated 10.11.2009 of the CIT(A)- 8,Mumbai,the Assessing Officer (AO) has filed present appeal.Assessee-company,engaged in the business of shares and stock broking and share trading also,filed its return of income on 30.10.2004,declaring total income at Rs.2.83 lakhs.The AO completed the assessment u/s.143(3) of the Act on 26.12.2006, determining its total income at Rs.5.91 lakhs. Brief Facts: 2.Effective ground of appeal pertains to deletion of penalty, levied by the AO under section 271(1)(c).During the assessment proceedings, the AO held that assessee was engaged in speculative business and not in share trading and jobbing, as claimed by the assessee. Accordingly he made disallowance of the expenses towards the speculation income and invoking the provisions of section 271(1)(c ) levied a penalty of Rs. 89.53 lakhs.
3.Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority (FAA),who confirmed the order of the AO. The Tribunal (ITA/1824/ MUM/2008,dated 11/10/2013)restored back the issue to the file of the AO for fresh adjudication. In order dated 25/09/2014, passed under section 143 (3) read with section 254 of the Act, the AO held that the jobbing loss was to be allowed to be set off against the share trading profit, that assessee was deemed to be carried out speculation business in view of the Explanation to provision to section 73, that expenses allocation was to be done proportiona - 1106/Mum/10-Amu Shares & Securities Ltd. tely between the business and speculative activities, that no ShopRite disallowance was required to be made.
4.In the meanwhile,the FAA, while adjudicating the penalty – appeal, held that there was difference of opinion between the AO and the assessee about the nature of the expenditure, that the assessee had disclosed all the necessary details while filing the return, that penalty under section 271(1)(c ) was not leviable.
4.1.During the course of hearing before us, the Departmental Representative (DR) left the issue to the discretion of the bench. The Authorised Representative (AR) stated that issue has been decided in favour of the assessee by the AO himself.
5.We find that in pursuance of the order of the Tribunal, the AO has reversed the order of his predecessor.As the addition itself has been held to be not sustainable, so, penalty proceedings would not survive.Secondly, the FAA as rightly pointed out that the penalty was levied in the case under considerartion though all the necessary details were filed by the assessee and the AO had not agreed with the stand of the assessee. In our opinion, the order of the FAA does not suffer from any legal infirmity. Therefore, upholding the same, we decide the effective ground of appeal against the AO.
As a result, appeal filed by the AO stands dismissed. फलतः िनधा"रती अिधकारी "ारा दािखल क" गई अपील नामंजूर क" जाती है. Order pronounced in the open court on 04th January, 2017. आदेश क" घोषणा खुले "यायालय म" दनांक 04 जनवरी, 2017 को क" गई । ( ( ( ( पवन "सह /Pawan Singh) (राजे"" / RAJENDRA) "याियक सद"य / JUDICIAL MEMBER लेखा लेखा लेखा सद"य लेखा सद"य सद"य / ACCOUNTANT MEMBER सद"य मुंबई Mumbai; "दनांकDated : 04.01.2017. Jv.Sr.PS.