ASHA MANJARI MISHRA,BHUBANESWAR vs. ACIT, BHUBANESWAR

ITA No.363/CTK/2015 is filed by the assessee against the order of CIT(A)-2, Bhubaneswar, dated 22.5.2015, in confirming the levy of penalty

of Rs.5,69,730/- u/s.271(1)(c) of the Act for the assessment year 2010-

11, in the matter of assessment u/s.143(3) of the Act.

the action of the Assessing Officer in sustaining the addition of Rs.6,91,203/- as speculation income, Rs.1,34,733/- as income from mutual

fund and Rs.10,62,223/- as agricultural income made by the Assessing

Officer.

authorities and materials available on record.

and sold by the assessee on the same date. He noted from the contract

note of Oasis Securities Pvt Ltd., that all the purchases were made on 9.1.2010 and sales were also made on the same date. He also found that the shares purchased were not actually delivered. He held that the nature

of transaction was speculation income and not short term capital gain.

of Rs.6,91,203/-, profit on sale of Mutual Funds of Rs.1,68,258/-. He held

that the profit in trading in Mutual Fund of Rs.1,34,733/- was to be treated

as business income and profit of Rs.6,91,203/- earned from speculation

income in commodities is to be treated as speculation income under the head “profits and gains from business/profession”.

of Rs.6,91,203/- as speculation income under the head “profits and gains

from business/profession” and profit on sale of Mutual Fund of Rs.1,34,733/- as “business income”. He submitted that the assessee was an investor and not a trader in shares and commodities in sale and,

therefore, the gain was short term capital gain of the assessee.

authorities.

of shares in commodity were made on the very same date without delivery.

This finding of the Assessing Officer has not been controverted by the ld

Authorised Representative of the assessee by bringing any positive material

on record. If the argument of the A.R. of the assessee is to be accepted

that the assessee was an investor and not a trader, then no investor would

sale the shares on the very same date of the purchase or within 2 to 3 days

of the purchase. Therefore, I do not find any good and justifiable reason

to interfere with the order of the CIT(A), which is hereby confirmed and the ground of appeal of the assessee is dismissed.

was not justified in confirming the addition of Rs.10,62,223/- as agricultural

income.

income of Rs.6,49,773/-. On verification of records, it is seen that the agricultural land was taken on lease by the assessee by the assessee later

than sales made. The gross receipts of the assessee were Rs.10,62,223/-

. From the lease agreement of the land with Shri Ramakanta Acharya

admeasuring 8.034 acres, it is seen that the lease agreement was made on 5.10.2009. The lease agreement makes no mention of any standing

sugarcane crops. Sugarcane takes minimum of 4-6 months to ripen and be used as seed. He observed that the sales had been made even before

the lease was executed. In case sales have been made after the lease was signed, they were just 2 months after the lease was signed. The assessee

was required to produce copy of contract agreement for supply of seeds.

The assessee filed copy of agreement for crushing season 2010-11, which was later than the previous year relevant to the current assessment year.

Thus, the Assessing Officer concluded that the contract to supply sugarcane

seeds have been signed in the next year but the assessee has shown

agricultural income from sugar factory Nayagarh for Rs.10,62,223/- and after deduction of expenditure of Rs.4,12,450/- shown agricultural income

of Rs.6,49,773/-. Hence, he held that the assessee could not substantiate

the expenditure made against the income received and made addition of Rs.10,62,223/- to the income of the assessee.

observing that the credit introduced in the name and guise of agricultural

income was income from unexplained sources of the assessee.

authorities.

Hence, I find no reason to interfere in the order of the CIT(A), which is hereby confirmed and ground of appeal of the assessee is dismissed.

u/s.271(1)(c) of the Act.

that in the penalty order, the Assessing Officer has stated in para 5 at page

3 of the order that penalty proceedings u/s.271(1)(c) for concealment of income and for furnishing inaccurate particulars of income was initiated in respect of the additions made amounting to Rs.18,88,159/-. He submitted that the Hon’ble Supreme Court in the case of CIT vs. SSA’s. Emarld

Meadows dated 11th January, 2017 passed in Special Leave to Appeal (CC

No.11485/2016) has held that Omission by the AO to explicitly specify in the penalty notice as to whether penalty proceedings are being initiated for furnishing of inaccurate particulars or for concealment of income makes the penalty order liable for cancellation. Hence, he submitted that penalty of Rs.5,69,730/- imposed by the Assessing Officer u/s.271(1)(c) is, therefore,

liable to be cancelled.

submission of ld Authorised Representative of the assessee.

penalty of Rs.5,69,730/- observing at page 3 para 5 as under:

“Proceedings u/s.271(1)(c) of I.T.Act for concealment of income and for furnishing inaccurate particulars was also initiated in respect of the additions made. “

Therefore, the facts of the present appeal are identical to the facts of the case before the Hon’ble Supreme Court in the case of SSA’s. Emarld

Meadows(supra) and, therefore, the decision of Hon’ble Supreme Court

squarely applies to the case of the assessee. Hence, respectfully following

the same, I cancel the levy of penalty of Rs.5,69,730/- u/s.271(1)(c) and allow the ground of appeal of the assessee.

Order pronounced in the open court on 15/03/2017 in the presence of parties. (N.S Saini) ACCOUNTANT MEMBER Cuttack; Dated 15/03/2017 B.K.Parida, SPS Copy of the Order forwarded to :

SR.PRIVATE SECRETARY ITAT, Cuttack