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2019 (4) TMI 511 - AT - Income TaxPenalty u/s 271(1)(c) - treatment to loss on sale of wheat - claiming the speculative loss as business loss - any proof of mensrea? - HELD THAT:- A.O on coming to a finding that the assessee intentionally claimed the loss on sale of wheat as a business loss without establishing anything about the movement of goods which shows that the transaction of purchase and sales of wheat is speculative in nature and provisions of Section 45(3) applies thereon and the loss arising from which transaction without delivery of goods falls under the category of speculation loss and the same can be adjusted/carry forward to be adjusted against speculative profit only. The transaction of purchase and sale of wheat revenue authorities have not pointed out any mistake, error or anomaly in the genuineness of the transaction with regard to the quantity of goods, amount of purchase and sale, details of the party with whom the transaction has been carried out. In nutshell assessee has not concealed any particulars relating to the alleged transaction for both the assessment years. Where assessee’s mensera is not proved and there is no furnishing of inaccurate particulars of transactions, whether the penalty is leviable u/s 271(1)(c) of the Act needs to be adjudicated. In the case of Krishna Soya Product Pvt. Ltd vs. DCIT [2017 (9) TMI 1801 - ITAT INDORE] adjudicating the similar type of issue of levy of penalty u/s 271(1)(c) in respect of treating the loss on trading of commodity exchange treated as business loss but was held to be as speculative loss by the revenue authorities the penalty levied u/s 271(1)(c) was deleted by the Tribunal Levying the penalty u/s 271(1)(c) on the alleged transaction of purchase and sale of wheat because the assessee has bonafidely treated the loss as business loss and disclosed all necessary details relevant to the transaction in the books of accounts and further for the alleged transaction two divergent views were possible thereby the alleged loss could be treated as a business loss or speculation loss. Thus delete the penalty levied u/s 271(1)(c) - Decided in favour of assessee.
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