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2021 (3) TMI 1122 - AT - Income TaxPenalty proceedings u/s 271(1)(c) - assessee has incurred loss on sale of shares which was held as stock-in-trade - assessee treated the same as part of business whereas AO treated the same as speculative loss by invoking explanation to section 73 - HELD THAT:- As decided in AURIC INVESTMENT AND SECURITIES LTD. [2007 (7) TMI 276 - DELHI HIGH COURT] it is well-settled that assessment proceedings and penalty proceedings are distinct and independent of each other. No doubt, the findings in the assessment proceedings would have significance in the penalty proceedings also but they are not decisive or determinative.With respect to the fact that the assessee had accepted the view taken by the Assessing Officer that V the loss due to trading in shares was in the nature of a speculative loss, the assessee contended that in the penalty proceedings, it can take up the plea that the claim made in the return was bona fide. The assessee had a bonafide belief that the loss suffered by it is business loss. The change of nature of loss from business loss to speculative loss was not enough to impose penalty on the assessee. Therefore, we are inclined to delete the penalty imposed in this case. Accordingly, grounds raised by the assessee are allowed.
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