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2015 (7) TMI 1013 - AT - Income TaxPenalty u/s 271(1)(c) - assessee debited an amount under the head ‘other expenses', being loss on account of transactions in shares - AO treated this loss, as loss arising from speculative business - Held that:- The Assessing Officer (AO) in this case has not found, that the claim of the assessee that it had incurred a loss of ₹ 1,69,75,525/- in the business of purchase and sale of shares as either false or fabricated. He had infact accepted this figure of loss. All the transactions in question were disclosed by the assessee in the books of accounts. The Profit and Loss a/c was audited. The assessee had in its letter dt. 12.10.2010 furnished all the details to the AO. The details of STT paid along with photo copies of Certificates in Form no.10 DB, bearing code of transactions etc. These code of transactions indicated as to whether the transactions were settled by actual delivery or not.Whether the loss in question should be treated as business loss or as speculative loss.This is a debatable issue. As decided in THE COMMISSIONER OF INCOME TAX & OTHS. Versus M/s MANJUNATHA COTTON AND GINNING FACTORY & OTHS. [2013 (7) TMI 620 - KARNATAKA HIGH COURT] the findings recorded in the assessment proceedings insofar as "concealment of income" and "furnishing of incorrect particulars" would not operate as res judicata in the penalty proceedings. It is open to the assessee to contest the said proceedings on merits. However, the validity of the assessment or reassessment in pursuance of which penalty is levied, cannot be the subject matter of penalty proceedings. The assessment or reassessment cannot be declared as invalid in the penalty proceedings - Decided against revenue.
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