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2015 (11) TMI 1065 - AT - Income TaxLevy of penalty u/s. 271(1)(c) - bogus speculation profit - Held that:- In the present case, the assessee has disclosed income from speculation profit only and the case is that he could not prove that this is speculation income or any other income for the want of evidence and merely he has not challenged the quantum addition. Assessee may file an appeal against an order of imposition of penalty even though he might not have filed an appeal against the order of assessment. The assessment proceedings are quite distinct and different from penalty proceedings. Although the order of assessment is a good evidence but it is not a conclusive proof that the assessee has concealed the particulars of income. In the present case before us, the AO’s levy of penalty is entirely based on the assessment order that the assessee is unable to prove the profit declared in speculation income received to be one from Nakamichi Securities Ltd. in the absence of evidence. In levying penalty the burden is on the revenue to prove that the particular amount is profit not from speculation income but income from other sources against which speculation loss cannot be adjusted. No doubt the findings during assessment proceeding for determining or computing the income is conclusive and it is also a good piece of evidence for initiating penalty proceeding but before penalty could be imposed the entirety of circumstances must reasonably point to the conclusion that the disputed amount represented income that the assessee has concealed the particulars of income or has deliberately furnished inaccurate particulars of income. Here none of the case is present. In view of the above, we are of the considered view that the penalty u/s. 271(1)(c) of the Act in the given facts and circumstances is not leviable. Accordingly, we delete the penalty and allow this issue of assessee’s appeal.- Decided in favour of assessee. Short term capital loss disclosed by assessee claimed to have been carried forward for setting off - Held that:- AO’s levy of penalty is entirely based on the assessment order that the assessee is unable to prove the profit declared in speculation income received to be one from Nakamichi Securities Ltd. in the absence of evidence. In levying penalty the burden is on the revenue to prove that the particular amount is profit not from speculation income but income from other sources against which speculation loss cannot be adjusted. No doubt the findings in the assessment proceeding for determining or computing the income is conclusive and it is also a good piece of evidence for initiating penalty proceeding but before penalty could be imposed the entirety of circumstances must reasonably point to the conclusion that the disputed amount represented income that the assessee has concealed the particulars of income or has deliberately furnished inaccurate particulars of income. Here none of the case is present. In view of the above, we are of the considered view that the penalty u/s. 271(1)(c) of the Act in the given facts and circumstances is not leviable.- Decided in favour of assessee. Disallowance of expenses against exempt income u/s. 14A of the Act by invoking Rule 8D - Held that:- Where no information given in the return of income is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing of inaccurate particulars of income. In the present case also, the AO has nowhere found the explanation of the assessee as false and moreover from the details filed it could not be ascertained that the claim made by assessee is false. The AO has to prove that the assessee has concealed the particulars of income. In such circumstances, the penalty levied by the AO cannot be sustained. - Decided in favour of assessee.
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