TMI Blog2002 (10) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... 17-10-1985. The Assessing Officer treated the loss as in genuine and disallowed the same since the details of shares purchased and sold and individual script numbers could not be supplied even after making enquiry from M/s. Bharat Bhushan Co. New Delhi, through whom 1250 shares of M/s. Orkay Silk Mills were claimed to be purchased on 25-10-1985 for Rs. 2,13,200 and sold on 11-11-1985 for Rs. 1,43,125. The Assessing Officer also noticed during the assessment proceedings that the shares were never got transferred in the name of the assessee and the enteries regarding purchase and sale of shares were not recorded with Delhi Stock Exchange. According to him, it was not a case of spot delivery since the assessee did not make on purchase of shares on 25-10-1985 or on the subsequent date and in fact no payment was made throughout for the period of 17 days till the shares were sold. The Assessing Officer also observed during the assessment proceedings that even otherwise since no delivery of shares had been proved or taken place at the time of purchase and no payment was made, the transaction was speculative in nature as it had been settled on the difference of purchase and sale value o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification letter regarding purchase and sale of shares of M/s. Orkay Silk Mills received from M/s. Bharat Bhushan Co., New Delhi, which clarified that it was not necessary to write the name of the person from whom shares were purchased and similarly, it was not necessary to inform the name of the buyer in case the shares were sold for their clients. It was further submitted before the learned CIT(A) that whether this was a business loss or speculative loss but there was no wilful neglect on the part of the assessee and there was no mala fide intention to decrease the income and even there was no guilty mind in order to take undue advantage and there was no intention to defraud the revenue when Delhi Stock Exchange did not require that each and every transaction of its member broker to be recorded. It was pleaded that at the most, the loss suffered by the assessee could be called a speculative loss but all details in that regard were duly given alongwith the return and as such the penalty under section 271(1)( c ) was not attracted. 4.1. After considering the submissions of the assessee, the learned CIT(A) observed that the letter of the broker did not lend any support nor it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. [2000] 246 ITR 568, it was submitted by the learned counsels for the assessee that it is the assessing authority who has to form his own opinion and record his satisfaction before initiating penalty proceedings. Merely because penalty proceedings have been initiated, it cannot be assumed that such a satisfaction was arrived at. The reliance was also placed on the following decisions: 1. Diwan Enterprises v. CIT [2001] 167 CTR (Delhi) 324 2. National Pictures Corpn. Society Cinema v. ITO [2001] 16 ITR 72 (Chd.-Tri) 6. In his rival submissions, the learned D.R. strongly supported the orders of the authorities below. 7. We have heard both the parties at length and carefully gone through the material available on the record. In the instant case it is not in dispute that the disallowance of Rs. 70,075 made by the Assessing Officer was confirmed by the learned CIT(A) and also by the ITAT and even the Hon ble Punjab Haryana High Court also upheld the same. But it is also well settled law that the penalty proceedings are entirely distinct from the assessment proceedings however, the findings in the assessments proceedings are relevant but not conclusive in penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e broker M/s. Bharat Bhushan Co, New Delhi. It is also noticed that the authorities below accepted that the assessee had paid a sum of Rs. 8,000 in advance on 17-10-1985 to the broker. On the other hand, it is also true that no delivery of the shares was taken by the assessee and also no full payment was made for the purchase of the shares. On that basis, the Assessing Officer was justified in disallowing the claim of the assessee. From the above, it would be clear that the Assessing Officer had not denied that the information provided by the assessee were insufficient or inaccurate, as such it cannot be said particulars of income were not furnished by the assessee. On the one hand, the Assessing Officer stated that the loss claimed by the assessee was bogus loss, on the other hand, the disallowance has been made on the basis that the loss claimed was speculative loss, as such the same could not be set off against the business income. While initiating penalty proceedings, the Assessing Officer had observed as under: "Penalty notice under section 271(1)( c ) for concealing and furnishing inaccurate particulars of incomes to the extent of Rs. 70,075 issued separately." From the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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