TMI Blog2009 (8) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... urities. A return of income for the year under consideration was filed by it on October 31, 2001 declaring a loss of Rs. 1,16,69,404. In the assessment completed under section 143(3) vide an order dated October 31, 2003, the loss of the assesseecompany was determined by the Assessing Officer at Rs. 9,43,846 after making a disallowance of the assessee's claim for set-off of business loss amounting to Rs. 1,07,17,558 in trading of shares treating the same as speculation loss by invoking the Explanation to section 73. On sustenance of the said disallowance by the learned Commissioner of Income-tax (Appeals) in the quantum proceedings, penalty proceedings under section 271(1)(c) were initiated by the Assessing Officer and since the explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ombay High Court in the case of CIT v. Orient Syntex Ltd. (I. T. Appeal 1069 of 2000 dated July 25, 2005). He also took note of the amendment made in section 271(1)(c) by the Finance Act, 2002, with effect from April 1, 2003 to cover even the loss cases and held in this context relying on the decision of the Special Bench of the Income-tax Appellate Tribunal in the case of CIT (Asst.) v. Apsara Processors P. Ltd. [2005] 2 SOT 132 (Ahm) [SB] that the said amendment being prospective in nature was applicable only for the assessment year 2003-04 and onwards. Accordingly, the penalty imposed by the Assessing Officer under section 271(1)(c) was cancelled by the learned Commissioner of Income-tax (Appeals) on the ground that the income returned b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the assessee, however, has sought to argue the case of the assessee that the penalty imposed by the Assessing Officer under section 271(1)(c) is not sustainable on the merits. He has contended that although the learned Commissioner of Income-tax (Appeals) has rejected the case of the assessee on the merits vide his impugned order holding that by claiming loss arising from trading in shares as normal business loss as against speculation loss in terms of the clear provisions of the Explanation to section 73, there was furnishing of inaccurate particulars of his income by the assessee, the said rule 27 permits the assessee as respondent to support the order appealed against on any of the grounds decided against him despite there be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer and the assessment was made at a loss of Rs. 85,259, penalty proceedings under section 271(1)(c) were also initiated by the Assessing Officer and the assessee was held to be liable for imposition of penalty by him on the ground that the assessee has furnished inaccurate particulars of income to the extent of making wrong claim for set-off of share trading loss against other income treating the same as normal business loss. The penalty imposed by the Assessing Officer under section 271(1)(c) however was held to be not sustainable by the learned Commissioner of Income-tax (Appeals) as well as by the Tribunal and when the matter reached the hon ble Delhi High Court, it was held by their Lordships that, mere treatment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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