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TMI Blog2012 (11) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of trading in MCX. The return of income was filed on a loss of (-)Rs.9,26,100/- after adjusting the loss claimed from MCX trading amounting to Rs.15,14,671/- against the profit of Rs.5,12,670/- from bullion business. The Assessing Officer during the course of assessment proceedings under section 143(3), required the assessee as to why the loss claimed on MCX trading should not be disallowed being speculative loss. In response, the assessee submitted as under :- "We on behalf of our above refer assessee & in continuation with our previous hearing we hereby want to state that assessee has two full time business i.e. one of gold & silver bar trading and other is full time business of MCX business also, for which he is a regular member of MCX. Hence both business income is from normal business only & not a speculation business. On the above facts we request you to consider the MCX business as income from normal business only & shall be glad to submit any other details after hearing from you." Such an explanation was not accepted by the Assessing Officer on the ground that MCX trading in gold and silver is in the nature of speculation business as per the provisions of section 43(5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncealment of income or furnishing particulars as stipulated in Section 271(1)(1)(c). On the other hand, learned CIT DR relied upon the findings given by the CIT(A) as given in the appellate order. 7. We have carefully considered the rival submissions and perused the material placed on record. It is undisputed fact that the assessee carried out two businesses, one, trading in MCX and other trading of gold & silver bar. In trading of MCX, loss has been incurred amounting to Rs.15,14,671/- and in the trading of gold and silver, he had profit of Rs.5,12,670/-. The assessee has treated the loss in MCX business as business loss and has claimed set off against the profit of other business. Thus, there is no dispute about the incurring of a loss. The only issue is whether it should be treated as speculative loss or business loss. The assessee all throughout has been treating both business as normal business and income has been shown as business income. Learned CIT(A) in the appellate order has tried to made out the case that the assessee has not shown the sales turn over of MCX trading activities in the profit loss account but has taken the trading loss of MCX business in the pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that by making incorrect claim for the expenditure on interest, the assessee has furnished inaccurate particulars of the income. As per Law Lexicon, the meaning of the word "particular" is a detail or details (in plural sense) ; the details of a claim, or the separate items of an account. Therefore, the word "particulars" used in the section 271(1)(c) would embrace the meaning of the details of the claim made. It is an admitted position in the present case that no information given in the return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The learned counsel argued that "submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income". We do not think that such can be the interpretation of the concerned words. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what manner, the assessee had furnished the particulars of his income. The court ultimately went on to hold that the element of mens rea was essential. It was only on the point of mens rea that the judgment in Dilip N. Shroff v. Joint CIT* was upset. In Union of India v. Dharamendra Textile Processors**, after quoting from section 271 extensively and also considering section 271(1)(c), the court came to the conclusion that since section 271(1)(c) indicated the element of strict liability on the assessee for the concealment or for giving inaccurate particulars while filing return, there was no necessity of mens rea. The court went on to hold that the objective behind the enactment of section 271(1)(c) read with Explanations indicated with the said section was for providing remedy for loss of revenue and such a penalty was a civil liability and, therefore, wilful concealment is not an essential ingredient for attracting civil liability as was the case in the matter of prosecution under section 276C of the Act. The basic reason why decision in Dilip N. Shroff v. Joint CIT was overruled by this court in Union of India v. Dharamendra Textile Processors**, was that according to this cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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