TMI Blog2016 (5) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... RT) - Decided in favour of assessee - ITA No. 5065/Del/2011 - - - Dated:- 22-3-2016 - SHRI J.S. REDDY, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Appellant : Shri R.M. Mehta, Adv. For The Respondent : Shri P. Damkanunja, Sr. DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER This appeal has been filed by the assessee against the order dated 26.8.2011 of Ld. CIT(A)-IX, New Delhi for Assessment Year 2004-05 on the following ground of appeal:- 1. Whether on the facts and in the circumstances of the case, the ld. CIT(A) has erred in upholding levy of penalty u/s 271(1)( c) of the Act of ₹ 681625/-? 2. Briefly stated, the facts of the case are that the return was filed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred on sale of these Shares to its employee, Shri Jatinder Bawa was held to be a speculation loss and a sum of ₹ 17,88,942/- was added back to the income of the assessee. 3. In appeal before the Ld. First Appellate Authority, the Ld. CIT(A) has also confirmed the addition made by the assessing officer with the following comments:- I have considered the matter. On going through the details of the share held by the assessee company, it is found that the assessee company owes shares six companies and more than 60 mutual funds. There is frequent churning buy and sell activities are frequent. It is settled law that the nomenclature given by an assessee to a transaction or the entry in the books determinative of the real natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd movable property like shares can be transferred by signing share transfer deed along with relevant share certificate and on receipt of the sale consideration. However, in the present case the sale consideration is not received either at the time of sale or even subsequently. Therefore, there is no effective sale of shares. The shares are stated to be sold on 20th March, 2004, thereafter the purchaser is required to deposit the said shares along with transfer form to the company for registration of transfer. The company thereafter, after passing required resolution of its Board of Directors, will register the transfer. As per certificate issued by Allied Tronics (India) Ltd., the shares were transferred to Shri Jatinder Bawa on 20th March ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the same was treated as speculation loss, we find that this was a solitary transaction of sale of share during the year and hence it cannot be said that the assessee was engaged in the business of purchase and sale of shares. Therefore, the loss cannot be considered as loss in speculation business so as to hit by Proviso to Explanation to section 73 of the Act. 5. A penalty show cause notice was issued on 13.03.2009 and the assessee was asked to show cause why penalty u/s 271(l)(c) should not be imposed upon the assessee and subsequently, the AO reached a conclusion that during the assessment proceedings, the assessee had filed misleading facts and claimed loss on shares under the head Short-term capital loss and had set off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd submitted that the penalty was correctly levied and as such the same should be upheld. 9. Having heard the rival submissions and perused the material on record it is clear that in the instant case it cannot be said that the assessee withheld any relevant information regarding the receipts and income from the AO. The figure added back by the AO pertaining to the loss on sale of shares was a figure disclosed by the assessee itself. With regard to the provisions of section 271(1)(c ) of the Act pertaining to penalty, the Hon ble Apex court has authoritatively laid down that making of a claim by the assessee which is not sustainable will not tantamount to furnishing inaccurate particulars. Thus, in CIT vs. Reliance Petroproducts Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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