TMI Blog2011 (9) TMI 1126X X X X Extracts X X X X X X X X Extracts X X X X ..... ciate and consider the fact that since the loss on sale of units of UTI have been considered by the department as speculative in nature in A. Y. 1991-92, the loss arising on sale of units of UTI in A. Y. 1991-92 requires to be adjusted against similar gain on sale of units of ITI in the year under consideration i.e. A. Y. 1993-94. 2. The appeal in ITA No.210/Ahd/2009 is filed by the revenue department against the order of the learned CIT(A)-XIV Ahmedabad dated 14-11-2008 for assessment year 1993-94 challenging the impugned order in canceling the penalty u/s 271 (1) (c ) of the IT Act. 3. The detailed facts of the case are noted in the penalty order of the learned CIT(A) dated 14-11-2008. The same are that the AO levied penalty of ₹ 15,13,190/- u/s. 271(l) (c) of the Act on the ground that the set off of short term capital loss of earlier years i.e. of assessment year 1991-92 and 1992-93 with the short term capital gain of ₹ 20,25,000/- of the current year was not given. The learned CIT(A) had confirmed the action of the AO in not giving this set off by observing that while deciding the appeal for this year, the finding of earlier years in assessment orders can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the learned CIT(A) and the assessee had furnished inaccurate particulars of its income in respect of short term capital gain of ₹ 20,25,000/- and thereby committed a default punishable under section 271(l) (c) of the IT Act and accordingly levied penalty u/s 271(l) (c) of the IT Act. It was submitted before the learned CIT(A) that the assessee preferred an appeal against the order of learned CIT (A) and the said quantum appeal in respect of additions on which penalty has been imposed is pending for disposal before the ITAT. It was further submitted by the learned Counsel for the assessee that the only issue under dispute was that the AO disallowed the claim for set off of carried forward short term capital loss of ₹ 20,30,000/- for assessment year 1992-93 against short term capital gain of ₹ 20,25,000/- for the year under consideration and short term loss as well as gain being of identical nature, i. e. on sale of units of UTI and the same having been considered by the department as speculative nature, the loss should have been adjudicate against similar gain in the subsequent year. Further, the assessee company had furnished complete details and evidences in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offered by the assessee was false and, therefore, the learned Counsel for the assessee contended that there was neither a case of concealment nor furnishing inaccurate particulars of its income. It was also submitted that as per order u/s 154 of the IT Act dated 27-6-1993 revising intimation u/s !43(l) (a) of the IT Act for assessment year 1991-92 and filed as Annexure-4 to paper book filed by the learned Counsel for the assessee and also order u/s 154 of the IT Act dated 27-07-1995 revising assessment order for assessment year 1991-92 and filed as Annexure -7 to paper book, the AO has allowed carry forward of loss of ₹ 18,30,OOO/- of assessment year 1992-92 to be set off against speculative business income, thus to the said extent the set off was available and thus no penalty could be imposed. 4. The learned CIT(A) considering the explanation of the assessee cancelled the penalty. His findings in Para 2.3 of the impugned order are reproduced as under: 2.3 I have considered the facts of the case as well as the submissions as advanced by the A.R of the appellant. It is seen that that the A.O. levied the penalty on the ground that the A.O. did not give the benefit of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive profit and loss of AY. 1991-92 should be set off against the gain of A.Y. 1993-94. This contention of the AR. seems plausible as it is seen from the assessment order u/s. 143(3) r. w. s. 254 for A.Y. 1993-94 dated 31-03-2006 at page 4 wherein the A.O. observed that the assessee has followed the same pattern of purchasing shares-cum-dividend and selling the same immediately after the .announcement of dividend at ex-dividend rates and has suffered loss. Considering the above facts of the case and the detailed submission along with various judgments as relied upon by the A.R, I hold that there is no malafide intention on the part of the appellant in claiming the benefit of set off of short term capital loss against the short term capital gain of current year, hence penalty for concealment cannot be levied in the case of the appellant. I, therefore, direct the AO. to delete the penalty levied in this case to the tune of ₹ 15,13,I5O/- on such disallowance of set off of ₹ 20,25,000/-. 3. In the result, the appeal is allowed. 5. Similarly, in the appeal in ITA No.1115/Ahd/2007, the learned CIT(A) noted that the return of income was filed on 31-12-1993 declari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be given set off against this year s short term capital gain. The learned CIT(A) however, did not accept the contention of the assessee because while deciding the appeal for the present assessment year the finding given in the earlier assessment years cannot be disturbed. The learned CIT(A) also noted that the order of the AO for assessment year 1991-92 and 1992-93 can be decided in the appeal in those years only. Since the finding of the AO have been confirmed by the learned CIT(A), therefore, it was beyond the scope of the appellate proceedings in this assessment year to change the findings and nature of income decided in the earlier years. It was found that it is a fact that in the assessment year under appeal, the assessee has shown short term capital gain which is duly accepted by the AO and no grievance is left in the assessment year under appeal regarding carry forward of short term capital loss of earlier years, that has been decided against the assessee. Therefore, according to the learned CIT(A), the same cannot be decided in the impugned order. The learned CIT(A) was, therefore, of the opinion that the AO was justified in not giving benefit of set off with regard to lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO have become final as was not disturbed by the appellate authorities. The learned Counsel for the assessee on second ground of appeal submitted that since in assessment year 1991-92 the transactions were considered to be speculative in nature, therefore, in subsequent assessment year under appeal the same should be treated as speculative in nature. However, he could not point out any infirmity in the orders of the authorities below that there was no direction in the earlier years assessment order for giving any set off against short term capital gain claimed in the assessment year under appeal. In the present appeal before the learned CIT(A) the findings of earlier years cannot be disturbed, therefore, the learned CIT(A) rightly noted that it was beyond his scope and power to change the findings of earlier years while deciding the appeal for the present assessment year. Since those were the set aside proceedings before the learned CIT(A), therefore, the authorities below were bound to pass the order as per direction of the Tribunal. The scope of the same cannot be widened on the claim on the basis of earlier years findings. Since in earlier years, the orders have become final, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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