TMI Blog2015 (1) TMI 1315X X X X Extracts X X X X X X X X Extracts X X X X ..... against the said disallowance, no appeal is filed by the assessee. It is a case of an inadvertent mistake made by the assessee, and the assessee agreed for disallowance at the time of assessment proceedings. Accordingly, no penalty u/s.271(1)(c) of the Act was warranted. Putting these facts to the proposition of law discussed by coordinate bench in the case of City Group Global Markets India Pvt. Ltd [2011 (12) TMI 658 - ITAT MUMBAI] , we do not find any merit in the penalty so imposed by the AO u/s.271(1)(c) of the Act with respect to the disallowance made under of Section 94(7) of the Act. - Decided n favour of assessee Penalty imposed on account of addition made for legal and professional fee - Held that:- We found that quantum addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of rebate u/s 88E. The appellant prays that the same may please be deleted. Ground No.3: On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in commenting that the appellant has not voluntarily offered the disallowance of ₹ 1,42,10,000/- relating to arbitrage fees and appearing under the head Legal Professional in the profit loss account, for taxation, and has offered an explanation which is both false and non bonafide it fits directly to Explanation 1 to sec. 271 (1). The appellant prays that these remarks of the Hon'ble CIT (A) are erroneous and may please be deleted. The Appellant craves leave to add, alter, amend or omit any of the grounds of appeal before or during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing observations :- 5. In our view this does not attract penalty under section 271(1)(c). First of all the assessee is regularly purchasing and selling shares as part of business activity in large volumes and only in these two cases there is a declaration of dividend and sale of shares immediately thereafter, which attracted the provisions of section 94(7). But for the declaration of dividend, the loss would have become business loss allowable otherwise in the course of its business activity of purchase and sale of transactions. Even the professional Auditors/Advisors who examined large number of transactions before filing the returns could not advise the assessee on the application of this particular provision introduced from this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al contentions and found that assessee is a share broker and share trader and has offered a total income of ₹ 13,98,55,100. The said income includes profits from share trading of ₹ 8,73,43,276/-. The profit has been resulted from innumerable transactions of purchase sales of shares, including arbitrage, jobbing etc. During the year under consideration, the assessee had missed out to disallow a meager loss of ₹ 6,70,776/- u/s 94(7) of the Act, on account of dividend stripping. Disallowance u/s 94(7) depends upon cumulative satisfaction of certain conditions prescribed in the Act. The same has been remained to be applied by oversight and even the auditors have failed to point it out. However at the time of assessment proce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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