TMI Blog2019 (3) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 271(1)(c). Difference of opinion between the AO and the assessee about head of income under which ‘Particular Item’ is to be ‘assessed’ was and would remain a bone of contention between the AO and the assessee. But such differences should not and cannot result in invoking the penal provisions of chapter XXI of the Act. Therefore, we delete the penalty and allowed these grounds raised by the assessee. - I.T.A. No. 7252/Mum/2017 - - - Dated:- 1-3-2019 - Sh. Sandeep Gosain, JM And Sh. G. Manjunatha, AM For the Appellant : Shri Rishabh, AR For the Respondent : Shri Satishchandra Rajore, DR ORDER PER SANDEEP GOSAIN, JUDICIAL MEMBER: The present Appeal filed by the assessee is against the order of Ld. CIT (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case. 5) The appellant craves leave to add, amend, alter or delete the said ground of appeal. 2. The brief facts of the case are that the assessee company is engaged in the business of trading in commodities. The return of income for the year under consideration was filed on 28-09-2014 declaring total income of ₹ 1,61,361/-. Consequently, assessment order was passed on 30.08.16 u/s.143(3) of the Act, determining the total income at ₹ 3,05,470/- and made certain additions /disallowances under different heads. However, no appeal was filed by the assessee against the order of assessment. During the course of assessment proceedings, AO initiated penalty u/s 271(1)(c) of the Act on the ground that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , AO rejected the claim of the assessee and held that the transactions in the mutual fund did not constitute assessee s business transactions. Thus, AO treated the loss as Short Term Capital Loss of the assessee. 8. Ld. AR submitted that assessee had made claim which was bonafide and the same was coupled with documentary evidence, but nothing was brought on record by the AO. It was further submitted that there was no malifide on the part of the assessee while raising its claim and thus relied upon the decision of the Coordinate Bench of ITAT in the case of CIT vrs. M/s TCFC Finance Ltd. (ITA No. 1581/Mum/2016 dated 20.12.17), wherein identical circumstance of penalty was deleted by the Coordinate Bench. 9. On the other hand, Ld. DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, we notice that assessee had claimed that the transactions relating to mutual fund constituted part of his business and therefore the loss arising out of the transactions in the mutual fund units was to be treated as its business loss. However, AO rejected the claim of the assessee and held that the transactions in the mutual fund did not constitute assessee s business transactions and treated the loss as Short Term Capital Loss of the assessee. 13. Further, the Hon ble Bombay High Court in the case of Sesa Resources Ltd vs. ACIT (219 Taxman 92) had held that where there was no dispute that the assessee disclosed all the facts and the assessee did not conceal any facts, and, further that based on the disclosed material, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court further held that merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not attract penalty under section 271(1)(c) of the Act. The Hon'ble Bombay High Court also rejected the Department's argument that the decision in case of Reliance Petroproducts (supra) was per incurim because it did not refer to Explanation 1 to section 271(1)(c) of the Act. This was the case where the Assessee's claim for a deduction under section 350 of the Act and provision for diminution in the value of investments was completely rejected by the Hon ble Tribunal in the quantum appeal, yet, the Hon'ble Tribunal deleted the penalty under section 271(1)(c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued that there was no change in amount of total income which was a loss, that merely a change of treatment of loss did not tantamount to concealment of income/filing of inaccurate particulars. Assessee relied upon cases of Auric Investments and Securities Ltd.(310ITR121) and Bhartesh Jain(323ITR58) in its support. The FAA considered the submission of the assessee and the penalty order of the AO. He held that in the matter under appeal share trading loss were treated speculative losses, that only head of income has changed, that entire facts were on record, disallowance of proportionate expenses could not be basis for levying penalty u/s.271(1)(c) of the Act. Referring to the decision of Aurich Investment and Securities Ltd. (supra)The FAA d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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