TMI Blog1990 (10) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... godown. He sold them through the same agent on 21st Sept., 1976 for Rs.58,258.50 to a third party, incurring a loss of Rs.4 8,991.50. The agent charged the assessee, his commission, interest, godown rent, insurance and postage. He sent the assessee vide letter dt.21st Sept., 1976 bills for the goods and a copy of his account asking for a draft for the debit balance. The ITO held that no delivery of the goods was either taken or given, only the difference and other charges was settled and so the transaction was purely a speculative one. According to him, the assessee by making a claim for business loss has supplied inaccurate particulars of his income to reduce his tax liability. He imposed a penalty for the same. 3. Before the Tribunal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that where ultimate delivery was given it was not a speculative transaction and pointed out that in this case it was not disputed that the delivery was given by the agent to a third party. Thirdly, he submitted that the assessee had not concealed any facts and had in fact supplied all the particulars. Fourthly, he pointed out from the ITO's report to the Commissioner that the agents were called and their books were examined and so it could not be doubted that the assessee had purchased the goods and ultimate delivery was given to a third party. He submitted that the ITO''s said letter showed that the conclusion was based on the fact that the assessee has not visited the godown and the goods were not removed from there. Regarding the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wns. 7. Further, in the certificate issued by the commission agent the copy of which has been filed he has stated that the goods were sold to one Jayendra Oil Mills, Khambhalia. Thus, the agent is doing both the buying, and the selling on behalf of the assessee. When the loss was incurred he charged it to the assessee. All this is on the basis of the above documents the genuineness of which has not been questioned. Further, on the basis of the above facts the assessee could have entertained a bona fide belief that he was entitled to have the loss assessed as business loss. The decision relied upon by the assessee's counsel supports the assessee's case. The ITO's letter to the Commissioner shows the basic reasoning. It states that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal has taken a different view in the quantum appeal but at the time of appeal regarding penalty a fresh look can be taken at the evidenced, independent approach adopted and a different conclusion arrived at. While an addition can be made on a balance of probabilities, penalty can be imposed only if the default is proved beyond reasonable doubt. Since as stated above, another view is possible on the facts, it cannot be said that the assessee's default is proved beyond reasonable doubt. On the basis of t he above possible view the assessee could at least have entertained a bona fide belief that he had incurred a business loss. Also since a different view as indicated above is possible, this is not a fit case for levy of penalty. The decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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