SAMIR RAJNIKANT HAJI, MUMBAI V. ASST CIT CIR 4(2), MUMBAI

ITA 1199/MUM/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 2711 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 20-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABDUL HAKEEM
• Keywords: Transactions in derivatives; Bonafide mistake
• Section: 154

Judgement Text

SAMIR RAJNIKANT HAJI VS. ACIT ITA NO. 1199/MUM/2017 A.Y 2010 - 11 1 IN THE INCOME TAX APPELLATE TRIBUNAL ' J ' BENCH, MUMBAI BEFORE SHRI G.S PANNU , ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NOS. 1199 /MUM/2017 (ASSESSMENT YEAR: 201 0 - 1 1 ) SAMIR RAJNIKANT HAJI 16 WESTERN COURT, 83, MARINE DRIVE, MUMBAI - 400 020 VS. ASST. CIT, CIRCLE 4(2), [NOW CIRCLE 4(2)(1)] 642, 6 TH FLOOR, AAYKAR BHAWAN MUMBAI - 400 0 20 PAN AA APH2255E (APPELLANT) (RESPONDENT) REVENUE BY: SHRI ABDUL HAKEEM , D.R ASSESSEE BY: MS. DINKLE HARIYA , A.R DATE OF HEARING: 28.08 .2018 DATE OF PRONOU NCEMENT: 12. 10.2018 O R D E R PER RAVISH SOOD, JM THE AFORESAID APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 9 , MUMBAI FOR A.Y. 201 0 - 1 1 , DATED 0 2 .11.2016, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 143(3), DATED 08.01.2013 . THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) , HAS RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL: 1. O N THE FACTS AND CIRCUMSTANCES AND IN LAW, THE C OMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE PENALTY LEVIED UNDER SEC. 271(1)(C) OF THE INCOME TAX ACT, 1961 ON ADDITION OF RS. 2,509/ - MADE UNDER SEC. 94(7) OF THE ACT. SAMIR RAJNIKANT HAJI VS. ACIT ITA NO. 1199/MUM/2017 A.Y 2010 - 11 2 2. O N THE FACTS AND CIRCUMSTANCES AND IN LAW, THE COMMISSIONER OF INC OME TAX (APPEALS) ERRED IN CONFIRMING THE PENALTY LEVIED UNDER SEC. 271(1)(C) OF THE INCOME TAX ACT, 1961 ON ADDITION OF RS. 501,347/ - ON ACCOUNT OF MISTAKE IN ACCOUNTING FOR THE MARGIN ON SHARES, COMMODITIES (MCX AND NCDEX) AND FOREIGN CURRENCY (MCX) DERI VATIVE OPEN POSITION AS ON THE LAST TRADING DAY OF THE YEAR . 2. BRIEFLY STATED, THE ASSESSEE WHO IS ENGAGED IN THE BUSINESS OF SECURITIES INCLUDING COMMODITY BROKERAGE AND SHARES, CURRENCIES AND COMMODITIES DERIVATIVE TRADING HAD FILED HIS RETURN OF INCOME FOR A.Y 2010 - 11, DECLARING TOTAL INCOME OF RS. 13,38,353/ - . SUBSEQUENTLY, T HE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC. 143(2) OF THE ACT. INCOME OF THE ASSESSEE WAS ASSESSED BY THE A.O, VIDE HIS ORDER PASSED UNDER SEC. 1 43(3), DATED 08.01.2013 AT RS. 19,60,820/ - , AFTER INTER ALIA MAKING THE FOLLOWING DISALLOWANCES : S.NO. PARTICULARS AMOUNT 1. DISALLOWANCE UNDER SEC. 94(7) RS. 2,509 - 00 2. DISALLOWANCE OF EXCESS CLAIM OF LOSS UNDER THE HEAD FUTURE & OPTIONS RS. 37,011 - 00 3. DISALLOWANCE OF COMMODITY PROFIT RS.4,64,425 - 71 3. THE ASSESSEE DID NOT ASSAIL THE AFORESAID ADDITIONS BY CARRYING THE MATTER ANY FURTHER IN APPEAL BEFORE THE CIT(A). HOWEVER, AS AGAINST THE ADDITION MADE BY THE A.O UNDER SEC. 94(7) OF RS. 2,509/ - , AS INFORMED BY THE LD. AUTHORISED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE , THE ASSESSEE HA S FILED AN APPLICATION UNDER SEC. 154 OF THE ACT. 4 . SUBSEQUENTLY, THE A.O AFTER THE CULMINATION OF THE ASSESSMENT PROCEEDINGS CALLED UPON THE ASSESSEE TO SHOW CAUSE AS TO WHY PENALTY UNDER SEC. 271(1)(C) MAY NOT BE IMPOSED ON HIM. THE EXPLANATION OF THE ASSESSEE THAT NO PENALTY UNDER SEC. 271(1) (C) WAS CALLED FOR IN HIS HANDS, DID NOT FIND FAVOUR WITH THE A.O, WHO VIDE HIS ORDER DATED 31.07.2013 IMPOSED A PENALTY OF RS. 1,66,302/ - . SAMIR RAJNIKANT HAJI VS. ACIT ITA NO. 1199/MUM/2017 A.Y 2010 - 11 3 5 . AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). HOWEVER, THE CIT(A) AFTER DELIBERATING AT LENGTH ON THE CONTENTIONS ADVANCED BY THE ASSESSEE BEFORE HIM, WAS HOWEVER NOT PERSUADED TO SUBSCRIB E TO THE SAME AND UPHELD THE PENALTY IMPOSED BY THE A.O UNDER SEC. 271(1)(C). 6 . THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORISED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE TOOK US THROUGH THE OBSERVATIONS OF THE LOWER AUTHORITIES IN CONTEXT OF THE ISSUE UNDER CONSIDERATION. IT WAS THE CONTENTION OF THE LD. A.R , THAT THE EXCESS CLAIM OF LOSS OF RS. 37,010.87 UNDER T HE HEAD FUTURE & OPTIONS (FOR SHORT F&O) AND THE DIFFEREN CE OF COMMODITY PROFIT OF RS 4,64,425.71 , HAD OCCASIONED BECAUSE OF A MISTAKE IN ACCOUNTING OF CLOSING SPAN MARGINS. IT WAS AVERRED BY THE LD. A.R , THAT IN THE CASE OF F&O THERE WERE TWO BILLS DATED 31.03.2010 AND 30.03.2010, SHOWING THE CLOSING SPAN MARGI N OF RS. 35,55,250.77 AND RS. 35,92,261.50, RESPECTIVELY. IT WAS THE CONTENTION OF THE LD. A.R , THAT AS THE ASSESSEE HAD INADVERTENTLY ACCOUNTED FOR THE MARGIN OF RS. 35,55,250.77 AS PER THE BILL PERTAINING TO 30.03.2010, THEREFORE, THE SAME HAD RESULTED T O AN EXCESS CLAIM OF LOSS OF RS. 37,010.87. FURTHER, IT WAS SUBMITTED BY THE LD. A.R THAT IN CASE OF COMMODITIES (MCX AND NCDX) DERIVATIVES THE ASSESSEE HAD BY MISTAKE ACCOUNTED FOR THE CLOSING SPAN MARGIN OF RS. 4,71,308/ - AND RS. 59,765/ - AS ON 30.03.20 10, RATHER TH E N THE SPAN MARGIN OF RS. 82,875/ - AND RS. 8,04,153/ - RECOVERED BY DEBITING IN THE BILL OF 31.03.2010 . THE LD. A.R AVERRED THAT THE WRONG ADOPTION OF THE CLOSING SPAN MARGIN HAD RESULTED IN ACCOUNTING OF AN EXCESS MARGIN OF RS. 3,88,433/ - [RS . 4,71,308/ - ( - ) RS. 82,875/ - ] IN THE CASE OF COMMODITIES (MCX), AND ACCOUNTING OF LESS MARGIN OF RS. 7,44,388/ - [RS. 59,765/ - ( - ) RS. 8,04,153/ - ] IN THE CASE OF COMMODITIES (NCDX). STILL FURTHER, IT WAS SUBMITTED BY THE LD. A.R THAT IN CASE OF MCX FOREIGN EXCHANGE, THE ASSESSEE FAILED TO ACCOUNT FOR THE CLOSING SPAN MARGIN OF RS. 1,08,470/ - , FOR THE REASON THAT THE BILL OF 31.03.2010 WAS RECORDED ON 21.03.2010, LEADING THE ASSESSEE TO INFER THAT THER E WAS NO NO MARGIN OUTSTANDING AS ON 31.03.2010 . THE LD. A.R SUBMITTED THAT THE SAMIR RAJNIKANT HAJI VS. ACIT ITA NO. 1199/MUM/2017 A.Y 2010 - 11 4 AFORESAID MISCONCEPTION OF THE ASSESSEE HAD RESULTED TO ACCOUNTING OF LESS MARGIN OF RS. 1,08,470/ - . THE LD. A.R ADVERTING TO PENALTY IMPOSED UNDER SEC. 271(1)(C) AS REGARDS THE ADDITION OF RS. 2,509/ - MADE BY THE A.O UNDER SEC. 94(7 ) SUBMITTED, THAT AS THE ADDITION IN ITSELF WAS BASED ON MISCONCEIVED FACTS, THUS, THE ASSESSEE HAD FILE D AN APPLICATION WITH THE A.O UNDER SEC. 154, WHICH HOWEVER HAD NOT BEEN DISPOSED OFF BY HIM TILL DATE. IN THE BACKDROP OF THE AFORESAID FACTS, IT WAS THE CONTENTION OF THE LD. A.R THAT AS THE ADOPTION BY THE ASSESSEE OF THE CLOSING SPAN MARGIN OF F&O AND COMMODITIES (MCX AND NCDX), AS THAT OF 30.03.2010, RATHER THAN THAT OF 31.03.2010 ; AS WELL T HE FAILURE TO NOT ACCOUNT FOR THE CLOSING SPAN MARGIN FOR MCX FOREIGN EXCHANGE ON 31.03.3010 HAD OCCASIONED ON ACCOUNT OF A BONAFIDE MISTAKE S/OMISSIONS , THUS NO PENALTY UNDER SEC. 271(1 ) (C) WAS LIABLE TO BE IMPOSED. THE LD. A.R IN ORDER TO BUTTRESS HER AFO RESAID CONTENTION SUBMITTED , THAT AS THE CLOSING MARGINS WERE TO BE CARRIED FORWARD TO THE NEXT YEAR I.E A.Y 2011 - 12 , THUS IN A WIDER CONSPECTUS THE ENTIRE EXERCISE WOULD BE REVENUE NEUTRAL. 7 . PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. IT WAS AVERRED BY THE LD. D.R THAT AS THE ASSESSEE HAD PURPOSIVELY SUPPRESSED THE INCOME TO THE EXTENT OF RS. 5,03,946, THUS THE A.O HAD RIGHTLY IMPOSED PENALTY UNDER SEC. 271(1)(C), WHICH AFTER NECESSAR Y DELIBERATIONS WAS UPHELD BY THE CIT(A). IT WAS SUBMITTED BY THE LD. D.R THAT THE APPEAL OF THE ASSESSEE WAS DEVOID OF ANY FORCE AND DID NOT MERIT ACCEPTANCE. 8 . WE HAVE HEARD THE AUTHORISED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. WE SHALL FIRST ADVERT TO THE PENALTY IMPOSED BY THE A.O UNDER SEC. 271(1)(C), AS REGARDS THE ADDITION OF RS. 2,509/ - MADE ON ACCOUNT OF DIVIDEND STRIPPING UNDER SEC. 94(7) OF THE ACT. WE FIND, THAT IS DISCERNIBLE FROM THE ORDER OF THE CIT(A) THAT THE ASSESSEE HAD CLAIMED THE LOSS OF RS. 2,509/ - ON SALE OF SHARES OF GAIL INDIA, AS UNDER: SAMIR RAJNIKANT HAJI VS. ACIT ITA NO. 1199/MUM/2017 A.Y 2010 - 11 5 DATE OF PURCHASE NO. OF SHARES PURCHASED AMOUNT OF PURCHASE DATE OF SALE NO. OF SHARES SOLD. AMOUNT OF SALE LOSS D ATE OF DIVIDEND AMOUNT OF DIVIDEND 28.05.2009 249 RS. 71,371 23.06.2009 249 RS. 68,868 RS. 2,502 29.09.2009 RS. 7,500/ - 28.05.2009 1 RS. 287 23.06.2009 1 RS. 280 RS. 7 09.01.2010 RS.1000 WE HAVE DELIBERATED ON THE AFORESAID FACTS AND FIGURES IN THE BACKDROP OF SEC. 94(7), AND ARE UNABLE TO COMPREHEND THAT AS TO ON WHAT BASIS THE ADDITION OF RS. 2,509/ - WAS MADE BY THE A.O UNDER SEC. 94(7) OF THE ACT. IN OUR CONSIDERED VIEW, AS THE RECORD DATE I.E THE DATE ON WHICH THE DIVIDEND WAS RECEIVED BY THE ASSESSEE I.E 29.09.2009 AND 09.01.2010, DOES NOT BRING THE PURCHASE/SALE TRANSACTION S OF THE AFORESAID SHARES WITHIN ITS SWEEP, THUS, THE LOSS CLAIMED BY THE ASSESSEE ON SALE OF SHARES C OULD NOT HAVE BEEN DISLODGED ON ACCOUNT OF ALLEGED DIVIDEND STR IPPING, AS OBSERVED BY THE LOWER AUTHORITIES. BE THAT AS IT MAY, AS THE ASSESSEE HAD ALLOWED THE ASSESSMENT TO ATTAIN FINALITY BY NOT PREFERRING ANY APPEAL BEFORE THE CIT(A), THEREFORE, OUR OBSERVATIONS RECORDED HEREINABOVE ARE ONLY IN CONTEXT OF THE PENAL TY IMPOSED ON HIM UNDER SEC. 271(1)(C) ON THE SAID COUNT. WE THUS, O N THE BASIS OF OUR AFORESAID OBSERVATIONS, NOT BE ING PERSUADED TO SUBSCRIBE TO THE OBSERVATIONS OF THE LOWER AUTHORITIES, THUS VACATE THE PENALTY IMPOSED BY THE A.O UNDER SEC. 271(1)(C) IN RESPECT OF THE ADDITION OF RS. 2,509/ - MADE UNDER SEC. 94(7) OF THE ACT. 9 . WE SHALL NOW ADVERT TO THE PENALTY IMPOSED BY THE A.O UNDER SEC. 271(1)(C), AS REGARDS THE EXCESS CLAIM OF LOSS OF RS. 37,010.87 UNDER THE HEAD FUTURE & OPTIONS . WE HAVE DELIBERATED ON THE FACTS IN CONTEXT OF THE ISSUE UNDER CONSIDERATION AND FIND THAT THERE WERE TWO BILLS DATED 31.03.2010 AND 30.03.2010, SHOWING THE CLOSING SPAN MARGIN OF F&O OF RS. 35,55,250.77 AND RS. 35,92,261.50, RESPECTIVELY. THE ASSESSEE HAD BY WAY OF AN INADVERTENT MISTAKE ACCOUNTED FOR THE CLOSING SPAN MARGIN AS PER THE BILL PERTAINING TO 30.03.2010, WHICH THUS HAD RESULTED TO EXCESS CLAIM OF LOSS OF RS. 37,010.87. WE FIND, THAT THE ASSESSEE ON REALISING HIS MISTAKE HAD EXPLAINED THE BONAFIDE REASO N LEADING TO THE SAME , AND HAD OFFERED THE AMOUNT OF RS 37,010.87 FOR TAX. INTERESTINGLY, THE A.O WHILE FRAMING THE SAMIR RAJNIKANT HAJI VS. ACIT ITA NO. 1199/MUM/2017 A.Y 2010 - 11 6 ASSESSMENT OBSERVED THAT THE SUBMISSION OF THE ASSESSEE WAS CONSIDERED AND FOUND ACCEPTABLE. THUS, IN THE BACKDROP OF THE AFORESAID OBSERVAT ION OF THE A.O, IT CAN SAFELY BE CONCLUDED THAT THE EXPLANATION OF THE ASSESSEE AS REGARDS THE REASONS LEADING TO THE AFORESAID MISTAKE WAS NOT DOUBTED BY THE A.O. BE THAT AS IT MAY, WE ARE EVEN OTHERWISE OF THE CONSIDERED VIEW THAT AS THE CLOSING SPAN MAR GIN WAS TO BE CARRIED FORWARD TO THE NEXT YEAR I.E A.Y 2011 - 12, AND WOULD STAND REVERSED IN A.Y 2011 - 12 BY DEBITING SHARES DERIVATIVE TRADING ACCOUNT AND CREDITING FUTURES MARGIN ACCOUNT, THEREBY THE PROFIT OF THE SAID ASSESSMENT YEAR I.E A.Y 2011 - 12 WILL BE REDUCED TO THE SAID EXTENT . WE THUS, ARE OF THE CONSIDERED VIEW THAT THE EXCESS CLAIM OF LOSS OF RS. 37,010.87 DURING THE YEAR, WHEN CONSIDERED IN THE BACKDROP OF THE RESULTANT EFFECT IN THE SUCCEEDING YEAR I.E A.Y 2011 - 12, WOULD BE MERELY A REVENUE NEU TRAL EXERCISE. 10 . WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ISSUE UNDER CONSIDERATION, AND IN THE TOTALITY OF THE FACTS ARE OF THE CONSIDERED VIEW THAT THE EXCESS CLAIM OF LOSS OF RS. 37,010.87 BY THE ASSESSEE WAS MERELY BACKED BY A BONAFIDE MIST AKE, AND NOT WITH AN INTENT TO EVADE ANY TAX. WE THUS, OLD A CONVICTION THAT THOUGH JUSTIFIABLY THE EXCESS LOSS CLAIMED BY THE ASSESSEE WAS LIABLE TO BE DISALLOWED, BUT THE SAME CANNOT LEAD TO IMPOSING OF PENALTY UNDER SC. 271(1)(C). ON THE BASIS OF OUR AF ORESAID OBSERVATIONS, WE VACATE THE PENALTY IMPOSED BY THE A.O UNDER SEC. 271(1)(C) AS REGARDS THE EXCESS CLAIM OF F&O LOSS OF RS. 37,010.87 BY THE ASSESSEE. 11 . WE FURTHER FIND, THAT FOR A SIMILAR REASON IN THE CASE OF COMMODITIES (MCX AND NCDX) DERIVATIVES, THE ASSESSEE BY WRONGLY ACCOUNT ING FOR THE CLOSING SPAN MARGIN OF RS. 4,71,308/ - AND RS. 59,765/ - AS ON 30.03.2010, RATHER THAN TAKING THE CLOSING SPAN MARGIN OF RS. 82,875/ - AND RS. 8,04,153/ - AS PER THE BIL L OF 31.03.2010, HAD THUS ON ONE HAND ACCOUNTED AN EXCESS MARGIN OF RS. 3,88,433/ - [RS. 4,71,308/ - ( - ) RS. 82,875/ - ] IN THE CASE OF COMMODITIES (MCX) , WHILE FOR ON THE OTHER HAND HAD ACCOUNT ED A LOWER MARGIN OF RS. 7,44,388/ - [RS. 59,765/ - ( - ) RS. 8,04,153 / - ] IN THE CASE SAMIR RAJNIKANT HAJI VS. ACIT ITA NO. 1199/MUM/2017 A.Y 2010 - 11 7 OF COMMODITIES (NCDX) . FURTHER, IN CASE OF MCX FOREIGN EXCHANGE, THE ASSESSEE FAILED TO ACCOUNT FOR THE CLOSING SPAN MARGIN OF RS. 1,08,470/ - FOR THE REASON THAT THE BILL OF 31.03.2010 WAS RECORDED ON 21.03.2010, LEADING THE ASSESSEE TO INFER THAT THERE WAS NO MARGIN OUTSTANDING AS ON 31.03.2010. RESULTANTLY, ON ACCOUNT OF THE AFORESAID OMISSION THE ASSESSEE FAILED TO ACCOUNT FOR A MARGIN OF RS. 1,08,470/ - IN RESPECT OF MCX FOREIGN EXCHANGE. WE FIND, THAT THE ASSESSEE ON REALISING HIS AFO RESAID MISTAKE S/OMISSIONS HAD EXPLAINED TO THE A.O HIS BONAFIDE S LEADING TO THE SAME , AND HAD OFFERED THE AGGREGATE AMOUNT OF RS . 4,64,426/ - [RS. 7,44,388 ( - ) RS. 3,88,483/ - (+) RS. 1,08,470/ - ] FOR TAX. INTERESTINGLY, WE FIND THAT THE A.O WHILE FRAMING THE ASSESSMENT OBSERVED , THAT THE SUBMISSION OF THE ASSESSEE AS REGARDS THE REASONS LEADING TO THE AFORESAID MISTAKES/OMISSIONS IN ACCOUNTING FOR THE CLOSING SPAN MARGINS WAS CONSIDERED AND FOUND ACCEPTABLE. THUS, IT CAN SAFELY BE CONCLUDED THAT THE EXPLANATI ON OF THE ASSESSEE AS REGARDS THE REASONS LEADING TO THE AFORESAID MISTAKES /OMISSIONS WAS NOT DOUBTED BY THE A.O. BE THAT AS IT MAY, WE ARE EVEN OTHERWISE OF THE CONSIDERED VIEW THAT AS THE CLOSING SPAN MARGINS WERE TO BE CARRIED FORWARD TO THE NEXT YEAR I .E A.Y 2011 - 12, THUS, THOUGH A HIGHER SPAN MARGIN WOULD INCREASE THE PROFIT OR DECREASE THE LOSS OF THE YEAR, BUT OPPOSITE WOULD BE THE EFFECT IN THE NEXT YEAR WHEN THE SPAN MARGIN IS REVERSED. THUS, TO BE BRIEF AND EXPLICIT, IN THE BACKDROP OF THE RESULTA NT EFFECT IN THE SUCCEEDING YEAR I.E A.Y 2011 - 12, THE ENTIRE EXERCISE WOULD BE REVENUE NEUTRAL. 12 . WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ISSUE UNDER CONSIDERATION, AND IN THE TOTALITY OF THE FACTS, ARE OF THE CONSIDERED VIEW THAT THE LOWER COMM ODITY PROFIT OF RS. 4,64,425.71 SHOWN BY THE ASSESSEE WAS MERELY BACKED BY A BONAFIDE MISTAKE ON HIS PART , AND NOT WITH AN INTENT TO EVADE ANY TAX. WE THUS, ARE OF THE CONSIDERED VIEW THAT THOUGH JUSTIFIABLY AN ADDITION OF THE AFORESAID SHORT COMMODITY PROFIT WAS CALLED FOR IN THE HANDS OF THE ASSESSEE, BUT THE SAME CANNOT LEAD TO IMPOSING OF PENALTY UNDER SC. 271(1)(C). ON THE BASIS OF OUR AFORESAID OBSERVATIONS, WE VACATE THE PENALTY IMPOSED BY THE A.O UNDER SEC. 271(1)(C) AS REGARDS THE SHORT COMMODI TY PROFIT OF RS. 4,64,425.71 SHOWN BY THE ASSESSEE IN HIS RETURN OF INCOME . SAMIR RAJNIKANT HAJI VS. ACIT ITA NO. 1199/MUM/2017 A.Y 2010 - 11 8 13 . WE THUS, IN TERMS OF OUR AFORESAID OBSERVATIONS SET ASIDE THE ORDER OF THE CIT(A), AND DELETE THE PENALTY OF RS. 1,66,302/ - IMPOSED BY THE A.O UNDER SEC. 271(1)(C) OF THE ACT. 14 . THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN COURT ON 12 .10.2018 SD/ - SD/ - ( G.S PANNU) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 12 . 10 .2018 PS. ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI SAMIR RAJNIKANT HAJI VS. ACIT ITA NO. 1199/MUM/2017 A.Y 2010 - 11 9