DCIT CIR 3(3)(2), MUMBAI V. TCFC FINANCE LTD, MUMBAI

ITA 1581/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8006 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 21-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y K BHASKAR
• Keywords: Speculation loss; Wrong claim; Difference of opinion
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G , MUMBAI BEFORE SHRI RAJENDRA, HON'BLE ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER ITA NO .1581 /MUM/201 6 (A.Y: 2009 - 10) D.C.I.T., CIRCLE 3(3)(2), ROOM NO . 609, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 V . M/S. TCFC FINANCE LTD., 501 - 502, RAHEJA CHAMBERS, NARIMAN POINT, MUMBAI 400 021 PAN NO: AAACR 2710 H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANUJ KISNADWALA DEPARTMENT BY : SHRI Y.K. BHASKAR DATE OF HEARING : 16 .11.2017 DATE OF PRONOUNCEMENT : 20 .12 .2017 O R D E R PER C.N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 8, MUMBAI DATED 31 ST DECEMBER, 2015 FOR THE ASSESSMENT YEAR 2009 - 10 IN DELETING THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT. 2 ITA NO.1581/MUM/2016 (A.Y: 2009 - 10) M/S. TCFC FINANCE LTD. 2. BRIEFLY STATED THE FACTS ARE THAT, ASSESSEE WHICH IS ENGAGED IN THE BUSINESS OF FINANCE, INVESTMENTS , DERIVATIVES , TRADING IN SHARES AND SECURITIES FI LED RETURN OF INCOME ON 19.09.2009 DECLARING LOSS OF . 16, 55,35,272/ - AND THE ASSESSMENT WAS COMPLETED ON 28.11. 2011 U/S. 143(3) OF THE ACT DETERMINING T HE INCOME OF THE ASSESSEE AT .6,42,72,170/ - . THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT TRE ATED BUSINESS LOSS OF .22,83,15,459/ - AS LOSS FROM SPECULATIVE BUSINESS AND ALSO DISALLOWED LOSS FROM OPTIONS AND FU TURES TREATING IT AS SPECULATIVE LOSS A ND INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. ASSESSEE PREFERRED APPEAL BEFORE THE LD.CIT(A) AND THE LD.CIT(A) CONFIRMED THE DISALLOWANCE. ON FURTHER APPEAL TO ITAT, ITAT SUSTAINED THE ACTION OF THE ASSESSING OFFICER IN TREATING THE LOSS IN SHARE TRADING AS SPECULATION LOSS. HOWEVER, SUCH LOSS WAS MODIFIED AND RESTRICTED TO .14,97,82,556/ - . IN RESPECT OF LOSS ON OPTIONS AND FU TURE S , T HE TRIBUNAL SUSTAINED THE DISALLOWANCE AT .12,46,956/ - . THE ASSESSING OFFICER INITIAT ED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT AND PASSED ORDER DATED 28.03.2014 LEVYING PENALTY OF . 5,13,64,934/. ASSESSEE PREFERRED APPEAL BEFORE LD.CIT(A) AND THE LD.CIT(A) DELETED THE PENALTY AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US . 3 ITA NO.1581/MUM/2016 (A.Y: 2009 - 10) M/S. TCFC FINANCE LTD. 3. LD.DR V EHEMENTLY SUPPORTING THE ORDER OF THE ASSESSING OFFICER IN LEVYING PENALTY U/S. 271(1) (C) OF THE ACT ON THE DISALLOWANCES MADE BY THE ASSESSING OFFICER. LD.DR SUBMITS THAT ASSESSEE MADE A WRONG CLAIM BY S HOWING THE SPECULATION LOSS A S BUSINESS LOSS OF THE ASSESSEE, AND T HEREFORE, THE ASSESSING OFFICER HAS RIGHTLY HELD THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS AND CONCEALED INCOME . 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT ASSESSEE HAS FURNISHED A LL THE PARTICULARS OF INCOME IN THE RETURN IN R ESPECT OF THE LOSS INCURRED BY ASSESSEE IN TRADING IN SHARES AND THERE WAS NO INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME AS THE ASSESSEE FULLY DISCLOSED THE TRANSACTIONS IN THE BOOKS OF ACCOUNTS AS WELL AS THE RETURN OF INCOME. HE FURTHER S UBMITS THAT , IT IS ONLY ON ACCOUNT OF DIFFERENCE OF OPINION , THERE IS A CHANGE IN HEAD OF INCOME I.E. UNDER WHICH HEAD THE LOSS IS TO BE ASSESSED AND IN SUCH CIRCUMSTANCES THE PENALTY U/S. 271(1)(C) OF THE ACT IS NOT ATTRACTED. HE P LACED RELIANCE ON THE D ECISIONS OF T HE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. AURIC INVESTMENT AND SECURITIES LTD. [310 ITR 12 1]. HE ALSO P LACED RELIANCE ON THE COORDINATE BENCH DECISION IN THE CASE OF ACIT V. M/S. CLARIDGES INVESTMENTS AND FINANCE P. LTD. IN ITA.NO. 410/MUM /2011 D ATED 07.05.2015 IN SUPPORT OF HIS CONTENTIONS. HE FURTHER SUBMITS THAT THE COORDINATE BENCH IN THIS CASE CONSIDERED A SIMILAR SITUATION WHERE THE ASSESSING OFFICER ASSESSED LOSS 4 ITA NO.1581/MUM/2016 (A.Y: 2009 - 10) M/S. TCFC FINANCE LTD. UNDER THE HEAD SPECULATIVE BUSINESS AS AGAINST BUSINESS LOSS DEC LARED BY THE ASSESSEE , AND THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT WAS DELETED FOLLOWING THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. AURIC INVESTMENT AND SECURITIES LTD (SUPRA). THEREFORE, HE SUBMITS THAT IN VIEW OF THESE DECIS IONS THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT IS TO BE DELETED . 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IN THIS CASE WHILE COMPLETING THE ASSESSMENT , THE ASSESSING OFFICER ASSESSED BUSINESS LOSS AS SPECULATIO N LOSS WHICH WAS CONFIRMED BY THE LD.CIT(A) AND ALSO THE TRIBUNAL. PENALTY WAS LEVIED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME. LD.CIT(A) DELETED THE PENALTY BY CONSIDERING VARIOUS DECISIONS OF THE HON'BLE JURISDICTION AL HIGH COURT OBSERVING AS UNDER: - 5.1 THE MAIN BUSINESS OF THE APPELLANT IS DEALING IN SHARES. THE APPELLANT PURCHASED SHARES AT A TIME WHEN MARKET WAS AT ALL TIME HIGH. DUE TO MARKET INDICES CRASHED THE APPELLANT SUFFERED VALUATION LOSS OF RS. 22.83 CRORES. THE APPELLANT TREATED THE LOSS AS BUSINESS LOSS AND CARRIED FORWARD THE SAME ON THE GROUND THAT THE MAIN BUSINESS OF THE APPELLANT IS PURCHASE/SALE OF SHARES AN D LOSS ON ACCOUNT OF VALUATION OF STOCK OF SHARES IS PART OF THE BUSINESS LOSS OF THE APPELLANT. THE ASSESSING OFFICER, HOWEVER, TREATED THE LOSS ON VALUATION OF CLOSING STOCK HELD AS STOCK IN TRADE AS SPECULATION LOSS AND ALLOWED IT TO BE CARRIED FORWARD TO BE ABSORBED FROM THE SPECULATIVE PROFITS, IF ANY, IN SUBSEQUENT YEARS. 5.2 DURING THE YEAR UNDER CONSIDERATION THE APPELLANT HAS CLAIMED AN AMOUNT OF RS. 12,46,965/ - TOWARDS LOSS IN OPTION AND FUTURES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A PPELLANT HAS ACCEPTED BEFORE THE ASSESSING OFFICER THAT THE LOSS ON SALE OF COMMODITY DERIVATIVES IS SPECULATION LOSS. 5 ITA NO.1581/MUM/2016 (A.Y: 2009 - 10) M/S. TCFC FINANCE LTD. 5.3 I FIND THAT THE APPELLANT HAS DULY DISCLOSED THE ABOVE LOSSES IN ITS RETURN OF INCOME. THE APPELLANT'S CLAIM OF BUSINESS LOSS TREATED BY THE ASSESSING OFFICER AS SPECULATIVE LOSS IS DIFFERENT TREATMENTS FOLLOWED BY THE APPELLANT AS WELL AS ASSESSING OFFICER. 5.4 IT IS A SETTLED LEGAL POSITION THAT MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FU RNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. 5.5. IN COMING TO A DECISION IN THIS CASE, I FIND SUPPORT IN THE FOLLOWING DECISIONS OF HON'BLE SUPREME COURT: THE HON'BLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS (P.) LTD. (322 ITR 158) (REFER PAGE NO. 52 TO 56 OF LPB),IT IS HELD THAT THE DISALLOWANCE MADE BY THE ASSESSING AUTHORITY IN THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT WERE SOLELY ON ACCOUNT OF DIFFERENT VIEWS TAKEN ON THE SAME SET OF FACTS AND, THEREFORE, THEY COULD, AT THE MOST, BE TERMED, AS DIFFERENCE OF OPINION BUT NOTHING TO DO WITH THE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. EVEN IF THE APPELLANT MAKES A PURPORTED WRONG CLAIM IN ROI BUT THE SAME IS DIS CLOSED IN ROI, PENALTY IS NOT LEVIABLE. SUCH VIEW HAS BEEN TAKEN BY THE HON'BLE BOMBAY HIGH COURT, BEING THE JURISDICTIONAL HIGH COURT IN THE APPELLANT'S CASE, IN THE CASE OF CIT VS. NALIN P. SHAH (HUF) (40 TAXMANN.COM 86). IN THAT CASE, THE RESPONDENT - AP PELLANT HAD DECLARED LONG TERM CAPITAL LOSS OF RS. 4.39 CRORES WHICH WERE INCLUSIVE OF LOSS INCURRED ON THE SALE OF US - 64 UNITS. THE ASSESSING OFFICER DISALLOWED THE LOSS ON SALE US - 64 UNITS ON THE GROUND THAT WHERE INCOME FROM PARTICULAR SOURCE WAS EXEMPT FROM TAX THEN THE LOSS FROM SUCH SOURCE COULD NOT BE SET OFF FROM ANOTHER SOURCE UNDER THE SAME HEAD OF INCOME. IN VIEW OF THE ABOVE, THE ASSESSING OFFICER 'ALSO INITIATED PENALTY PROCEEDINGS AND IMPOSED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE HON 'BLE BOMBAY HIGH COURT BY DISMISSING THE APPEALS FILED BY THE DEPARTMENT AFFIRMED THE ORDER OF THE HON'BLE TRIBUNAL AND HELD THAT: 'THE TRIBUNAL IN THE IMPUGNED ORDER HELD THAT THE RESPONDENT - APPELLANT HAD IN ITS RETURN OF INCOME FILED A NOTE WITH ITS CO MPUTATION OF INCOME DISCLOSING ALL DETAILS ABOUT THE SALE OF US - 64 UNITS. THE LOSS AND RESULTANT CARRY FORWARD. FURTHER, ALL DETAILS WERE DISCLOSED IN ITS 6 ITA NO.1581/MUM/2016 (A.Y: 2009 - 10) M/S. TCFC FINANCE LTD. RETURN OF INCOME AS IS EVIDENT FROM THE FACT THAT THE ASSESSING OFFICER GATHERED INFORMATION ABOUT T HE CARRY FORWARD LOSS AND SALE OF UNITS FROM RETURN FILED BY THE RESPONDENT - APPELLANT. THE TRIBUNAL HELD THAT FROM THE AFORESAID FACTS AT THE HIGHEST IT CAN BE SAID THAT THE CLAIM OF THE APPELLANT WAS NOT SUSTAINABLE IN LAW BUT THERE WAS NO FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME ON THE PART OF THE RESPONDENT - APPELLANT. THUS, THE PENALTY WAS SET ASIDE. FURTHER, THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SESA RESOURCES LTD VS. ACIT (219 TAXMAN 92) HELD THAT WHERE THERE WAS NO DISPUT E THAT THE APPELLANT DISCLOSED ALL THE FACTS AND THE APPELLANT DID NOT CONCEAL ANY FACTS, AND, FURTHER THAT BASED ON THE DISCLOSED MATERIAL, THE APPELLANT SOUGHT THE DEDUCTION WHICH WAS DENIED ON THE GROUND THAT IT WAS NOT ENTITLED TO THE SAME AS A MATTER OF LAW, THE HON'BLE TRIBUNAL WAS IN ERROR IN HOLDING THAT MERELY BECAUSE THE CLAIM FOR DEDUCTION WAS DENIED THE APPELLANT IS LIABLE TO PAY A PENALTY. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF DIT VS. ADMINISTRATOR OF THE ESTATE OF LATE MR. E.F. DINSHAW (218 TAXMAN 125) HELD THAT PENALTY FOR CONCEALMENT OF INCOME, CANNOT BE LEVIED FOR CLAIM BEING REJECTED BY REVENUE, WHERE FULL DETAILS WERE DISCLOSED IN RETURN. THAT WAS THE CASE IN WHICH THE APPELLANT CLAIMED THAT SECTION 94(7) OF THE ACT DID NOT APPLY T O ITS CASE SINCE THAT PROVISION REFERS TO 'SALE' WHEREAS THE APPELLANT'S CASE WAS THAT OF REDEMPTION. THE HON'BLE BOMBAY HIGH COURT, FOLLOWED THE RATIO LAID DOWN IN THE DECISION OF RELIANCE PETROPRODUCTS (SUPRA) AND HELD THAT SINCE THE APPELLANT HAD GIVEN ALL THE DETAILS AND ITS CLAIM WAS BASED ON BONA FIDE BELIEF, PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS NOT LEVIABLE. SIMILARLY, THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. M/S.ADITYA BIRLA NOVA LIMITED (ITA NO. 3899 OF 2010) THAT THE ASSESSE E HAD FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS ROI, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NOT. THE HON'BLE BOMBAY HIGH COURT FURTHER HELD THAT MERELY BECAUSE THE ASSESSEE 7 ITA NO.1581/MUM/2016 (A.Y: 2009 - 10) M/S. TCFC FINANCE LTD. 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 WHER E THE APPELLANT'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 HONBLE TRIBUNAL IN THE QUANTUM APPEAL, YET, THE HON'BLE TRIBUNAL DELETED THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT SINCE THE APPELLANT HAD DISCLOSED ALL THE RELEVANT DETAILS. 5.6 THE TENETS FOR DETERMINING CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS HAVE BEEN LAID OUT IN THE ABOVE JUDGMENTS. I FIND THE FACTS AND CIRCUMSTANCES IN THE INSTANT CASE ARE COVERED BY THE PRINCIPLES LAID DOWN IN THE ABOVE MENTIONED JUDGMENTS OF THE APEX COURT. PENALTY U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 OF RS.5,13,34,934/ - LEVIED FOR ALLEGED INACCURATE CLAIM OF BUSINESS LOSS IS THEREFORE DELETED. 6. WE ALSO FIND THAT ON SIMILAR CIRCUMSTANCE THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. AU RIC INVESTMENT AND SECURITIES LTD (SUPRA) HELD THAT THERE WAS NOTHING ON RECORD TO SHOW THAT ON FURNISHING ITS RETURN OF INCOME , THE ASSESSEE HAD EITHER CONCEALED ITS INCOME OR HAD FURNISHED ANY INACCURATE PARTICULARS OF INCOME. THE MERE TREATMENT OF BUSI NESS LOSS AS SPECULATION LOSS BY THE ASSESSING OFFICER DID NOT AUTOMATICALLY WARRANT THE INFERENCE OF CONCEALMENT OF INCOME. FOLLOWING THIS DECISION THE COORDINATE BENCH IN THE CASE OF ACIT V. M/S. CLARIDGES INVESTMENTS AND FINANCE P. LTD (SUPRA) HELD AS UNDER: - 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FAA AND CONTENDED THAT THE DISALLOWANCE MADE BY THE AO HAD CONVERTED THE BUSINESS LOSS INTO SPECULATIVE LOSS FOLLOWING THE PROVISION OF EXPLANATION TO SECTION 73 OF THE ACT, THAT THE ADDITION WERE MAD E ON 8 ITA NO.1581/MUM/2016 (A.Y: 2009 - 10) M/S. TCFC FINANCE LTD. ACCOUNT OF APPLICATION OF DEEMING PROVISIONS AND NOT ON ACCOUNT OF ANY CONCEALMENT OF ANY PARTICULAR OF INCOME, THAT ASSESSEE HAD NOT SUPPRESSED ANY INCOME OR CLAIMED ANY WRONG EXPENDITURE, THAT AT THE TIME OF FILING OF RETURN THE ASSESSEE HAD MENTION ED ABOUT THE DEALING WITH SHARES OF OTHER COMPANY, THAT THE AO HAD FOUND ABOUT THE LOSS FROM THE PROFIT AND LOSS ACCOUNT FILED BY THE ASSESSEE. THE ASSESSEE RELIED UPON THE JUDGMENT OF THE HONBLE SUPREME COURT DELIVERED IN THE CASE OF RELIANCE PETRO PRODU CTS LTD.(322ITR158). IT WAS FURTHER ARGUED 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 CAS ES 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 SP ECULATIVE 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 DELETED THE PENALTY LEVIED BY THE AO. 4. BEFORE US, DEPARTMENTAL REPRESENTATIVE(DR)RELIED UPON THE ORDER OF THE AO. AUTHORIZED REPRESENTATIVE(AR)SUPPORTED THE ORDER OF THE FAA AND ARGUED THAT THE ASSESSEE HAD NOT CONCEALED ITS PARTICULARS OF INCOME, THAT THE AO WAS NOT JUSTIFIED LEVY IN PENALTY JUST BECAUSE PARTICULAR ITEM OF INCOME WAS ASSESSED UNDER DIFFERENT HEAD OF INCOME. HE RELIED UPON THE CASE AURIC INVESTMENTS AND SECURITIES LTD. (SUPRA). 5. WE HAVE HEARD THE RIVAL SUBM ISSION AND PERUSED THE MATERIAL ON RECORD. WE FIND THE AO HAD LEVIED PENALTY U/S. 271(1)(C) AS SPECULATIVE LOSS WAS ASSESSED UNDER THE HEAD BUSINESS LOSS. WE ARE OF OPINION THAT MERE CHANGE OF HEAD OF INCOME SHOULD NOT RESULT IN AUTOMATIC LEVY OF CONCEALME NT PENALTY. THE DETAIL ABOUT THE SPECULATIVE LOSS WAS AVAILABLE ON THE RECORD. THEREFORE, IT CANNOT BE HELD THAT ASSESSEE HAD FILED INACCURATE PECULIARS OF INCOME OR HAD CONCEALED THE PARTICULARS OF INCOME. EVEN IF A UNSUBSTANTIATED CLAIM IS MADE IN THE RE TURN OF INCOME, IT CANNOT BE HELD THAT THE ASSESSEE IS LIABLE FOR LEVY OF PENALTY 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 CONTENT ION BETWEEN THE AO AND THE ASSESSEE. BUT SUCH DIFFERENCES SHOULD NOT AND CANNOT RESULT INVOKING THE PENAL PROVISION OF CHAPTER XXI OF THE ACT. WE WOULD LIKE TO REFER TO THE JUDGMENT OF THE HONBLE DELHI HIGH COURT AURIC INVESTMENTS AND SECURITIES LTD. (SUP RA) RELIED UPON BY THE FAA IN THAT MATTER THE CLAIM OF BUSINESS LOSS WAS DISALLOWED AND IT WAS HELD THAT LOSS WAS TO BE ASSESSED UNDER THE HEAD SPECULATIVE LOSS. THE AO LEVIED PENALTY U/S.271(1)(C) 9 ITA NO.1581/MUM/2016 (A.Y: 2009 - 10) M/S. TCFC FINANCE LTD. FOR CONCEALMENT OF PARTICULARS OF INCOME. WHEN THE MATTER TRAVELED TO THE HONBLE HIGH COURT, IT DECIDED THE ISSUE AS UNDER: DURING THE ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2001 - 02 , THE ASSESSING OFFICER FOUND THAT THE LOSS CLAIMED BY THE ASSESSEE WAS SPECULATIVE IN NATURE TO BE ADJUSTED AGAINST SPECU LATIVE INCOME ONLY AND AS THE INCOME WAS ASSESSED AT A LOSS, THE LOSS SHOWN BY THE ASSESSEE COULD NOT BE ADJUSTED. THEREFORE, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT, 1961, AND IMPOSED PENALTY. THE PENALTY WAS CANCELLED BY THE COMMISSIONER OF INCOME - TAX (APPEALS) AND THIS WAS UPHELD BY THE TRIBUNAL.. THERE WAS NOTHING ON RECORD TO SHOW THAT IN FURNISHING ITS RETURN OF INCOME, THE ASSESSEE HAD EITHER CONCEALED ITS INCOME OR HAD FURNISHED ANY INACCURA TE PARTICULARS OF INCOME. THE MERE TREATMENT OF THE BUSINESS LOSS AS SPECULATION LOSS BY THE ASSESSING OFFICER DID NOT AUTOMATICALLY WARRANT THE INFERENCE OF CONCEALMENT OF INCOME. THE CANCELLATION OF PENALTY WAS VALID. 7. IN VIEW OF THE ABOVE, WE DO NOT SE E ANY VALID REASON TO INTERFERE WITH THE FINDINGS OF THE LD.CIT(A) IN DELETING THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT. THUS, WE SUSTAIN THE ORDER OF THE LD.CIT(A) AND REJECT THE GROUNDS OF REVENUE. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 20 TH DECEMBER , 2017. SD/ - SD/ - ( RAJENDRA ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 20 / 12 / 2017 VSSGB , SPS 10 ITA NO.1581/MUM/2016 (A.Y: 2009 - 10) M/S. TCFC FINANCE LTD. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, (ASSTT. REGISTRAR) ITAT, MUM