ITO, Ward - 6(2), Kolkata, Kolkata V. M/s. Lily Exporters Pvt. Ltd., Kolkata

ITA 1632/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54469 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2011
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 20-07-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 18-08-2010
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Assessee Lawyers: R SALARPURIA
• Keywords: Business income; Question of law; Difference of opinion

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A , KOLKATA [ () , , . .. . ! ! ! !. .. . , , , , '# ] ]] ] [BEFORE HONBLE SRI MAHAVIR SINGH, JM & HONBLE S RI C. D. RAO, AM] % % % % /ITA NOS.1005/KOL/2008 & 1632/K/2010 &' ()/ ASSESSMENT YEAR : 2005-06 (+, / APPELLANT ) - & - ( ./+, /RESPONDENT) I.T.O., WARD-6(2), KOLKATA -VERSUS- M/S.LILY EXPO RTERS PVT. LTD. (PAN:AAACL 5836 C) +, 0 1 '/ FOR THE APPELLANT: SHRI NIRAJ KUMAR ./+, 0 1 '/ FOR THE RESPONDENT: SHRI R.SALARPURIA '2 / ORDER ( (( ( . .. . ! ! ! !. .. . ) )) ), , , , '# PER SHRI C.D.RAO, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 19.03.2008 OF THE CIT(A)-VI, KOLKATA PERTAINING TO A.YR. 2005-06. 2. IN THIS APPEAL THE REVENUE HAS TAKEN FOUR GR OUNDS AND THIS TRIBUNAL HAS CONFIRMED THE ORDERS OF THE LD. CIT(A) IN RESPECT O F GROUND NO.1. IN RESPECT OF GROUND NO.2 AND 3 THIS TRIBUNAL HAS SET ASIDE THE MATTER TO THE FILE OF THE AO. AS REGARDING 4 TH AND THE LAST GROUND THE TRIBUNAL HAS REVERSED THE ORDERS OF THE LD. CIT(A) AND RESTORED THAT OF THE AO. 3. AGAINST THE REVERSAL OF THE ORDERS OF THE L D. CIT(A) THE ASSESSEES APPEAL BEFORE THE HONBLE JURISDICTIONAL HIGH COURT AND THE HONB LE JURISDICTIONAL HIGH COURT IN ITS ORDER DATED 16 TH MARCH, 2010 HAS SET ASIDE THE ORDERS OF THIS TRIBU NAL AND REMANDED THE MATTER FOR FRESH DECISION. 3.1. IN VIEW OF THE ABOVE THIS APPEAL IS FIXED FO R HEARING BEFORE THIS TRIBUNAL TO RE- ADJUDICATE GROUND NO.4 RAISED BY THE REVENUE WHICH IS AS UNDER :- 2 4. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL A S ON FACTS BY DIRECTING THE ASSESSING OFFICER TO TREAT THE SURPLUS OF RS.1,62,0 5,046/- EARNED BY THE ASSESSEE ON SALE AND PURCHASE OF SHARES AS SHORT TERM CAPITA L GAIN INSTEAD OF BUSINESS INCOME. 4. THE RELEVANT FACTS AS APPEARED FROM THE OR DER OF THIS TRIBUNAL IN RESPECT OF THE ABOVE ISSUE ARE AS UNDER :- 18. THE RELEVANT FACTS ARE THAT THE A.0. OBSERVED ON PERUSAL OF PROFIT & LOSS A/C. AND ALSO THE DOCUMENT PRODUCED AT THE TIME OF HEARING THAT THE ASSESSEE- COMPANY PURCHASED AND SOLD THE SHARES OF DIFFERENT COMPANIES, THE DETAILS OF WHICH ARE GIVEN IN TABLE 2 BY THE A.0. AT PAGES 4 T O 5 OF THE ASSESSMENT ORDER. ON PERUSAL OF THE SAID DETAILS, THE A.O. STATED THA T THE ASSESSEE-COMPANY PURCHASED AND SOLD MOST OF THE SHARES WITHIN A RANG E OF 1 TO 150 DAYS. HOWEVER, MOST OF THE SHARES WERE SOLD WITHIN 1 TO 1 0 DAYS AFTER PURCHASE. THEREFORE, THE FREQUENCY OF PURCHASE AND SALE OF TH OSE SHARES WAS VERY HIGH. HE FURTHER OBSERVED THAT ALL THE SHARES, DETAILS OF WHICH ARE GIVEN IN THE TABLE 2 OF THE ASSESSMENT ORDER, WERE PURCHASED DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AND ALSO SO LD DURING THE SAME YEAR. THE ASSESSEE HAD DONE VERY SUBSTANTIAL AMOUNT OF TR ANSACTION AND THE MAGNITUDE OF PURCHASE AND SALES AND THE RATIO BETWE EN PURCHASES AND SALES AND THE HOLDING WAS VERY LOW. THEREFORE, THE ASSESS EE HAD DONE PURCHASES AND SALES WITH THE MOTIVE OF EARNING QUICK PROFIT ON SU CH TRANSACTIONS. THE DIVIDEND EARNING WAS NOT THE SOLE MOTIVE OF THE ASSESSEE. TH E A.O. HAS HELD THAT THE TRANSACTIONS WERE INTENDED BY THE ASSESSEE FOR THE PURPOSE OF BUSINESS TRANSACTION. THE SHARES WERE NOT ACQUIRED FROM THE PRIMARY MARKET FOR LONG- TERM HOLDING; RATHER THEY WERE ACQUIRED FROM THE SE CONDARY MARKET WITH A VIEW TO SALE AND EARN QUICK PROFIT. CONSIDERING THE ABOV E, THE A.O. HELD THAT THE PROFIT OF RS.1 ,62,05,046/- WAS THE NORMAL BUSINESS PROFIT OF THE ASSESSEE AND NOT THE SHORT-TERM CAPITAL GAIN AS CLAIMED BY THE A SSESSEE. THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 19. THE LD. CIT(A) CONSIDERED THE SUBMISSION OF THE ASSESSEE THAT THE MOTIVE OF THE ASSESSEE WAS TO PURCHASE AND HOLD THE SHARES ON INVESTMENT A/C. THE ASSESSEE DEBITED THE COST OF ACQUIRING THE SAID SHA RES TO INVESTMENT A/C. THE ASSESSEE SOLD THOSE SHARES WHEN THE ASSESSEE FOUND THAT THE SHARES HAD APPRECIATED IN VALUE. THE FUND DEPLOYED IN INVESTME NT OF THOSE SHARES WAS OWN FUND. THE LD. CIT(A) HAS STATED THAT THERE WAS NO H UGE QUANTITY OF SHARE PURCHASED NOR THERE WAS REPETITION OF TRANSACTION I N SAME SCRIPT. THE ASSESSEE- COMPANY INVESTED IN SHARE OF BLUE CHIP COMPANIES AN D THERE WAS NO FREQUENT TRANSACTION IN EACH SCRIPT. THE LD. CIT(A) HAS FURT HER STATED THAT THE ASSESSEE COMPANY INVESTED IN SCRIPT OF 22 COMPANIES IN THE F INANCIAL YEAR. THEREFORE, IT COULD NOT BE CALLED FREQUENT TRADING. THE LD. CIT(A ) HAS STATED THAT IF THE HOLDING PERIOD IS LESS THAN 365 DAYS, IT WILL BE TR EATED AS SHORT-TERM INVESTMENT AND IF THE PERIOD IS MORE THAN 365 DAYS, IT WOULD B E TREATED AS LONG-TERM INVESTMENT. THEREFORE, THE NET SURPLUS RECEIVED BY THE ASSESSEE ON INVESTMENT 3 COULD NOT BE BUSINESS OF ASSESSEE-COMPANY. ACCORDIN GLY, THE LD. CIT(A) HAS DIRECTED THE A.0. TO TREAT THE SURPLUS ON SHORT-TER M INVESTMENT AS SHORT- TERM CAPITAL GAIN. HENCE, THE DEPARTMENT IS IN FURTHER A PPEAL BEFORE THE TRIBUNAL. 20. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE SUBMITTED THAT THE A.0. WAS JUSTIFIED TO TREAT THE AMOUNT OF SURPLUS O N PURCHASE AND SALE OF SHARES AS BUSINESS PROFIT. THE LD. D.R. SUBMITTED THAT THE HONBLE APEX COURT IN THE CASE OF G. VENKATASWAMI NAIDU & CO. -VS.- COMMISSIO NER OF INCOME TAX [35 ITR 594] HAS LAID DOWN CERTAIN PRINCIPLES TO ASCERT AIN AS TO WHETHER THE TRANSACTION IS FOR THE PURPOSE OF INVESTMENT OR IS AN ADVENTURE IN THE NATURE OF TRADE. THE LD. D.R. SUBMITTED THAT CONSIDERING THE PERIOD OF HOLDING OF SHARES AND THE QUANTITY OF THE SCRIPTS PURCHASED AND RE-SO LD BY THE ASSESSEE ESTABLISH THAT THE TRANSACTION WAS IN THE NATURE OF TRADE AND NOT IN THE NATURE OF INVESTMENT. THE LD. D.R. SUBMITTED THAT THE HONBLE APEX COURT IN THE CASE OF ANIL JAIN - VS.- COMMISSIONER OF INCOME TAX & ANOTH ER [294 ITR 435] HAS HELD THAT IT IS A RELEVANT FACTOR FOR DETERMINING W HETHER THE TRANSACTION WAS ONE OF BUSINESS OR AN ADVENTURE IN THE NATURE OF TRADE, IS TO WHETHER THE ASSESSEE HAD CARRIED ON SIMILAR TRANSACTIONS OR NOT. THE LD. D.R. SUBMITTED THAT IN THE BACK OF MIND OF THE ASSESSEE IS TO CAPITALIZE THE F LUCTUATION IN THE MARKET AND NOT THE INTENTION TO HOLD THE SHARES AS AN INVESTME NT. THE LD. D.R. SUBMITTED THAT THE ORDER OF THE A .0. BE CONFIRMED. 21. ON THE OTHER HAND, THE ID. AUTHORIZED REPRE SENTATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE ID. CIT(A). HE SUBMITTED THAT THE ASSES SEE MADE THE INVESTMENT IN SHARES FROM ITS OWN FUND NOT FROM THE BORROWED FUND AND THE SHARES WERE PURCHASED WITH AN INTENTION TO HOLD SUC H PURCHASE BY WAY OF INVESTMENT. HE FURTHER SUBMITTED THAT THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF G. VENKATASWAMI NAIDU & CO.(SUPRA) IS N OT APPLICABLE TO THE CASE OF THE ASSESSEE AS THE SAID CASE RELATES TO THE TRA NSACTION IN LAND. THE LD. A.R. FURTHER SUBMITTED THAT THE PROVISION OF SECTION 2(4 2A) ITSELF PROVIDES THAT IF THE SHARES ARE HELD FOR A PERIOD OF LESS THAN ONE YEAR, IT IS A SHORT-TERM CAPITAL GAIN. THEREFORE, THE ACT ITSELF PROVIDES THE HOLDIN G OF SHARES FOR A SHORT-TERM PERIOD AND STILL TO TREAT THE SAME AS AN INVESTMENT . HE SUBMITTED THAT THE ORDER OF THE LD. CIT(A) BE CONFIRMED. 22. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW AND THE SUBMISSIONS OF THE LD. REPRESENTATIVES OF BOTH THE PARTIES AND HAVE ALSO CONSIDERED THE CASES CITED AT THE TIME OF HEARING O F THE APPEAL. IT IS A FACT THAT THE INTENTION OF THE PERSON AS TO WHETHER A PARTICU LAR TRANSACTION IS IN THE NATURE OF INVESTMENT OR IN THE NATURE OF TRADE IS T O BE ASCERTAINED, IS A MIXED QUESTION OF LAW AND FACTS. IF A PERSON INVESTS MONE Y IN ACQUIRING THE SHARES OR ANY OTHER ASSET INTENDING TO HOLD IT, ENJOYS ITS IN COME FOR SOMETIME, AND THEN SELLS IT AT A PROFIT, IT WOULD BE A CLEAR CASE OF C APITAL ACCRETION AND NOT PROFIT DERIVED FROM AN ADVENTURE IN THE NATURE OF TRADE. H OWEVER, IN DECIDING THE CHARACTER OF SUCH TRANSACTION, AS HELD BY THE HONB LE APEX COURT IN THE CASE OF G. VENKATASWAMI NAIDU & CO. (SUPRA), SEVERAL FACTOR S ARE RELEVANT, SUCH AS, E.G., WHETHER THE PURCHASER WAS A TRADER AND THE PU RCHASE OF THE COMMODITY 4 AND ITS RESALE WERE ALLIED TO HIS USUAL TRADE OR BU SINESS OR INCIDENTAL TO IT, THE NATURE AND QUANTITY OF THE COMMODITY PURCHASED AND RESOLD; ANY ACT SUBSEQUENT TO THE PURCHASE TO IMPROVE THE QUALITY O F THE COMMODITY PURCHASED AND THEREBY MAKE IT MORE READILY RE-SALEABLE; ANY A CT PRIOR TO THE PURCHASE. SHOWING A DESIGN OR PURPOSE; THE SIMILARITY OF THE TRANSACTION TO OPERATIONS USUALLY ASSOCIATED WITH TRADE OR BUSINESS; THE REPE TITION OF THE TRANSACTION; THE ELEMENT OF PRIDE OF POSSESSION. IF WE APPLY THE ABO VE PRINCIPLES TO THE FACTS OF THE CASE BEFORE US, WE OBSERVE THAT THE ASSESSEE HA S PURCHASED DURING THE COURSE OF FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE SCRIPTS OF 22 COMPANIES. ALL THE SHARES WERE PU RCHASED AND ALSO SOLD IN THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDE R CONSIDERATION. ON PERUSAL OF THE TABLE 2 AT PAGES 4 TO 6 OF THE ASSESSMENT OR DER, WE OBSERVE THAT SOME OF THE SCRIPTS WERE RETAINED BY THE ASSESSEE FOR A PER IOD OF 1 TO 10 DAYS ONLY. THERE WERE ONLY A VERY FEW SHARES, THE DETAILS OF W HICH ARE GIVEN BY THE AO IN TABLE 3 AT PAGE 7 OF THE ASSESSMENT ORDER THAT THE SHARES WERE NOT SOLD DURING THE YEAR AND THE ASSESSEE RECEIVED DIVIDEND THEREFR OM. THEREFORE, WE AGREE WITH THE A.O. THAT THE DIVIDEND EARNING WAS NOT THE SOLD MOTIVE OF THE ASSESSEE BUT THE MOTIVE WAS ONLY TO EARN QUICK PROFIT THROUG H TRADING OF SHARES. THE AO HAS ALSO STATED THAT THE INFRASTRUCTURE EMPLOYED IS INDICATIVE OF THE FACT THAT THOSE SHARES WERE ACQUIRED BY THE ASSESSEE WITH A C LEAR MOTIVE OF EARNING QUICK PROFIT. THE ASSESSEE HAS NOT DISPUTED THE SAI D OBSERVATION OF THE AO BEFORE THE LD. CIT(A) AS WELL AS BEFORE US. WE ARE OF THE CONSIDERED VIEW THAT THE DEALING OF THE ASSESSEE IN THE SHARES WAS SOLEL Y AND EXCLUSIVELY WITH THE INTENTION TO EARN PROFIT AND THE ASSESSEE HAD NO IN TENTION OF HOLDING THE SHARES AS AN INVESTMENT. ACCORDINGLY, WE HOLD THAT THE AO WAS JUSTIFIED TO TREAT THE PROFIT OF RS.1,62,05,046/- IN RESPECT OF THE SHARES , DETAILS GIVEN IN TABLE 2 OF THE ASSESSMENT ORDER, IS THE PROFIT OF THE ASSESSEE FRO M ADVENTURE IN THE NATURE OF TRADE AND IS THE NORMAL BUSINESS PROFIT AND NOT THE SHORT-TERM CAPITAL GAIN AS CLAIMED BY THE ASSESSEE. HENCE, WE CONFIRM THE FIND ING OF THE AO BY REVERSING THE ORDER OF THE LD. CIT(A). ACCORDINGLY, THE GROUN D NO.4 OF THE APPEAL TAKEN BY THE DEPARTMENT IS ALLOWED. 5. AT THE TIME OF HEARING THE LD. DR APPEARI NG ON BEHALF OF THE REVENUE HAS SUPPORTED THE ORDER OF THIS TRIBUNAL AND FURTHER RE ITERATED THE OBSERVATIONS MADE BY THE AO WHICH WAS ALSO INCORPORATED IN THE TRIBUNAL ORDER AND ASSAILED THAT THE LD. CIT(A) SIMPLY BASED ON THE JUDICIAL RATIOS LAID DOW N BY DIFFERENT FORUMS HAS GIVEN RELIEF TO THE ASSESSEE IGNORING THE OBSERVATIONS MA DE BY THE AO. THEREFORE HE SUPPORTED THE ORDERS OF THIS TRIBUNAL DATED 30.09.2 008. 6. ON THE OTHER HAND, THE LD. AR APPEARING ON BEHALF OF THE ASSESSEE HAS STRENGTHENED THE ORDERS OF THE LD. CIT(A) BY POINTI NG OUT THE FOLLOWING FACTS : 5 (I) THAT THOUGH THE PERIOD OF HOLDING IS LESS IN SOME C ASES OF TRANSACTIONS AS SHOWN BY THE ASSESSEE IN THE INVESTMENT ACCOUNT AND THEY ARE ALL ROUTED THROUGH DEMAT ACCOUNT AND THE REVENUE HAS NOT DISPU TED THESE FACTS. (II) THE AO HIMSELF HAS ACCEPTED THAT THE ASSESSEE IS HO LDING SHARES OF JUBILANT ORGANOSIS LTD. WHICH WERE APPEARING IN THE FINAL AC COUNTS AS ON 31.3.2004 AS SHORT TERM CAPITAL GAINS HOWEVER HE DISPUTED THE PURCHASE AND SALE OF THE SAID SHARES DURING THE PREVIOUS YEAR RELEVANT TO TH E ASSESSMENT YEAR WITHOUT ASSIGNING ANY REASONS. (III) HE FURTHER POINTED THAT THE ASSESSEE HAS RECEIVED B ONUS SHARES ON ACCOUNT OF THE EXISTING SHARES UPTO THE SHARES ACQUIRED BY THE ASSESSEE UPTO THE SHARES ACQUIRED BY THE ASSESSEE UPTO 5.4.2004 TO THE EXTEN T OF 9103 AND DISPOSED OF THESE SHARES ALSO DURING THE PREVIOUS YEAR AND T HE AO WITHOUT ASSIGNING ANY REASONS HAS STATED THE SAME AS BUSINESS INCOME. (IV) ALL THESE SHARES HAVE BEEN DECLARED BY THE ASSESSEE IN THE INVESTMENT PORTFOLIO AND THE REVENUE HAS NOT DISPUTED THE SAME . (V) THE HONBLE HIGH COURT BASED ON THE ABOVE FACTS HAS RESTORED THE MATTER TO THE TRIBUNAL FOR RE-CONSIDERATION. THEREFORE HE REQUESTED TO UPHELD THE ORDERS OF THE LD. CIT(A). 7. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD, IT IS OBSERVED THAT OUT OF THE TOTAL 162 LAKHS OF SHORT TERM CAPITAL GAINS AN AMOUNT OF 159 LAKHS ARE RELATING TO JUBILA NT ORGANOSIS LTD. IN THIS CASE THE ASSESEE IS ALREADY HAVING SHARES OF 2045 AS ON 31.3 .2004 IN THE INVESTMENT PORTFOLIO AND THE AO HAS ACCEPTED THE SALE OF THE SAID SHARES AS SHORT TERM CAPITAL GAINS IN THE ASSESSMENT ORDER WHEREAS THE SUBSEQUENT SHARES PURC HASED BY THE ASSESSEE OBTAINED AS BONUS SHARES HAS BEEN TREATED BY THE AO AS BUSINESS INCOME WITHOUT ASSIGNING THE REASONS. THEREFORE, IN OUR CONSIDERED OPINION THE A O IS NOT JUSTIFIED TO TREAT PART OF THE TRANSACTIONS IN RESPECT OF SOME OF THE SHARES O F THE SAME COMPANY AS SHORT TERM CAPITAL GAIN AND THE BALANCE AS BUSINESS INCOME WI THOUT BRINGING ANY MATERIAL TO THIS EFFECT. 6 7.1. IT IS FURTHER OBSERVED THAT IN THE CASE OF N TPC AND WESTERN INDIA LIMITED WHERE THE ASSESSEE IS HAVING A CLOSING BALANCE THE SAME HAS BEEN VALUED BY THE ASSESSEE AT COST OF SHOWING THE SAME UNDER INVESTME NT PORTFOLIO. THEREFORE AO IS NOT JUSTIFIED TO TREAT THE SALE/PURCHASE OF THE SAID SH ARES AS BUSINESS INCOME OF THE ASSESSEE THOUGH THERE IS NO DISPUTE THAT THE ASSESSEE HAS SH OWN THE SAME UNDER INVESTMENT PORTFOLIO. SIMILARLY IN RESPECT OTHER SHARES ALSO S INCE THE ASSESSEE HAS CONSISTENTLY SHOWN THE SAME IN THE INVESTMENT PORTFOLIO AO IS NO T JUSTIFIED TO TREAT LONG TERM CAPITAL GAIN DERIVED IN THE SALE AND SUCH SHARES AS BUSINESS INCOME OF THE ASSESSEE WITHOUT BRINGING ANY MATERIAL EXCEPT BY STATING THA T THE SCALE OF ACTIVITY WAS FREQUENT AND HUGE AND THE QUANTITY PURCHASE AND SALE ARE LOO SE. IN ADDITION TO THE ABOVE WE CONSIDER IT VITAL TO MENTION THE OBSERVATIONS MADE BY THE HONBLE JURISDICTIONAL HIGH COURT WHICH IS AS UNDER :- WE HAVE GONE THROUGH THE ENTIRE RECORDS AND ALSO T HE MATERIALS. WE ARE OF THE VIEW THAT THERE ARE MATERIALS AND IF CON SIDERED IN A PROPER MANNER THEN TWO POSSIBLE VIEWS AS REGARDS CLASSIFICATION O F INCOME ARE POSSIBLE. THE LEARNED TRIBUNAL HAS NOT CONSIDERED THE NATURE OF T HE TRANSACTIONS ACTUALLY, WHICH WAS BROUGHT ON RECORD. UNDER SUCH CIRCUMSTANC ES, WE THINK THAT THIS PORTION OF THE INCOME OF RS.1,62,05,046/- NEEDS REC ONSIDERATION FOR CLASSIFICATION OF THE PROPER HEAD FOR COMPUTATION. 7.2. IN VIEW OF THE ABOVE WE ARE OF THE VIEW THAT L D. CIT(A) HAS RIGHTLY CONCLUDED THAT THE ASSESSEES INCOME IS TO BE TREATED AS SHOR T TERM CAPITAL GAIN AND NOT AS BUSINESS INCOME AS HELD BY THE AO. THEREFORE, WE CO NFIRM THE ACTION OF LD. CIT(A) IN RESPECT OF GROUND NO.3. 7.3. THIS ORDER IS TO BE READ WITH THE EARLIER OR DER OF THIS TRIBUNAL DATED 30.09.2008 IN RESPECT OF GROUND NO.1 AND 3 ARE CONCERNED. 8. IN THE RESULT THE APPEAL OF THE REVEN UE IS ALLOWED IN PART. ITA NO.1632/KOL/2010 9. IN THIS APPEAL OF THE REVENUE THE GROUN D IS RELATING TO DELETION OF PENALTY LEVIED BY AO U/S 271(1)(C) OF THE ACT ON THE ISSUE DECIDED BY US IN ITA NO.1005/KOL/2008. THE LD. AO LEVIED PENALTY BASED O N THE ORDERS OF THIS TRIBUNAL WHEREIN THE TRIBUNAL HAS REVERSED THE ORDERS OF THE LD. CIT(A) AND RESTORED THAT OF THE AO. HOWEVER ON THE RESTORATION OF THIS ISSUE BY THE JURISDICTIONAL HIGH COURT NOW THIS 7 TRIBUNAL HAS CONCURRED THE VIEW OF THE LD. CIT(A). SINCE THE PENALTY LEVIED IS INCONSEQUENTIAL TO THE EARLIER ORDERS OF THIS TRIB UNAL WHICH IS NO MORE IN EXISTENCE WILL NOT SURVIVE. EVEN OTHERWISE ALSO WE FIND NO IN FIRMITY IN THE ORDERS OF THE LD. CIT(A) WHILE DELETING THE PENALTY U/S 271(1)(C) OF THE ACT. THE RELEVANT OBSERVATIONS OF THE LD. CIT(A) ARE AS UNDER :- IN THE CASE OF THE APPELLANT THE FACTS ARE SIMILAR . THE BONA FIDES OF THE APPELLANTS EXPLANATION OF THE FACTS ARE CLEARLY PRO VED FROM THE FACT THAT THE HONBLE CALCUTTA HIGH COURT ADMITTED THE APPEAL AND RESTORED THE MATTER TO HONBE ITAT FOR RECONSIDERATION OF FACTS. IF THERE CAN BE TWO OPINIONS ABOUT THE CLAIM OF THE ASSESSEE, THE EXPLANATION OFFERED BY THE ASSESSEE CANNOT BE REGARDED AS FALSE. IN MY OPINION, THE APPELLANT HAS FURNISHED ALL DETAILS OF TRANSACTIONS IN SHARES. THE AO HAS NOT FOUND ANY CO NCEALMENT OF INCOME OR INACCURACY IN FACTS FILED. IN MY OPINION, THIS IS O NLY DIFFERENCE OF OPINION AND NOTHING TO DO WITH FURNISHING OF INACCURATE PARTICU LARS OF SUCH INCOME. THE WORD PARTICULARS USED IN THE SECTION 271(1)(C) WO ULD EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MADE. IT IS CLEAR IN THE P RESENT CASE THAT NO INFORMATION GIVEN INT EH RETURN WAS FOUND TO BE INCORRECT OR IN ACCURATE. IN VIEW OF THE ABOVE DISCUSSION AND RELYING ON THE JUDGEMENT OF THE HON BLE APEX COURT, IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RELIANCE PETRO PR ODUCTS PVT. LTD. (2010) 322 ITR 158 (SC) I DIRECT THE AO TO DELETE THE PENA LTY. THE GROUNDS OF APPEAL ARE ALLOWED. 9.1. KEEPING IN VIEW OF THE FACT WE FIND NO INFIRM ITY IN THE ORDERS OF LD. CIT(A) AND UPHOLD THE SAME. 10. IN THE RESULT ITA NO.1005/KOL/2008 IS ALLOWED IN PART AND ITA NO.1632/KOL/2010 IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 19.08.2011. SD/- SD/- [ , ] [ . !., '# ] [ MAHAVIR SINGH ] [ C. D. RAO ] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (!# !# !# !#) )) ) DATE: 19.08.2011. R.G.(.P.S.) 8 '2 0 .3 4'3(5- COPY OF THE ORDER FORWARDED TO: 1. M/S.LILY EXPORTERS PVT. LTD., 7 LYONS RANGE, 3 RD FLOOR, KOLKATA-1. 2 THE ITO, WARD-6(2), KOLKATA. 3. THE CIT, 4. THE CIT(A)-VI, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA /3 ./ TRUE COPY, '2&:/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES