ITO 4(2)(2), MUMBAI V. SATCO SECURITIES & FIANANCIAL SERVICES P. LTD, MUMBAI

ITA 213/MUM/2010

• Counselvise Citation: 21319914 RSA 2010
• Duration Of Justice: 1 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 26-12-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 08-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V V SHASTRI
• Keywords: Speculation loss
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI B.R. MITTAL (JUDICIAL MEMBER) AND SHRI J. SUDHAKAR REDDY (ACCOUNTANT MEMBER) ITA NO. 213/MUM/2010 ASSESSMENT YEAR-2001-02 THE ITO 4(2)(2), AAYAKAR BHAVAN, MUMBAI-400 020 VS. M/S. SATCO SECURITIES & FINANCIAL SERVICES PVT. LTD., 196, MAKHIJA CHAMBERS, TURNER ROAD,BANDRA (W), MUMBAI-400 023 PAN-AAACS 3813N (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI V.V. SHASTRI RESPONDENT BY: SHRI HARIDAS BHAT DATE OF HEARING :26.12.2011 DATE OF PRONOUNCEMENT: 29.12.2011 O R D E R PER B.R. MITTAL, JM : THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2001-02 AGAINST ORDER OF LD. CIT(A) DT.14.10.2009 ON FOLLOW ING GROUND: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CANCELING THE PENALTY OF RS. 12,54, 890/- LEVIED U/S. 271(1)(C) OF THE ACT HOLDING THAT FURNISHING ITS RE TURN OF INCOME THE ASSESSEE HAS NEITHER CONCEALED ITS INCOME NOR FURNI SHED INAPPROPRIATE PARTICULARS OF INCOME AND MERE TREATMENT OF BUSINES S LOSS AS SPECULATION LOSS BY AO DO NOT AUTOMATICALLY WARRANT THE INFERENCE OF CONCEALMENT OF INCOME WITHOUT APPRECIATING THE DECI SION OF THE HONBLE SUPREME COURT IN THE CASE OF DHARMENDRA TEX TILE PROCESSORS REPORTED IN 306 ITR 277 WHEREIN IT IS HELD THAT THE ELEMENT OF MENSREA IS NOT ESSENTIAL FOR LEVY OF PENALTY. 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF PARTIES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. 3. DURING THE COURSE OF HEARING, LD. DEPARTMENTAL R EPRESENTATIVE RELIED ON THE ORDER OF AO AND WHEREAS LD. AR SUPPORTED THE ORDER OF LD. CIT(A) ITA NO. 213/M/10 2 AND SUBMITTED THAT LD. CIT(A) HAS DELETED THE PENAL TY BY CONSIDERING DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS AURIC INVESTMENT & SECURITIES LTD. 310 ITR 121 (DEL). 4. WE AGREE WITH LD. AR THAT ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED BY DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS AURIC INVESTMENT & SECURITIES LTD. (SUPRA) WHICH HAS BEEN RELIED ON BY LD. CIT(A). IN THE ABOVE CASE, HONBLE DELHI HIGH COURT HAS HELD THAT IF LOSS IS DISALLOWED ON THE GROUND THAT IT WAS SPECULATIVE IN NATURE AND THE SAME COULD NOT BE ADJUSTED AGAINST NORMAL INCOME OF ASSESSEE, IT DOES NOT AMOUNT TO FURNISHING OF ANY INACCURATE PARTICULARS OF INCOME AND/OR CONCEALMENT OF INCOME BY ASSESSEE. THEREFORE, NO PENALTY IS LIABL E TO BE IMPOSED U/S. 271(1)(C) OF THE ACT. 5. THE ISSUE INVOLVED IN THIS APPEAL IS DIRECTED CO VERED BY THE ABOVE DECISION OF HONBLE DELHI HIGH COURT. HENCE THERE IS NO INFIRMITY IN THE ORDER OF LD. CIT(A) AND THE CASE CITED BY DEPARTMENT IN T HE GROUND OF APPEAL VIZ., UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS 306 ITR 277 DOES NOT APPLY TO THE FACTS OF THE CASE AS IN THAT CASE IT W AS HELD THAT PENALTY U/S. 271(1)(C) IS A CIVIL LIABILITY AND WILLFUL CONCEALM ENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS IS THE CASE IN THE MATTER OF PROSECUTION UNDER SECTION 276C OF THE ACT. THEREFOR E, WE UPHOLD THE ORDER OF LD. CIT(A) AND REJECT GROUND OF APPEAL TAKEN BY DEP ARTMENT. 6. IN THE RESULT, APPEAL FILED BY DEPARTMENT IS DISM ISSED. ORDER PRONOUNCED ON THIS 29 TH DAY OF DECEMBER, 2011 SD/- SD/- ( J. SUDHAKAR REDDY) (B.R. MITTAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 29 TH DECEMBER,2011 RJ ITA NO. 213/M/10 3 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR E BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI ITA NO. 213/M/10 4 DATE INITIALS 1. DRAFT DICTATED ON: 27.12.2011 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 27.12.2011 SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: SR. PS/PS 6. ORDER PRONOUNCED ON: SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: SR. PS/PS 9. DATE ON WHICH FILE GOES TO AR 10. DATE OF DISPATCH OF ORDER: