Shri Jyotish Bhogilal Shah, Ahmedabad V. The ACIT, Circle-3, Ahmedabad

ITA 2401/AHD/2005

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9162 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 09-06-2009
• Assessment Year: 1992-1993
• Appeal Filed On: 16-11-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR JAYANT JHAVERI
• Keywords: Initiation of penalty proceedings; Speculation loss; Set aside
• Section: 271(1)(c); 143(3); 43(5); 251; 132

Judgement Text

ITA NO.2401/AHD/2005 1 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' (BEFORE S/SHRI MAHAVIR SINGH,JM AND A N PAHUJA,AM) ITA NO.2401/AHD/2005 (ASSESSMENT YEAR: 1992-93) JYOTISH BHOGILAL SHAH, 707, 7 TH FLOOR, SAKAR-I, NEAR GANDHIGRAM RAILWAY STATION, ASHRAM ROAD, AHMEDABAD V/S ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-3, AHMEDABAD (APPELLANT) (RESPONDENT) ASSESSEE BY :- WRITTEN SUBMISSIONS REVENUE BY:- DR. JAYANT JHAVERI, . DR O R D E R A N PAHUJA: THIS IS AN APPEAL BY THE ASSESSEE AGAINST AN ORDER DATED 09-09-2005 OF THE LD. CIT(A)-VII, AHMEDABAD, UPHOLDING THE PENALTY OF RS. 87,187/-LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE THE ACT ] 2. FACTS, IN BRIEF, AS PER RELEVANT ORDERS AR E THAT IN THIS CASE A SEARCH U/S 132 OF THE ACT WAS CONDUCTED IN THE BUSI NESS AND RESIDENTIAL PREMISES OF THE ASSESSEE, A SHARE BROKE R ON 15/16.10.1993,WHEN A NUMBER OF BOOKS AND OTHER DOCU MENTS WERE SEIZED. THE ASSESSMENT FOR THE YEAR UNDER CONSIDER ATION WAS INITIALLY COMPLETED VIDE ORDER DATED 24.3.1995 U/S 143(3) OF THE ACT ON AN INCOME OF RS.27,87,948/- IN PURSUANCE TO A RE TURN DECLARING INCOME OF RS.21,75,833/- FILED ON 24.3.1993 BY THE ASSESSEE. INTER ALIA, AN AMOUNT OF RS.38,844/-DEBITED UNDER THE HEA D SAUDA SARBHAR IN THE P&L ACCOUNT OF ITS AHMEDABAD DIVISI ON AND RS.1,13,342/- IN THE MUMBAI DIVISION, WERE DISALLOW ED ON THE GROUND THAT THESE LOSSES WERE NOT INCURRED DURING T HE NORMAL COURSE OF BUSINESS BUT WERE ASSESSEES OWN SPECULATION LOSS . INITIALLY THE ASSESSEE EXPLAINED BEFORE THE AO THAT THIS ACCOUNT WAS SAUD A MISTAKE ACCOUNT WHEREIN IF THERE IS MISTAKE IN WRITING THE SAUDA OF THE CLIENT S, THE RELEVANT TRANSACTIONS WERE ITA NO.2401/AHD/2005 2 ENTERED AND LATER ON REVERSED. HOWEVER, THE AO FOUN D THAT IN THE AY 1990-91 ALSO THE ASSESSEE INCURRED SPECULATION LOSS AS EVID ENCED BY THE SAUDA BOOKS. LATER, THE NAME OF THE ASSESSEE IN THE SAUDA BOOK W AS STRUCK OFF AND INSTEAD SAUDA SARBHAR ACCOUNT WAS WRITTEN. ACCORDINGLY, T HE SAID LOSS WAS DISALLOWED, THE TRANSACTIONS HAVING BEEN DONE BY TH E ASSESSEE FOR HIMSELF WHILE POSTING WAS DONE IN SAUDA SARBHAR A CCOUNT IN ORDER TO SUPPRESS PROFITS. IN THE AY 1991-92 ALSO THE ASS ESSEE IS STATED TO HAVE PURCHASED 5500 SHARES OF TISCO IN THEIR BOMBA Y DIVISION. OUT OF THESE, 1000 SHARES WERE PURCHASED FOR A CLIE NT AND THE REMAINING FOR HIS OWN TRADING. ACCORDING TO THE AO, THIS TRANSACTION WAS NOT ENTERED BY THE ASSESSEE TO REVERSE ANY MIST AKE. THE ASSESSEE SOLD 2100 SHARES OF TISCO AFTER ONE AND A HALF MONTH OF THE PURCHASE AND REMAINING DURING THE YEAR UNDER CO NSIDERATION. THESE TRANSACTIONS WERE NOT REFLECTED BY THE ASSES SEE IN HIS TRADING ACCOUNT, BUT WERE SHOWN IN SAUDA SARBHAR AC COUNT. THE AO ALSO NOTICED A NUMBER OF TRANSACTIONS IN THE SHARES OF APPOLO TYRE, TATA IRON & STEEL, MARDIA CHEMICALS, ORKAY SILKS. E VEN THOUGH DELIVERY OF SHARES OF THE COMPANIES LIKE AURANGABA D PAPER & GUJRAT APAR WAS TAKEN, THESE WERE NOT REFLECTED IN THE TRA DING ACCOUNT OR BALANCESHEET OF THE ASSESSEE. IN THESE CIRCUMSTANCE S, THE AO DISALLOWED THE CLAIM OF LOSS OF RS. 1,52,186/-, HOL DING THE SAME TO BE SPECULATION LOSS. ON APPEAL, THE LD. CIT(A) CONC LUDED THAT THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES BEING W ITHIN ONE SETTLEMENT, CONSTITUTED JOBBING AND THEREFORE, LOSS ON SUCH TRANSACTIONS TO THE EXTENT OF RS.1,47,960/- INSTEAD OF RS. 1,52,186/- CLAIMED BY THE ASSESSEE, BEING COVERED BY THE PROVI SO (C) TO SEC. 43(5) OF THE ACT HAS TO BE SET OFF AGAINST THE BUS INESS INCOME. ON FURTHER APPEAL, THE ITAT VIDE THEIR ORDER DATED 25. 6.2002 IN ITA NO.2770/AHD./1996 SET ASIDE THE ISSUE TO THE FILE O F THE AO SINCE THE ASSESSEE FURNISHED BEFORE THE LD. CIT(A) A FRES H EXPLANATION IN SUPPORT OF THEIR CLAIM ALONG WITH CLARIFICATIONS OF THE EXECUTIVE DIRECTOR OF AHMEDABAD STOCK EXCHANGE IN HIS LETTER DATED 2.5.1996.IN PURSUANCE TO THE DIRECTIONS OF THE ITA T, THE AO ALLOWED AN OPPORTUNITY TO THE ASSESSEE. IN RESPONSE, THE AS SESSEE WHILE RELYING UPON THE DECISION DATED 22.5.996 OF THE LD. CIT(A) STATED ITA NO.2401/AHD/2005 3 THAT ALL THE RELEVANT DETAILS HAD ALREADY BEEN SUBM ITTED. ACCORDINGLY, THE AO ADDED AN AMOUNT OF RS.1,47,960/ - ON THE GROUND THAT THE ASSESSEE DID NOT SUBMIT ANY FRESH E VIDENCE. BESIDES, THE AO ADDED AN AMOUNT OF RS.41,005/- ON ACCOUNT OF LTC NOT CLAIMED IN THE RETURN AND ACCORDINGLY, COMPLETE D THE ASSESSMENT VIDE ORDER DATED 28.3.2004. INTER ALIA, THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. AS ME NTIONED IN THE PENALTY ORDER DATED 22.9.2004, NO APPEAL SEEMS TO H AVE BEEN FILED AGAINST THE AFORESAID ASSESSMENT ORDER DATED 28.3.2 004 2.1 IN RESPONSE TO A SHOWCAUSE NOTICE BEFORE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT, THE ASSESSEE SUBMITTED VIDE L ETTER DATED 18.8.2004 THAT THE AO VIDE HIS ORDER DATED 24.3.19 93 CONCLUDED THAT LOSSES WERE NOT INCURRED DURING THE NORMAL COU RSE OF BUSINESS AND INSTEAD TREATED THE LOSS AS SPECULATION LOSS. THIS BEING A DEBATABLE ISSUE AND THE AO HAVING NOT ACCEPTED ASSE SSEES CLAIM, NO PENALTY IS LEVIABLE. MOREOVER, THE LTC GAIN HAD ARISEN FROM THE WORKING OF SAUDA SARBHAR ACCOUNT AND WAS NOT AN IND EPENDENT ISSUE. SINCE ALL THE FACTS WERE AVAILABLE ON RECORD AND THE AO HAS NOT DISCOVERED ANY NEW FACTS, THEREFORE, NO PENALTY IS LEVIABLE, THE ASSESSEE SUBMITTED. HOWEVER, THE AO DID NOT ACCEPT THESE SUBMISSIONS OF THE ASSESSEE AND RELYING UPON A DECI SION OF IN THE CAE OF CI VS. RAI TRADING CO.,217 ITR 308(RAJ) ,CIT VS. GURBACHANLAL,250 ITR 157(DEL.), CIT VS. SREENIVASA PAI,242 ITR 29(KER) ,CIT VS. KISHOREKUMAR SHAMJI,244 ITR 702(KE R)CIT VS. K.P.MADHUSUDANAN, 251 ITR 99(SC),CIT VS. SOHAN SING H,254 ITR 170(DEL.),AM SHAH & CO. VS. CIT,108 TAXMAN 137(GUJ) AND BA BALASUBRAMANYAM & BROS.CO. VS. CIT,236 ITR 977(SC) LEVIED A PENALTY OF RS. 87,187 U/S 271(1)(C) OF THE ACT 3. ON APPEAL, THE LD. CIT(A) UPHELD THE ORDER OF THE AO, OBSERVING AS UNDER:- 7 I HAVE CONSIDERED THE FACTS OF THE CASE CAREFULL Y. THE APPELLANT HAS NOT SUBMITTED ANYTHING NEW BEFORE ME THAT HAS NOT A LREADY BEEN SAID BEFORE THE AO DURING PENALTY PROCEEDINGS. THE ACTIO N OF THE AO IS JUSTIFIED ITA NO.2401/AHD/2005 4 IN VIEW OF THE AFOREMENTIONED CBDT CIRCULAR AND VAR IOUS JUDICIAL DECISIONS OF HIGHER AUTHORITIES. THE APPELLANT DID NOT AVAIL OF THE OPPORTUNITY TO PRESENT HIS CASE BEFORE THE AO, AS D IRECTED BY THE HONBLE ITAT. THE ONUS OF PROVING THAT EVIDENCE AND MATERIA L PROVIDED BY HIM IN SUPPORT OF HIS CONTENTIONS IS ON THE APPELLANT. THE SAID EVIDENCE SHOULD ALSO BE COGENT AND CREDIBLE. THE APPELLANTS CONTEN TION THAT ALL RELEVANT PARTICULARS WERE ON RECORD IS ALSO NOT CORRECT, IN VIEW OF THE FACT THAT THE APPELLANT HAD EARLIER TRIED TO PASS OF THE SAUDA SA RBHAR ACCOUNT AS A SAUDA MISTAKE ACCOUNT, WHEREIN MISTAKES MADE IN CLI ENTS ACCOUNTS ARE ENTERED AND LATER CORRECTED. IT WAS THE AO WHO ESTA BLISHED THAT THE ENTRIES REPRESENTED THE APPELLANTS OWN TRANSACTIONS. FURTH ER, I AGREE WITH THE AOS CONTENTION THAT THE APPELLANT HAS WRONGLY CLAI MED A SPECULATION LOSS AS BUSINESS LOSS, THUS DELIBERATELY REDUCING HIS TA X BURDEN, DESPITE THE SAME SITUATION OBTAINING IN AY 91-92. THERE HAS BEE N A DELIBERATE ATTEMPT ON THE APPELLANTS PART TO OBFUSCATE FACTS AND NOT FULLY DISCLOSE THE TRUE NATURE OF INCOME EARNED BY HIM. THE ACTION OF THE A O IN LEVYING PENALTY U/S 271(1)(C) IS UPHELD. 4 NONE APPEARED ON BEHALF OF THE ASSESSEE BEFORE U S. HOWEVER, IN HIS WRITTEN SUBMISSIONS, THE ASSESSEE SUBMITTED THAT THE ISSUE AS TO WHETHER OR NOT PROVISIONS OF SEC. 4 3(5) AND 73 WERE APPLICABLE, BEING HIGHLY DEBATABLE, NO PENALTY COUL D BE LEVIED.THE LD. CIT(A) HAS NOT APPRECIATED THE FACTS ON RECORD THAT THE BOOKS OF ACCOUNTS WERE SEIZED DURING THE COURSE OF SEARCH. R ELYING UPON THE DECISIONS IN THE CASE OF ZINGA CHEMICALS PVT. LTD., 172 TAXMAN 176(DELHI),CIT VS. PREETI AGGARWALA, 171 TAXMAN 380 (DELHI),CIT VS. BA GLOBAL (I) PVT. LTD.,171 TAXMAN 262(DELHI),C IT VS. GKN DRIVELINE INDIA LTD., 171 TAXMAN 366(DELHI), IT WAS CONTENDED THAT NO SATISFACTION HAS BEEN RECORDED BY THE AO BEFORE INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR FU RNISHING INACCURATE PARTICULARS OF INCOME. SINCE THE ASSESSE E HAD FURNISHED THE EXPLANATION BEFORE THE AO, NO PENALTY COULD BE LEVIED, THE ASSESSEE ADDED..THE LEARNED DR, ON THE OTHER HAND, RELIED ON THE ORDER OF THE CIT(A). 5 WE HAVE HEARD THE LD. DR AND GONE THROUGH THE WR ITTEN SUBMISSIONS AS ALSO THE FACTS OF THE CASE. WE FIND THAT THE AO IMP OSED PENALTY U/S 271(1)(C) OF THE ACT ON THE GROUND THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF AN AMOUNT OF RS.38,844/-DEBITED UNDER THE HEAD SAUDA SARBHAR IN THE P&L ACCOUNT OF ITS AHMEDABAD DIVISION AND RS.1,13,342/- IN THE MUMBAI DIVISION, ITA NO.2401/AHD/2005 5 HOLDING THESE TO BE SPECULATION LOSS. THE LD. CIT (A) UPHELD THE LEVY OF PENALTY ON THE GROUND THAT THE ASSESSEE WRONGLY CLAIMED SPECULATION LOSS AS BUSINESS LOSS, THEREBY DELIBERATELY REDUCING HIS TAX BURDEN. NEITHER THE AO NOR THE LD. CIT(A) IN THE IMPUGNED ORDER HAVE BROUGHT OUT AS T O WHICH PARTICULARS OF INCOME HAVE BEEN CONCEALED NOR AS TO HOW THE ASSESSEE FUR NISHED INACCOURATE PARTICULARS OF INCOME. THE LD. CIT(A) IN THE IMPUGN ED ORDER CONCLUDED THAT THE ASSESSEE HAS TRIED TO PASS OFF THE SAUDA SARBHAR AC COUNT AS SAUDA MISTAKE ACCOUNT WHILE THE LD. CIT(A) IN THE APPEAL AGAINST QUANTUM ADDITION VIDE HIS ORDER DATED 22.5.1996 ALLOWED THE BENEFIT OF PROVI SO (C) TO THE SEC. 43(5) OF THE ACT. THE EXPRESSION 'HAS CONCEALED THE PARTICULARS OF INCOME' AND 'HAS FURNISHED INACCURATE PARTICULARS OF INCOME' HAVE NOT BEEN DEF INED EITHER IN SECTION 271 OR ELSEWHERE IN THE ACT. HOWEVER, NOTWITHSTANDING THE DIFFERENCE IN THE TWO CIRCUMSTANCES, IT IS NOW WELL ESTABLISHED THAT THEY LEAD TO THE SAME EFFECT NAMELY, KEEPING OFF A CERTAIN PORTION OF THE INCOME FROM THE RETURN. ACCORDING TO LAW LEXICON, THE WORD 'CONCEAL' MEANS: 'TO HIDE OR KEEP SECRET. THE WORD 'CONCEAL' IS C ON+CELARE WHICH IMPLIES TO HIDE. IT MEANS TO HIDE OR WITHDRAW FROM OBSERVATION; TO C OVER OR KEEP FROM SIGHT; TO PREVENT THE DISCOVERY OF ; TO WITHHOLD KNOWLEDGE OF . THE OFFENCE OF CONCEALMENT IS, THUS, A DIRECT ATTEMPT TO HIDE AN ITEM OF INCOM E OR A PORTION THEREOF FROM THE KNOWLEDGE OF THE INCOME-TAX AUTHORITIES.' IN WEBSTER'S DICTIONARY, 'INACCURATE' HAS BEEN DEFI NED AS : 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS ; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT.' 5.1 IF THE DISCLOSURE OF FACTS IS INCORRECT OR FAL SE TO THE KNOWLEDGE OF THE ASSESSEE AND IT IS ESTABLISHED, THEN SUCH DISCLOSUR E CANNOT TAKE IT OUT FROM THE PURVIEW OF THE ACT OF CONCEALMENT OF PARTICULARS FO R THE PURPOSE OF LEVY OF PENALTY. THE PENALTY U/S 271(1)(C) OF THE ACT IS LEVIABLE IF THE AO IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS UNDER TH IS ACT THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. HERE WE MAY POINT OUT THAT THE DECISIONS RELIED UPON BY THE ASSESSEE ON THE IS SUE OF RECORDING OF SATISFACTION BY THE AO BEFORE INITIATING PENALTY PROCEEDINGS U/S ITA NO.2401/AHD/2005 6 271(1)(C) OF THE ACT ARE NO LONGER RELEVANT IN VIEW OF SUB-SECTION 1B INSERTED IN SECTION 271 OF THE ACT BY FINANCE ACT, 2008. THE SAID PROVISION PURPORTS TO CREATE A FICTION BY WHICH SATISFACTION OF THE AO IS DEEMED TO HAVE BEEN RECORDED IN CASES WHERE AN ADDITION OR DISALLO WANCE IS MADE BY THE ASSESSING OFFICER AND A DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS IS ISSUED. THE SAID PROVISION IS MADE EFFECTIVE RETROSPECTIVEL Y WITH EFFECT FROM 1ST APRIL, 1989. THE ASSESSEE HAS NOT EXPLAINED AS TO HOW THE AFORESAID DECISIONS RELIED UPON BY HIM WERE RELEVANT IN VIEW OF THE SAID PROVI SIONS OF SEC. 271(1B) OF THE ACT. 5.2 IT IS WELL SETTLED THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE AND DISTINCT AND AS HELD BY HON'BLE SUPREM E COURT IN THE CASE OF ANANTHRAMAN VEERASINGHAIAH & CO. VS. CIT - 123 ITR 457; THE FINDING IN THE ASSESSMENT PROCEEDINGS CANNOT BE REGARDED AS CONCLU SIVE FOR THE PURPOSES OF THE PENALTY PROCEEDINGS. IT IS, THEREFORE, NECESSAR Y TO REAPPRECIATE AND RECONSIDER THE MATTER SO AS TO FIND OUT AS TO WHETH ER THE ADDITION MADE IN THE QUANTUM PROCEEDINGS ACTUALLY REPRESENTS THE CONCEAL MENT ON THE PART OF THE ASSESSEE AS ENVISAGED IN SEC. 271(1 )(C) OF THE ACT AND WHETHER IT IS A FIT CASE TO IMPOSE THE PENALTY BY INVOKING THE SAID PROVISIONS. EXPLANATION 1 TO SECTION 271(1)(C) IN RESPECT OF ANY FACT RELATING TO THE CO MPUTATION OF TOTAL INCOME STATES THAT THE AMOUNT ADDED OR DISALLOWED I N COMPUTING THE TOTAL INCOME OF AN ASSESSEE SHALL BE DEEMED TO BE T HE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. T HIS DEEMING PROVISION FOR CONCEALMENT IS NOT ABSOLUTE ONE. THE PRESUMPTION UNDER THE EXPLANATION 1 IS REBUTTABLE AND NOT CONC LUSIVE. THE ASSESSEE CAN SUBMIT THE EXPLANATION AS THE ONUS SHI FTS ON TO THE ASSESSEE TO PROVE THAT HE HAS NOT CONCEALED THE PAR TICULARS OF THE INCOME. THE ASSESSEE IN THIS CASE HAS DULY SUBMITT ED THE RELEVANT EXPLANATION. NO COGENT MATERIAL OR EVIDENCE WAS BRO UGHT TO OUR NOTICE, WHICH MAY PROVE THAT THE REVENUE HAS DETECT ED THE CONCEALMENT OR THE EXPLANATION SUBMITTED BY THE ASS ESSEE WAS FALSE ONE. IN THE CASE UNDER CONSIDERATION, WE FIND THA T ALL THE RELEVANT FACTS HAVE BEEN DISCLOSED BY THE ASSESSEE. THE ISSUE AS TO WHE THER OR NOT THE ASSESSEE IS ENTITLED TO BENEFIT OF CLAUSE (C) OF SEC. 43(5) OF THE ACT IS HIGHLY DEBATEABLE. THE LD. CIT(A) VIDE HIS ORDER DATED 22.5.1996 ALLOWED THE BENEFIT OF THE SAID CLAUSE ITA NO.2401/AHD/2005 7 WHILE THE AO IN SET ASIDE PROCEEDINGS CONCLUDED THA T NO FURTHER EVIDENCE HAS BEEN SUBMITTED BY THE ASSESSEE. IT IS WELL SETTLED THAT THE CRITERION AND YARDSTICKS FOR THE PURPOSE OF IMPOSING PENALTY U/S 271(L)(C) A RE DIFFERENT THAN THOSE APPLIED FOR MAKING OR CONFIRMING THE ADDITIONS. WHEN THE AS SESSEE HAS MADE A PARTICULAR CLAIM IN THE RETURN OF INCOME AND HAS ALSO FURNISHE D ALL THE MATERIAL FACTS RELEVANT THERETO, THE DISALLOWANCE OF SUCH CLAIM CANNOT AUTO MATICALLY LEAD TO THE CONCLUSION THAT THERE WAS CONCEALMENT OF PARTICULAR S OF HIS INCOME BY THE ASSESSEE OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. WHAT IS TO BE SEEN IS WHETHER THE SAID CLAIM MADE BY THE ASSESSEE WAS BONA-FIDE AND WHETHER ALL THE MATERIAL FACTS RELEVANT THERETO HAVE BEEN F URNISHED AND ONCE IT IS SO ESTABLISHED, THE ASSESSEE CANNOT BE HELD LIABLE FOR CONCEALMENT PENALTY U/S 271(L)(C) OF THE ACT. SINCE ALL THE MATERIAL FACTS RELEVANT TO THE SAID CLAIM HAD BEEN FURNISHED BY THE ASSESSEE, IN OUR OPINION ,IT IS NOT A FIT CASE TO ATTRACT THE LEVY OF PENALTY U/S 271(L)(C) OF THE ACT. A MERE RE JECTION OF THE CLAIM OF THE ASSESSEE BY RELYING ON DIFFERENT INTERPRETATIONS DO ES NOT AMOUNT TO CONCEALMENT OF THE PARTICULARS OF INCOME OR FURNISHING INACCURA TE PARTICULARS OF INCOME, BY THE ASSESSEE. WHEN TWO VIEWS, ARE POSSIBLE, NO PENALTY CAN BE IMPOSED, IS A PRINCIPLE THAT HAS BEEN ENUNCIATED IN THE DECISIO N IN THE CASE OF CIT V. P.K. NARAYANAN [1999] 238 ITR 905 (KER). HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. AJAIB SINGH & CO. (2001) 170 CT R (P&H) 489 : (2002) 253 ITR 630 (P&H) HAVE OBSERVED THAT MERELY BECAUSE CERTAIN E XPENSES CLAIMED BY THE ASSESSEE ARE DISALLOWED BY AN AUTHORITY, IT CAN NOT MEAN THAT PARTICULARS FURNISHED BY THE ASSESSEE WERE WRONG. IT WAS HELD THAT MERE DISALLOWANCE OF EXPENSES PER SE CANNOT MEAN THAT ASSESSEE HAS FURNISHED INACCURA TE PARTICULARS OF ITS INCOME. IN THE CASE UNDER CONSIDERATION, WE FIND THAT THE ASSESSEE HAD GIVEN ALL THE PARTICULARS OF INCOME AND HAD DISCLOS ED ALL FACTS TO THE AO. IT IS NOT THE CASE OF THE AO OR THE ASSESSEE THAT IN REPLY TO THE QUERY OF THE AO, SOME NEW FACTS WERE DISCOVERED OR THE AO HAD DUG OUT SOM E INFORMATION WHICH WAS NOT FURNISHED BY THE ASSESSEE . IN SUCH CIRCUMSTANCES, HONBLE DELHI HIGH COURT HELD IN THE CASE OF COMMISSIONER OF INCOME-TAX.VS BACARDI MARTINI INDIA LIMITED.,288 ITR 585(DEL) THAT NO PENALTY WAS LEVIA BLE. NO COGENT MATERIAL OR EVIDENCE WAS BROUGHT TO OUR NOTICE WHICH MAY PROVE THAT THE REVENUE DETECTED THE CONCEALMENT OR THE EXPLANATIO N SUBMITTED BY THE ASSESSEE WAS FALSE ONE. IN CIT VS. HARSHVARDH AN CHEMICALS & MINERALS LTD. (259 ITR 212) (RAJ),HONBLE RAJASTHAN HIGH COURT UPHELD THE ITA NO.2401/AHD/2005 8 FINDING OF THE TRIBUNAL THAT WHEN THE ASSESSEE HAS CLAIMED SOME AMOUNT THOUGH THAT IS DEBATABLE, IN SUCH CASES, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED ANY INCOME OR FURNISHED INACCURATE PARTIC ULARS FOR EVASION OF THE TAX. 5.3 IN SOMEWHAT SIMILAR CIRCUMSTANCES, HONBLE DELHI HIGH COURT IN CIT VS. M/S AURIC INVESTMENT & SECURITIES LTD., VIDE THEIR ORDER DATED 13.7.2007 IN ITA NO. 763 OF 2006 CONCLUDED AS UNDER: 14. SO, IT IS CLEAR FROM THE RECORD THAT ALL THE REQUISITE INFORMATION AS REQUIRED BY THE ASSESSING OFFICER, WAS FURNISHED BY THE ASSESSEE. THERE IS NOTHING ON RECORD TO SHOW THAT IN FURNISHING ITS RE TURN OF INCOME, THE ASSESSEE HAS EITHER CONCEALED HIS INCOME OR HAS FURNISHED AN Y INACCURATE PARTICULARS OF INCOME. THE MERE TREATMENT OF THE BUSINESS LOSS AS SPECULATION LOSS BY THE ASSESSING OFFICER DOES NOT AUTOMATICALLY WARRANT IN FERENCE OF CONCEALMENT OF INCOME. THE ASSESSEE DID NOT CONCEAL ANY PARTICULAR S OF INCOME, AS HE FILED FULL DETAILS OF THE SALE OF SHARES. IN ANY CASE, IT CANN OT BE SAID THAT THE ASSESSEE HAS CONCEALED ANY PARTICULARS SO FAR AS ITS COMPUTATION OF INCOME IS CONCERNED AND AS SUCH PROVISIONS OF SECTION 271(1)(C) OF THE ACT ARE NOT ATTRACTED IN THIS CASE AND WE DO NOT FIND ANY INFIRMITY IN THE REASONING GIVEN BY THE TRIBUNAL. 5.4. IN VIEW OF THE FOREGOING AND CONSIDERING TH E ABOVE FACTS AND CIRCUMSTANCES, WE HOLD THAT IN THIS CASE NO PENALTY CAN BE LEVIED. IN OUR OPINION THE ASSESSEE HAD NOT CONCEALED THE PART ICULARS OF INCOME NOR FURNISHED INACCURATE PARTICULARS OF HIS INCOME . THEREFORE, PENALTY LEVIED UNDER SECTION 271 (1)(C) OF THE ACT IS CANCELLED. 6. IN THE RESULT, APPEAL IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 4-09-2009 SD/- SD/- (MAHAVIR SINGH) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 4-09-2009 COPY OF THE ORDER FORWARDED TO : 1. JYOTISH BHOGILAL SHAH, 707, 7 TH FLOOR, SAKAR-I, NR. GANDHIGRAM RAILWAY STATION, ASHRAM ROAD, AHMEDABAD 2. THE ACIT, CIRCLE-3, AHMEDABAD ITA NO.2401/AHD/2005 9 3. THE CIT CONCERNED 4. THE CIT(A)-VII, AHMEDABAD 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY.R/AR, ITAT, AHMEDABAD