SHRI PRAVEEN CHAND NAHAR , CHENNAI V. DCIT, CENTRAL CIRCLE - II(1), CHENNAI

ITA 3225/CHNY/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8200 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 25-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R ANITA
• Keywords: Speculation loss; Revised return
• Section: 271(1)(c)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI , , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA , ACCOUNTAN T MEMBER ./ I . T . A NO. 3225/CHNY/2019 ASSESSMENT YEAR: 20 07 - 2008 SHRI. PRAVEENCHAND NAHAR, NO.18, GENERAL MUTHIAH MUDALI STREET, SOWCARPET, CHENNAI 600 079. [PAN: A FRPP 1236P ] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II ( 1 ) , MAHATMA GANDHI ROAD, NUNGAMBAKKAM, CHENNAI 600 034. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : NONE /RESPONDENT BY : M S . R. ANITA , J CIT / DATE OF HEARING : 27.0 7 .2021 / DATE OF PRONOUNCEMENT : 04. 08. 2021 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 16 , CHENNAI IN I.T.A. NO.118/ CIT(A) - 18/2010 - 11 DATED 24.09.2019 RELE VANT TO THE ASSESSMENT YEAR 2007 2008. I . T . A NO . 3225 /CHNY/201 9 : - 2 - : 2. FACTS ARE IN BRIEF THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 01.11.2007 FOR THE ASSESSMENT YEAR 2007 2008 ADMITTING A TOTAL LOSS OF RS.6,67,880/ - . THE ASSESSING O FFICER HAS COMPLETED THE ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 ON 24.12.2009 DETERMINING THE TOTAL INCOME AT RS.10,79,956/ - . IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE HAS DEBITED AN AMOUNT O F RS.17,47,836/ - IN THE PROFIT & LOSS A CCOUNT (P&L) FOR THE YEAR ENDED 31.03 .2007 AND THIS WAS DISALLOWED, AS A RESULT OF WHICH THE TOTAL INCOME WAS ASSESSED AT RS.10,79,956/ - . SUBSEQUENTLY, THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS U/S. 271( 1)(C) OF THE ACT TO ISSUE NOTICE U/S,.274 OF THE INCOME TAX ACT, 1961. 3. THE ASSESSEE HAD SUBMITTED BEFORE THE ASSESSING OFFICER THAT HE HAS DEBITED THE SPECULATIVE LOSS IN THE PROFIT & LOSS ACCOUNT WAS AN INADVERTENT MISTAKE AND SUBMITTED THAT HE HAD EI THER CONCEALED ANY INCOME NOR FILED ANY INACCURATE PARTICULARS AND SUBMITTED THAT SECTION 271(1)(C) OF THE ACT HAS NO APPLICATION. 4. H E ALSO SUBMITTED BEFORE THE ASSESSING OFFICER THAT AS PER THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF THE I . T . A NO . 3225 /CHNY/201 9 : - 3 - : C OMMISSIONER OF INCOME TAX VS. RELIANCE PETRO - PRODUCTS PRIVATE LIMITED REPORTED IN 322 ITR 158 (SC), NO PENALTY CAN BE LEVIED. HOWEVER, THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND HE HAS OBSERVED THAT IF THE ASSESSEE BY AN IN ADVERTENT MISTAKE DEBITED THIS SPECULATIVE LOSS IN THE PROFIT & LOSS ACCOUNT, HE OUGHT TO HAVE FILED A REVISED RETURN OF INCOME TO CORRECT THE MISTAKE. BY OBSERVING THE ABOVE, THE ASSESSING OFFICER HAS LEVIED THE PENALTY. 5. ON APPEAL, THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 6. NONE APPEARED ON BEHALF OF THE ASSESSEE. 7. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIALS AVAILABLE ON RECORD AND HAD GONE THROUGH THE ORDER S OF THE AUTHORITIES BELOW. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAD STRONGLY SUPPORTED THE ORDER PASSED BY THE AUTHORITY BELOW. 8. IN THIS CASE, THE ASSESSING OFFICER HAD LEVIED PENALTY ON THE GROUND THAT THE SPECULATIVE LOSS CLAIMED IN THE PROFIT & LOSS I . T . A NO . 3225 /CHNY/201 9 : - 4 - : ACCOUNT IS NOT ALLOWABLE AND THEREFORE PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 IS LEVIED. THE CASE OF THE ASSESSEE IS THAT THE CLAIM MADE BY THE ASSESSEE WAS AN INADVERTENT MISTAKE AND HE HAD PRAYED THAT THE PENALTY MAY BE DELETED. HOWEVE R, BOTH THE AUTHORITIES BELOW HAD NOT ACCEPTED THE EXPLANATION GIVEN BY THE ASSESSEE. 9. WE FIND , IN THE CASE OF THE COMMISSIONER OF INCOME TAX VS. RELIANCE PETRO - PRODUCTS PRIVATE LIMITED (SUPRA) , THE HONBLE SUPREME COURT HAS OBSERVED THAT MERELY BECAUSE THE ASSESSEE HA D CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE , THAT BY ITSELF WOULD NOT ATTRACT THE PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961. 10. BY CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES O F THE CASE AND THE EXPLANATION GIVEN BY THE ASSESSEE AND ALSO BY FOLLOWING THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF THE COMMISSIONER OF INCOME TAX VS. RELIANCE PETRO - PRODUCTS PRIVATE LIMITED (SUPRA) , WE FIND THAT THE ASSESSEE HAD NEITHER CO NCEALED THE INCOME NOR FILED ANY INACCURATE PARTICULARS. THEREFORE, SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 HAS NO APPLICATION. I . T . A NO . 3225 /CHNY/201 9 : - 5 - : ACCORDINGLY, WE REVERSE THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND THE PENALTY LEVIED IS DELETED. 1 1 . IN THE RESULT, THE APPEA L FILED BY THE ASSESSEE IN I.T.A . NO. 3225 /CHNY/201 9 IS ALLOWED. ORDER PRONOUNCED ON 4 TH AUGUST , 2021 IN CHENNAI. SD/ - ( ) ( G. MANJUNATHA) /ACCOUNTANT MEMBER SD/ - ( ) ( V. DURGA RAO ) /JUDICIAL MEMBER / CHENNAI, / DATED: 4 TH AUGUST , 2021 IA , SR. PS / COPY TO: 1. / APPELLANT 2. / RESPONDENT 3. ( ) / CIT(A) 4. / CIT 5. / DR 6. / GF