ITO, New Delhi V. Sh Ethno Financial Research Pvt Ltd, New Delhi

ITA 4189/DEL/2012

• Counselvise Citation: 418920114 RSA 2012
• Duration Of Justice: 2 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-01-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 03-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Keywords: Business income; Speculation loss

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH. T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .NO. - 4189 /DEL/201 2 (ASSESSMENT YEAR - 2 005 - 06 ) ITO, WARD - 11(2), NEW DELHI. (APPELLANT) VS ETHNO FINANCIAL RESEARCH PVT. L T D., 40/17, C.R.PARK, NEW DELHI PAN - AAACE7366E (RESPONDENT) APPELLANT BY SMT. PARWINDER KAUR, SR. DR RESPONDENT BY SH.RAJESH DUREJA, ADV. ORDER PER DIVA SINGH, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 23 . 05.2012 OF CIT(A) - XIII , NEW DELHI PERTAINING TO 200 5 - 0 6 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: - 1. THE LEARNED CIT(A) HAS ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW IN DELETING THE PENALTY OF RS.3,09,045/ - ON ACCOUNT OF FURNISHING INACCURATE PARTICULARS OF INCOME. 2. THE LEARNED CIT(A) HAS ERRED ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW IN HOLDING THAT THE PENALTY LEVIED BY THE ASSESSING OFFICER ON MERE CHANGE OF TREATMENT OF LOSS DOES NOT AMOUNT TO CONCEALMENT AND NO PENALTY IS LEVIABLE. 2. THE RELEVANT FACTS OF THE CASE AS EMANATING FROM THE RECORD ARE THAT THE ASSESSEE DECLARED A LOSS INCOME OF RS. 5,78,710/ - BY WAY OF FILING A RETURN. THE RETURN WAS PICKED UP FOR SCRUTINY AND INCOME WAS DETERMINED AT RS.16,26,054/ - . THE ASSESSEE CHALLENGED THE ADDITION S IN APPEAL BEFORE THE CIT(A) WHO ALLOWED THE APPEAL OF THE ASSESSEE VIDE HIS ORDER DATED 27.07.2008. AGGRIEVED BY THIS THE REVENUE FILED ITS APPEAL BEFORE THE TRIBUNAL . T HE TRIBUNAL PARTLY ALLOW ED THE REVENUE S APPEAL HOLDING THAT THE LOSS SUSTAINED BY THE ASSESSEE WAS SPECULATIVE IN 2 I.T.A .NO. - 4189/DEL/2012 NATURE AS E XPLANATION TO SECTION 73 WAS ATTRACTED ON FACTS. AS A RESULT OF THIS THE AO REQUIRED THE ASSESSEE TO EXPLAIN WHY PENALTY U/S 271(1)(C) FOR F URNISHING INACCURATE PARTICULARS OF INCOME SHOULD NOT BE IMPOSED. THE ASSESSEE IN THE PENALTY PROCEEDINGS IS FOUND TO HAVE SUBMITTED THAT ALL FACTS WERE CORRECTLY DISCLOSED AND THE CLAIM WAS BASED ON THE ORDER OF THE ITAT IN AMAN PORTFOLIOS PVT. LT D. VS DCIT 92 ITD 324 & CBDT CIRCULAR NO. - 204 DATED 24.07.1976 . ACCORDINGLY THE PENALTY SHOULD NOT BE IMPOSED. HOWEVER NOT CONVINCED WITH THE EXPLANATION OFFERED THE AO LEVIED PENALTY OF RS.3,09,045/ - 3 . IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY THE SUBM ISSIONS ADVANCED BEFORE THE AO WERE REITERATED. APART FROM THE DECISION RELIED UPON BEFORE THE AO, R ELIANCE WAS ALSO PLACED UPON THE DECISION OF THE APEX COURT IN THE CASE OF RELIANCE PETRO PRODUCTS LTD. 322 ITR 158 (SC). CONSIDERING THE SUBMISSIONS THE C IT(A) CAME TO THE FOLLOWING CONCLUSION: - 6.3 DECISION I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND OBSERVATION OF THE ASSESSING OFFICER. IT IS SEEN THAT ASSESSING OFFICER HAS LEVIED PENALTY OF RS. 3,09,045/ - ON ACCOUNT OF SET OFF OF SPECULATIVE LOSS AGAINST INCOME FROM OTHER SOURCES AND CLAIMING LOSS OF RS. ( - )5,71,710 / - . THE ASSESSING OFFICER DISALLOWED THE CLAIM OF SET OFF OF SPECULATIVE LOSS AGAINST INCOME FROM OTHER SOURCES AND BUSINESS INCOME. THIS ISSUE HAS BEEN CONFIRMED BY THE CIT(APPEAL) AS WELL AS ITAT. BASED ON ABOVE DECISION ASSESSING OFFICER LEVIED A PENALTY OF RS. 3,09,045/ - . IT IS CLAIMED BY THE APPELLANT THAT THE SET OFF OF SPECULATIVE LOSS AGAINST INCOME FROM OTHER SOURCES AND BUSINESS INCOME WAS CLAIMED ON THE BASIS OF HON'BLE IT AT DECISION IN THE CASE OF AMAN PORTFOLIO PVT. LTD. VS. DCIT 92 ITD 324 AND ALSO CIRCULAR NO. 204 OF DATED 24.07.1976. HOWEVER, SUCH SET OFF WAS DISALLOWED BY THE ASSESSING OFFICER AND SAME HAS BEEN CONFIRMED BY THE HON'BLE ITAT DELHI THE APPELLANT HAS CL AIMED THAT HE HAS NOT SUBMITTED ANY WRONG PARTICULARS OF INCOME AND ACTED IN BONAFIDE MANNER. HE HAS FURTHER SUBMITTED THAT SET OFF OF LOSS FROM SHARES AGAINST INCOME FROM OTHER SOURCES WAS CLAIMED ON THE BASIS OF LEGAL ADVICE RECEIVED BY IT BASED ON THE J UDGMENT AVAILABLE AT THAT POINT OF TIME. THE APPELLANT HAS ALSO STATED THAT HE DID NOT CONCEAL ANY PARTICULAR OF ITS INCOME OR FURNISHED INACCURATE PARTICULARS. IF THE DETAILS FURNISHED ARE FOUND TO BE NOT CONCEALED OR FURNISHED INACCURATELY, THEN THE PENA LTY CANNOT BE LEVIED. IT IS CLAIMED BY THE APPELLANT THAT NO INFORMATION GIVEN IN THE RETURN OF INCOME WAS FOUND TO BE INCORRECT OR INACCURATE. THE WORD 'INACCURATE PARTICULARS' MEAN THAT THE DETAILS SUPPLIED IN THE RETURN ARE NOT ACCURATE, NO EXACT OR COR RECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. THE APPELLANT CLAIMS THAT NO FINDING HAS BEEN GIVEN BY THE ASSESSING OFFICER IN PENALTY ORDER THAT APPELLANT HAS FURNISHED ANY INACCURATE PARTICULARS OF 3 I.T.A .NO. - 4189/DEL/2012 INCOME OR ANY INCORRECT OR FALSE INFORMATION, THEREFORE, QUE STION OF LEVY OF PENALTY DOES NOT ARISE. THE APPELLANT ALSO CLAIMED THAT MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE APPELLANT. THE APPELLANT HAS ALS O RELIED UPON THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. AURIC INVESTMENT & SECURITIES LTD. 310 ITR 121 (DEL) AND CIT VS. BHARTESH JAIN 323 ITR 358 (DEL) WHEREIN IT IS HELD THAT MERE CHANGE OF TREATMENT OF LOSS DOES NOT AMOUNT TO CONCE ALMENT U/ S 271 (L)( C) OF THE IT ACT. .. 4 . AGGRIEVED BY TH IS THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. LD. SR. DR RELIES UPON THE FINDINGS RECORDED IN T HE ASSESSMENT ORDER AND THE PENALTY ORDER. APART FROM THAT RELIANCE WAS PLACED UPO N CIT VS ZOOM COMMUNICATION PVT. LTD. 327 ITR 510 (DELHI HIGH COURT ) . 4.1. THE LD. AR ON THE OTHER HAND APART FROM RELYING UPON THE FINDING ARRIVED AT IN THE IMPUGNED ORDER REITERAT ED THE SUBMISSIONS ADVANCED BEFORE THE AUTHORITIES BELOW . C OPY OF THE OR DER IN AMAN PORTFOLIOS PVT. LTD.(CITED SUPRA) WAS ALSO FILED IN SUPPORT OF THE CONCLUSION THAT THE ASSESSEE S CLAIM IS BONAFIDE. RELIANCE WAS ALSO PLACED UPON CIT VS MADHUSHREE GUPTA [2013] 33 TAXMANN.COM 286 (DELHI) WHICH HAS HAD AN OCCASION TO CONSIDER ZOOM COMMUNICATION S IN MORE OR LESS IDENTICAL CIRCUMSTANCES. 5. WE HAVE HEARD THE RIVAL SUBMISSION AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE DECISION CITED BEFORE US. ON A CONSIDERATION THEREOF WE ARE OF THE VIEW THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE THE IMPUGNED ORDER DESERVES TO BE UPHELD. NOTWITHSTANDING THE FACT THAT THE ASSESSEE S CLAIM WAS NOT ALLOWED ON FACTS BY THE ITAT IN THE QUANTUM PROCEEDINGS IT IS SEEN THAT IT HAS NOT BEEN DISPUTED THAT THE RETURN FIL ED BY THE ASSESSEE WAS BASED ON THE PREVALENT VIEW AS IS EVIDENT FROM ORDER THE OF THE BENCH IN A M AN PORTFOLIO PVT. LTD. VS DCIT (CITED SUPRA). IN THE CIRCUMSTANCES ON FACTS WHERE ALL RELEVANT FACTS HAVE BEEN DISCLOSED AND THE BONAFIDE OF THE ASSESSEE IN TERMS OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS MADHUSHREE GUPTA STANDS ESTABLISHED WE FIND THAT THE RELIANCE PLACED BY THE LD. SR. DR IN ZOOM COMMUNICA TIONS IS MISPLACED. THE IMPUGNED ORDER IS FURTHER SUPPORTED BY THE 4 I.T.A .NO. - 4189/DEL/2012 DECISION OF THE JURISDICTIONAL HIGH COURT IN AURIC INVESTMENT & SECURITIES LTD. (CITED SUPRA) AND BHARTESH JAIN (CITED SUPRA). 5.1. ACCORDINGLY FOR THE REASON GIVEN HEREIN ABOVE THE DEPART MENTAL GROUND IS DISMISSED. 6 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 3 0 T H OF JANUARY 2015 . S D / - S D / - ( T.S.KAPOOR ) (DIVA SINGH) AC COUNTANT MEMBER JUDICIAL MEMBER DATED: 3 0 / 01 /201 5 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI