PHULCHAND SONS INVESTMENTS P.LTD, MUMBAI V. DCIT CIR 2(2), MUMBAI

ITA 4899/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3736 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 07-03-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 26-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SALMAN KHAN
• Keywords: Speculation loss
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.4899/M/2013 ASSESSMENT YEAR: 2005-06 M/S. PULCHAND SONS INVESTMENTS PVT. LTD., R.S. KHANDELWAL & ASSOCIATES, 404, PROSPECT CHAMBERS, 317, D.N. ROAD, FORT, MUMBAI 0 400 020 PAN: AAACP8901G VS. DEPUTY COMMISSIONER OF INCOME-TAX-2(2), AAYAKAR BHAVAN, M.K. MARG, MUMBAI - 400020 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI NEELKANTH KHANDELWAL, A.R. REVENUE BY : SHRI M. SALMAN KHAN, D.R. DATE OF HEARING : 07.03.2016 DATE OF PRONOUNCEMENT : 11.03.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 28.05.2012 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2005-06 AGITATING THE CONFIRMATION OF THE LEVY OF PENALTY UNDER SECTION 2 71(1)(C) OF THE ACT. 2. AT THE OUTSET, THE LD. A.R. OF THE ASSESSEE HAS STATED THAT THE PENALTY IN THIS CASE HAS BEEN LEVIED BY THE LOWER AUTHORITIES BECAUSE OF THE INVOCATION OF DEEMING PROVISIONS OF EXPLANATION TO SECTION 73 OF THE INCOME TAX ACT, WHEREBY, THE LOSS INCURRED BY THE ASSESSEE FROM TRA DING IN SHARES HAS BEEN TREATED AS SPECULATIVE IN NATURE. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) THEREFORE DISALLOWED THE SETTING OFF OF THE SAME AGAINST THE CONSULTANCY INCOME OF THE ASSESSEE. HE HAS SUBMITT ED THAT THE ADDITION IN THIS CASE HAS BEEN MADE BECAUSE OF DEEMING FICTION BUT N OT BECAUSE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME OR FOR CONCEALM ENT OF INCOME. HE HAS ITA NO.4899/M/2013 M/S. PULCHAND SONS INVESTMENTS PVT. LTD. 2 FURTHER STRESSED THAT EVEN WHILE MAKING THE ADDITIO N, THE AO HAS WRONGLY CALCULATED THE CONSULTANCY INCOME OF THE ASSESSEE A ND ALSO THE SPECULATIVE INCOME. HE HAS FURTHER STATED THAT EVEN THE SPECUL ATIVE LOSS OF THE ASSESSEE HAS BEEN ALLOWED TO BE CARRIED FORWARD FOR THE NEXT YEA R. HE HAS STATED THAT IT IS NOT A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. 3. THE LD. D.R., ON THE OTHER HAND, HAS RELIED UPON THE FINDING OF THE LOWER AUTHORITIES. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE LD. REP RESENTATIVES OF THE PARTIES, WE ARE OF THE VIEW THAT IT IS NOT A CASE O F FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. EV EN THE ASSESSEE HAS DEMONSTRATED THAT THERE IS MISTAKE IN CALCULATION O F THE SPECULATIVE LOSS ALSO. NEVERTHELESS, IN OUR VIEW, IT IS NOT A CASE OF FURN ISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. THE PENALTY LE VIED BY THE LOWER AUTHORITIES IS ORDERED TO BE DELETED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.03.2016. SD/- SD/- (RAJESH KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 11.03.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.