M/s Keval (India) LTD, INDORE V. DCIT-R 1(1) , INDORE

ITA 652/Ind/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9815 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 09-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K G GOEL
• Assessee Lawyers: P D NAGAR
• Keywords: Speculation loss; Difference of opinion; Change of opinion; Set aside
• Section: 271(1)(c); 142(1); 153A; 14A; 43(5); 132

Judgement Text

KEVAL (INDIA) LTD ITA NO.652 & 653/IND/2017 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO.652 & 653/IND/2017 ASSESSMENT YEARS 2005-06 & 2007-08 REVENUE BY S HRI K.G. GOEL , SR.DR ASSESSEE BY SHRI P.D. NAGAR, C.A DATE OF HEARING 28 .03 .2019 D ATE OF PRONOUNCEMENT 04 .0 4 .2019 O R D E R PER MANISH BORAD. THE ABOVE CAPTIONED APPEALS ARE FILED AT THE INSTA NCE OF THE ASSESSEE PERTAINING TO ASSESSMENT YEARS 2005-06 & 2007-08 AND ARE DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-III (IN SHORT LD.CIT(A)], INDORE DATED 03.02.2017 WHICH IS ARISING OUT OF THE ORDER U/S 271(1)(C) OF THE INCOM E TAX ACT 1961(IN SHORT THE ACT) DATED 28.03.2013 FRAMED BY DCIT-1( 1), INDORE. M/S. KEVAL (INDIA) LTD, 170/10 RNT MARG (FILM COLONY), INDORE VS. DCIT, RANGE - 1(1), INDORE ( REVENUE ) (RESPONDENT ) PAN NO. AA CCK2395R KEVAL (INDIA) LTD ITA NO.652 & 653/IND/2017 2 2. ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL; ASSESSMENT YEAR 2005-06 1. THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE PENALTY U/S 271 ( 1 ) ( C ) OF THE ACT, RS. 643300/- IS QUITE ARBITRARY, UNWARR ANTED, UNJUSTIFIED AND BAD IN LAW. 2. THAT THE LEARNED CIT ( A ) NOT CONSIDERED THE FA CTS PROPERLY AND HENCE ORDER SO PASSED IS QUITE ILLEGAL, ARBITRARY, UNWARR ANTED, UNJUSTIFIED AND BAD IN LAW. 3.THAT THUS THE ORDER SO PASSED U/S 271 ( 1 ) ( C ) OF THE ACT, IS QUITE ILLEGAL, ARBITRARY, UNWARRANTED, UNJUSTIFIED AND BAD IN LAW. 4. THAT THE APPELLANT FURTHER CRAVES LEAVE, TO ADD TO ALTER AND/ OR TO AMEND ANY OF THE AFORESAID GROUNDS OF APPEAL AS AND WHEN NECESSARY. ASSESSMENT YEAR 2007-08 1. THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE PENALTY U/S 271 ( 1 ) ( C ) OF THE ACT, RS. 3,80,530/- IS QUITE ARBITRARY, UNWA RRANTED, UNJUSTIFIED AND BAD IN LAW. 2. THAT THE LEARNED CIT ( A ) NOT CONSIDERED THE FA CTS PROPERLY AND HENCE ORDER SO PASSED IS QUITE ILLEGAL, ARBITRARY, UNWARR ANTED, UNJUSTIFIED AND BAD IN LAW. 3.THAT THUS THE ORDER SO PASSED U/S 271 ( 1 ) ( C ) OF THE ACT, IS QUITE ILLEGAL, ARBITRARY, UNWARRANTED, UNJUSTIFIED AND BAD IN LAW. 4. THAT THE APPELLANT FURTHER CRAVES LEAVE, TO ADD TO ALTER AND/ OR TO AMEND ANY OF THE AFORESAID GROUNDS OF APPEAL AS AND WHEN NECESSARY. KEVAL (INDIA) LTD ITA NO.652 & 653/IND/2017 3 3. AS THE ISSUES RAISED AND THE FACTS IN THESE TWO APPEALS ARE COMMON, THEY ARE HEARD TOGETHER AND ARE BEING DISPO SED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVIT Y. 4. BRIEFLY STATED FACTS AS CULLED OUT FROM THE REC ORDS ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN TRADING OF GRAINS AND SHARES. A SEARCH U/S 132 OF THE I.T. ACT WAS CARRIED OUT AT T HE ASSESSEES PREMISES ON 02.05.2008 FOLLOWED BY ISSUANCE OF NOTI CE DATED 17.09.2010 U/S 153 OF THE ACT FOR THE ASSESSMENT YE AR 2005-06 AND 2007-08. IN RESPONSE TO THIS ASSESSEE HAD FILE D ITS INCOME TAX RETURN DECLARING INCOME AT RS.26,12,485/- AND RS.3 4,11,875/- ON 30.09.2009 RESPECTIVELY FOR ASSESSMENT YEARS 2005-0 6 AND 2007- 08. SUBSEQUENT TO SEARCH NOTICES U/S 153A R.W.S. 1 43(2) AND 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE A SSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS VARIOUS DETAIL S FILED BY THE ASSESSEE WERE EXAMINED. DISALLOWANCE WAS MADE U/S 14A OF THE ACT AND LD. A.O ALSO DISALLOWED THE LOSS ON SALE OF WHEAT TREATING IT TO BE A SPECULATIVE LOSS. THE ALLEGED TRANSACTIONS WERE DULY DISCLOSED IN THE BOOKS OF ACCOUNTS AND IT WAS PLEAD ED BY THE ASSESSEE THAT THE CLAIM OF BUSINESS LOSS IS BONAFID E BUT LD. A.O ON KEVAL (INDIA) LTD ITA NO.652 & 653/IND/2017 4 OBSERVING THAT THERE IS NO PHYSICAL DELIVERY OF GOO DS IN THE TRANSACTION LOSS ARISING THERE FROM IS A SPECULATIV E LOSS FALLING UNDER THE PROVISIONS OF SECTION 43(5) OF THE ACT AN D CAN BE SET OFF ONLY AGAINST AS SPECULATIVE PROFIT. SUBSEQUENTLY L D. A.O INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C)OF THE ACT ON THE DISALLOWANCE OF LOSS. 5. IN THE INSTANT TWO APPEALS THE COMMON ISSUES R AISED RELATES TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT BY THE LD. A.O AT RS.6,43,300/- AND RS.3,85,530/- COMPUTED ON THE DIS ALLOWANCE OF LOSS ON SALE OF WHEAT TREATING IT TO BE SPECULATIVE LOSS AMOUNTING TO RS. 17,58,000/- AND RS.11,30,500/- FOR ASSESSMENT Y EAR 2005-06 AND 2007-08 RESPECTIVELY. 6. AGGRIEVED WITH THE PENALTY LEVIED BY LD. A.O ASS ESSEE PREFERRED APPEAL BEFORE LD. CIT(A) BUT FAILED TO SUCCEED AS L D. CIT(A) TOOK A VIEW THAT HAD THE ASSESSEES CASE NOT BEEN SELECTED FOR SCRUTINY THE APPELLANT WOULD HAVE EASILY ESCAPED BY GETTING THE ALLEGED SPECULATIVE LOSS ADJUSTED AGAINST THE BUSINESS PROF IT. KEVAL (INDIA) LTD ITA NO.652 & 653/IND/2017 5 7. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L FOR BOTH THE ASSESSMENT YEARS 2005-06 AND 2007-08 RAISING SOLE ISSUE AGAINST LEVY OF PENALTY U/S 271(1)(C) OF THE ACT AT RS.6,4 3,300/- AND RS.3,80,530/- FOR ALLEGEDLY CLAIMING THE SPECULATIV E LOSS AS BUSINESS LOSS. 8. LD. COUNSEL FOR THE ASSESSEE PRAYED FOR DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT BY REFERRING TO THE FOLLOWING COMMON WRITTEN SUBMISSIONS FOR BOTH THE YEARS UNDER APPEAL :- THE TRANSACTIONS BY ISSUE OF INVOICES BY EXISTING C OMPANIES WERE EFFECTED IN NORMAL COURSE OF BUSINESS AND 'MENSERA' CANNOT B E LAID AT THE DOORS OF THE APPELLANT WHILE CLAIMING THE LOSS AS BUSINES S LOSS. THE ASSESSING OFFICER MERELY TRANSFERRED THE BUSINESS LOSS TO SPE CULATION LOSS AND ALLOWED THE SAME AS SE OFF AGAINST SPECULATION PROF IT EARNED ON SALE OF SHARES DURING THE YEAR ITSELF. THE DIFFERENCE BETWE EN THE RETURNED INCOME AND ASSESSED INCOME REMAINED AT RS, 1,71,176/- ONLY I.E. DISALLOWANCE U/S. 14A OF THE ACT. THERE WAS FULL AND TRUE DISCLOSURE OF ENTIRE FACTS AND SUCH LOSS WAS ALSO SUPPORTED AND EXPLAINED BY DOCUMENTARY EVIDENCE. TH E A.O. INCORRECTLY INVOKED THE PROVISIONS OF SECTION 43(5) OF THE ACT ON THE GROUND THAT THERE WAS NO MOVEMENT OF GOODS. IN THE CASE OF SRIP AL SATYAPAL VS. ITO (2008) 217 CTR 337 (RAJ) IT WAS HELD THAT 'FACTS O F TAKING THE PHYSICAL DELIVERY OF THE GOODS BY THE ASSESSEE IS NOT THE TE ST FOR DETERMINING THE SPECULATIVE TRANSACTION IN TERMS OF SECTION 43(5) B UT THE TEST IS SETTLEMENT OF THE TRANSACTION ENTERED INTO BY THE A SSESSEE OR ON HIS KEVAL (INDIA) LTD ITA NO.652 & 653/IND/2017 6 BEHALF OTHERWISE SHOWN BY ACTUAL DELIVERY OF THE CO MMODITY.' IT IT A CASE OF DIFFERENCE OF OPINION ONLY. IT IS SETTLED LAW THAT IN CASE WERE AN ISSUE IS DEBATA BLE, PENALTY U/S. 271(1)(C) OF THE ACT IS NOT ATTRACTED BECAUSE 'RNEN SERA' IS NOT PROVED AGAINST THE ASSESSEE. PENALTY IS LEVIABLE U/S. 271( L)(C) IN ADDITION TO TAX, IF ANY PAYABLE BY HIM, A SUM WHICH SHALL NOT BE LES S THAN BUT WHICH SHALL NOT EXCEED 3 TIMES THE AMOUNT OF TAX SOUGHT T O BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INC OME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. IN THE CASE OF APPELLANT BECAUSE OF TREATMENT OF BUSINESS LOSS INTO SPECULATION LOSS , THERE WAS NO ATTEMPT TO EVADE ANY TAX BY THE APPELLANT. SEE HAS DISCLOSE D ALL MATERIAL FACTS IN ITS RETURN OF INCOME IN RESPECT OF BUSINESS LOSS IN CURRED BY THE ASSESSEE AND THE EXPLANATION OFFERED BY HIM HAS NOT BEEN FOU ND FALSE. IT IS ONLY CHANGE OF INCOME FROM ONE HEAD TO OTHER HEAD. THERE BEING CHANGE OF OPINION AND BEING DEBATABLE ISSUE, LEVY OF PENALTY AND CONFIRMATION THEREOF U/S. 271(L)(C) OF THE ACT IS WHOLLY UNJUSTI FIED. RELIANCE IS PLACED ON FOLLOWING JUDGMENTS:- I) JAGDISH R. ACHARYA VS. ACIT. ITA NO.160/AHD/2013(AH MEDABAD ITAT) II) CIT VS. AURICA INVESTMENT & SECURITIES LTD 310 ITR 121 (DEL HC) (2009) III) KRISHNA SOYA PRODUCT PVT. LTD VS. DCIT, INDORE ITA NO.496/IND/2015 ORDER DATED 28.09.2017 (INDORE BENC H) IV) CIT NAVINCHANDRA & CO (2014) 42 TAXMANN.COM 28 (GUJ ) V) EID PERRY INDIA LTD VS. CCT (2000) 117 STC 457 (SC) VI) DILIP N SHROFF VS. JCIT (2007) 291 ITR 519 (SC) VII) CIT VS SHREE PRAVEEN B. GADA (2011) 18 ITJ 65 (MPHC ) VIII) CIT VS. AMIT JAIN (2013) 258 CTR 88 (DEL HC) IX) CIT VS. JASVINDER SINGH AHUJA (2013) 259 CTR 213 (D EL HC) KEVAL (INDIA) LTD ITA NO.652 & 653/IND/2017 7 9. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEM ENTLY ARGUED AND SUPPORTING THE ORDERS OF LOWER AUTHORITI ES. 10. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND ALSO GONE THROUGH THE JUDGMENT S REFERRED AND RELIED BY THE LD. COUNSEL FOR THE ASSESSEE. THE SO LE GRIEVANCE RAISED IN THESE TWO APPEALS REVOLVES AROUND THE PEN ALTY U/S 271(1)(C) OF THE ACT AT RS.6,43,300/- AND RS.3,80,5 30/- LEVIED BY THE LD. A.O AND CONFIRMED BY THE LD. CIT(A). THIS PENALTY IS LEVIED BY THE LD. A.O ON COMING TO A FINDING THAT THE ASSE SSEE INTENTIONALLY CLAIMED THE LOSS ON SALE OF WHEAT AS A BUSINESS LOSS WITHOUT ESTABLISHING ANYTHING ABOUT THE MOVEMENT OF GOODS WHICH SHOWS THAT THE TRANSACTION OF PURCHASE AND SALES OF WHEAT IS SPECULATIVE IN NATURE AND PROVISIONS OF SECTION 45( 3) OF THE ACT APPLIES THEREON AND THE LOSS ARISING FROM WHICH TRA NSACTION WITHOUT DELIVERY OF GOODS FALLS UNDER THE CATEGORY OF SPECU LATION LOSS AND THE SAME CAN BE ADJUSTED/CARRY FORWARD TO BE ADJUSTED A GAINST SPECULATIVE PROFIT ONLY. 11. AS REGARDS THE TRANSACTION OF PURCHASE AND SALE OF WHEAT REVENUE AUTHORITIES HAVE NOT POINTED OUT ANY MISTAK E, ERROR OR KEVAL (INDIA) LTD ITA NO.652 & 653/IND/2017 8 ANOMALY IN THE GENUINENESS OF THE TRANSACTION WITH REGARD TO THE QUANTITY OF GOODS, AMOUNT OF PURCHASE AND SALE, DET AILS OF THE PARTY WITH WHOM THE TRANSACTION HAS BEEN CARRIED OUT. IN NUTSHELL ASSESSEE HAS NOT CONCEALED ANY PARTICULARS RELATING TO THE ALLEGED TRANSACTION FOR BOTH THE ASSESSMENT YEARS. 12. NOW IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE WHERE ASSESSEES MENSERA IS NOT PROVED AND THERE IS NO FURNISHING OF INACCURATE PARTICULARS OF TRANSACTIONS, WHETHER THE PENALTY IS LEVIABLE U/S 271(1)(C) OF THE ACT NEEDS TO BE ADJUD ICATED. 13. WE OBSERVE THAT THE CO-ORDINATE BENCH, INDORE I N THE CASE OF KRISHNA SOYA PRODUCT PVT. LTD VS. DCIT(SUPRA) ADJUD ICATING THE SIMILAR TYPE OF ISSUE OF LEVY OF PENALTY U/S 271(1) (C) OF THE ACT IN RESPECT OF TREATING THE LOSS ON TRADING OF COMMODIT Y EXCHANGE TREATED AS BUSINESS LOSS BUT WAS HELD TO BE AS SPEC ULATIVE LOSS BY THE REVENUE AUTHORITIES THE PENALTY LEVIED U/S 271( 1)(C) OF THE ACT WAS DELETED BY THE TRIBUNAL OBSERVING AS FOLLOWS; KEVAL (INDIA) LTD ITA NO.652 & 653/IND/2017 9 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE PERUS AL OF THE ASSESSMENT ORDER AND THE PENALTY ORDER REVEALS THAT THE AO HAS REJECTED THE CONTENTION OF THE ASSESSEE THAT TRANSA CTIONS ENTERED INTO IN RESPECT OF SOYA OIL IN THE COURSE OF ITS BU SINESS TO GUARD AGAINST LOSS TO FUTURE FLUCTUATION IN RESPECT OF IT S CONTRACT FOR ACTUAL DELIVERY FOR HOLDING OF STOCK OF GOODS MANUFACTURED BY ONE MORE IN THE NATURE OF SPECULATIVE TRANSACTION. THEREFORE TH E BUSINESS LOSS CLAIMED WAS DISALLOWED BY THE A.O AND TREATING THE SAME AS SPECULATIVE TRANSACTION U/S 43(5) OF THE ACT. THUS, THE PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THE AO HAS MADE D ISALLOWANCE OF SPECULATION LOSS ON THE BASIS OF FACTS AS DISCLO SED BY THE ASSESSEE IN TH E RETURN OF INCOME AND ALSO DURING THE ASSESSMENT PROCEEDINGS. WE FIND THAT THE ASSESSEE HAS FURNISHE D ALL RELEVANT FACTS AND MERELY BECAUSE THE AO HAS CHANGE D THE HEAD OF LOSS FROM BUSINESS LOSS TO SPECULATIVE LOS AND ALLOWED TO CARRY FORWARD OF THE SAME THE PENALTY U/S 271(1) (C) COULD NOT BE LEVIED. WHERE THE EXPLANATION IS BONAFIDE AND AL L THE FACTS RELATING TO THE SAME HAVE BEEN DISCLOSED THEN THERE IS NO CASE OF LEVY OF PENALTY. THE FINDINGS RECORDED IN THE ASSES SMENT ORDER IS NOT CONCLUSIVE FOR DECIDING THE IMPOSITION OF PE NALTY AS IT HAS ONLY A PERSUASIVE VALUE AND NON FILING OF APPEAL AG AINST THE SAID DISALLOWANCE DOES NOT MEAN THAT THE PENALTY HA S TO BE IMPOSED AUTOMATICALLY. IT IS TRITE LAW THAT PENALTY PROCEEDINGS ARE DISTINCT AND SEPARATE PROCEEDINGS FROM ASSESSME NT PROCEEDINGS. I T IS SETTLED LAW THAT WHEN THE ISSUE IS DEBATABLE, THEN THE PROVISIONS OF PENALTY U/S 271 (L)(C) IS NO T ATTRACTED, BECAUSE MENSERA IS NOT ESTABLISHED AGAINST THE ASSE SSEE. THE LD. COUNSEL HAS PLACED RELIANCE ON THE DECISION IN THE CASE OF CIT V NAVICHANDRA & CO (2014) 42 TAXMANN.COM 28 (GUJ) WHEREIN WHILE SUBMITTING THE RETURN OF INCOME, THE ASSESSEE KEVAL (INDIA) LTD ITA NO.652 & 653/IND/2017 10 TREATED LOSS FROM DERIVATIVE TRANSACTION AS NORMAL BUSINESS LOSS, WHEREAS THE AO DURING THE ASSESSMENT PROCEEDINGS TR EATED THE SAME AS SPECULATIVE NATURE AND DISALLOWED THE SAME AND CONSEQUENTLY INITIATED PENALTY PROCEEDINGS U/S 271( L)(C) AND THE SAME WAS DELETED BY THE CIT(A)ON THE GROUND THAT IT WAS A BONAFIDE CLAIM ON THE PART OF THE ASSESSEE, CONSIDE RING THESE FACTS, THE HON'BLE HIGH COURT HAS HELD THAT SINCE A LL RELEVANT PARTICULARS IN RESPECT OF LOSS WERE CORRECT AND LAW IN RESPECT OF SAID ITEMS WAS NOT VERY CLEAR BECAUSE THERE WAS DIVERGENT VIEWS OF THE TRIBUNALS AT RELEVANT TIME AND THEREFORE NO INTERFERENCE OF IMPUGNED ORDER WAS CALLED FOR AND THE PENALTY IS RI GHTLY DELETED BY THE CIT(A) AND CONFIRMED BY THE ITAT. SINCE THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THAT CASE, THE RATIO OF THE SAID DECISION IS SQUARELY APPLICABLE IN THE CASE OF THE. ASSESSEE . FURTHER, THE ASSESSEE HAS RELIED IN THE CASE OF JAGDISH R. ACHAR YA V CIT 160/(AHD)/2013, CO-ORDINATE BENCH OF AHMADABAD TRIB UNAL, WHEREIN THE EXPLANATION OFFERED REGARDING SPECULATI ON LOSS WAS FOUND TO BE ONLY THE CHANGE OF INCOME FROM ONE HEAD TO ANOTHER HEAD AND WHERE THE ASSESSEE HAS DISCLOSED ALL THE MATERIAL FACT AND THE PENALTY U/S 271(L)(C) OF THE ACT WAS NOT TO BE LEVIED. SIMILARLY DECISIONS OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V AURICA INVESTMENT & SECURITIES LTD (SUPRA) AND CIT V OSCAR UDYOG LTD OF HON'BLE COURT OF KARNATAKA' (SUPRA) AL SO SUPPORTS THE CASE OF THE ASSESSEE. THE AS SESSEE HAS ALSO RELIED IN THE CASE OF CIT V SPIC STECH PVT. LTD (2004) 32 ITC 244 (MP) WHICH ALSO SUPPORTS THE CASE OF THE ASSESSEE. THEREFORE W E ARE OF THE CONSIDERED VIEW THAT THE PENALTY IS NOT SUSTAINABLE IN THE LAW IN THE LIGHT OF RATIO LAID DOWN BY SUPREME COURT IN TH E CASE OF CIT V RELIANCE PETRO PRODUCTS PVT. LTD (2010) 322 ITR 158 (SC)/ 189 TAXMANN 322 (SC) WHEREIN IT WAS HELD THAT MERELY BE CAUSE THE ASSESSEE HAS CLAIMED THE EXPENDITURE, WHICH CLAIM W AS NOT KEVAL (INDIA) LTD ITA NO.652 & 653/IND/2017 11 ACCEPTED BY THE REVENUE, THE PENALTY U/S 271 (1) (C ) OF THE ACT CANNOT BE ATTRACTED. HAVING CONSIDERED THE ABOVE FA CTS AND JUDICIAL PRONOUNCEMENTS. THE PENALTY LEVIED AT RS.5 ,10,000/- U/S 271(1)(C) OF [HE ACT IS THEREFORE DELETED. THE GROUND NO.L & 2 OF THE APPEAL ARE THEREFORE ALLOWED. 14. AS THE FACTS OF THE INSTANT APPEALS ARE SAME TO THE FACTS IN THE CASE OF KRISHNA SOYA PRODUCT PVT. LTD VS. DCIT(SUPR A) REFERRED ABOVE, WE RESPECTFULLY FOLLOWING THE SAME ARE OF TH E CONSIDERED OPINION THAT BOTH THE LOWER AUTHORITIES ERRED IN LE VYING THE PENALTY U/S 271(1)(C) OF THE ACT ON THE ALLEGED TRANSACTION OF PURCHASE AND SALE OF WHEAT BECAUSE THE ASSESSEE HAS BONAFIDELY T REATED THE LOSS AS BUSINESS LOSS AND DISCLOSED ALL NECESSARY DETAIL S RELEVANT TO THE TRANSACTION IN THE BOOKS OF ACCOUNTS AND FURTHER FO R THE ALLEGED TRANSACTION TWO DIVERGENT VIEWS WERE POSSIBLE THERE BY THE ALLEGED LOSS COULD BE TREATED AS A BUSINESS LOSS OR SPECULA TION LOSS. WE THEREFORE SET ASIDE THE FINDING OF LOWER AUTHORITIE S AND ALLOW THE APPEALS OF THE ASSESSEE FOR ASSESSMENT YEAR 2005-06 & 2007-08 AND DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT AT RS.6,43,300/- AND RS.3,80,530/- RESPECTIVELY. KEVAL (INDIA) LTD ITA NO.652 & 653/IND/2017 12 15. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ITA NO.652 & 653/IND/2017 ARE ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 04.04.201 9. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 4 TH APRIL, 2019 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE