2011 (9) TMI 1126 - AT - Income Tax

Summary

Issues Involved:
1. Disallowance of set-off of carried forward short term capital loss.
2. Cancellation of penalty u/s 271(1)(c) of the IT Act.

Summary:

Issue 1: Disallowance of Set-off of Carried Forward Short Term Capital Loss

The assessee appealed against the order of CIT(A) confirming the AO's action of disallowing the set-off of carried forward short term capital loss of Rs. 20,30,000 for AY 1992-93 against short term capital gain of Rs. 20,25,000 for AY 1993-94. The CIT(A) held that findings of earlier years cannot be disturbed in the current year's appellate proceedings. The AO had confirmed that no set-off was permissible as the findings of earlier years were upheld by the ITAT. The assessee's contention that the nature of transactions was similar and should be treated as speculative was not accepted. The Tribunal upheld the CIT(A)'s decision, noting that the findings of earlier years had become final and could not be altered in the current appeal. Thus, the appeal of the assessee was dismissed.

Issue 2: Cancellation of Penalty u/s 271(1)(c) of the IT Act

The revenue department appealed against the CIT(A)'s order canceling the penalty of Rs. 15,13,190 levied u/s 271(1)(c) for furnishing inaccurate particulars of income. The CIT(A) found that the assessee had disclosed all particulars and the issue was a matter of difference of opinion rather than concealment or furnishing of inaccurate particulars. The CIT(A) noted that the AO had not found the particulars furnished by the assessee to be false and there was no deliberate attempt to conceal income. The Tribunal agreed with the CIT(A), emphasizing that the dispute arose from a difference of opinion and not from any malafide intention. The penalty was rightly canceled as there was no concealment of income or filing of inaccurate particulars. Consequently, the departmental appeal was dismissed.

Conclusion:

Both the appeal of the assessee and the departmental appeal were dismissed. The Tribunal upheld the CIT(A)'s decisions on both the disallowance of set-off and the cancellation of penalty.