2017 (11) TMI 1064 - AT - Income Tax

Penalty u/s 271(1)(c) - loss incurred in trading of shares treated as speculation loss on the basis that delivery of shares was not taken - Held that - As in the present case there is neither allegation of the assessee attempting to defraud the revenue nor is there any allegation that the loss in question was not actually sustained by the assessee, there is no point imposing penalty. See Dy. CIT vs. Shree Ram Electrocast 2017 (8) TMI 653 - ITAT KOLKATA - Decided in favour of assessee.

Summary

Issues:
Levy of penalty under section 271(1)(c) for filing inaccurate particulars of income and concealing true income.

Analysis:
The appellant contested the penalty imposed under section 271(1)(c) for trading losses treated as speculative. The appellant argued that no inaccurate particulars were furnished, and income was not concealed. The appellant cited various judicial precedents to support their case, including the decision in Dy. CIT vs. Shree Ram Electrocast and CIT vs. Harshvardhan Chemicals & Minerals Ltd. The Co-ordinate Bench considered the genuineness of the share trading loss and concluded that penalty under section 271(1)(c) was not justified. Referring to judgments such as CIT vs. SPK Steels (P.) Ltd. and CIT vs. Bhartesh Jain, the Co-ordinate Bench directed the Assessing Officer to delete the penalty, as the facts were similar to the cited cases. Consequently, the grounds raised by the appellant were allowed, and the appeal was upheld.

In summary, the issue revolved around the imposition of penalty under section 271(1)(c) for trading losses treated as speculative. The appellant argued against the penalty, citing lack of inaccurate particulars and concealment of income. Judicial precedents were referenced to support the appellant's case, leading the Co-ordinate Bench to rule in favor of the appellant and direct the deletion of the penalty by the Assessing Officer.