9911796707
TMI Blog1993 (1) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed that these shares were held by him as stock-in-trade since2nd April, 1976. However, the ITO treated the transaction of sale of these shares as shares held for investment, because it was an isolated transaction and giving an example of earlier year, he computed the capital gains at Rs. 2,90,840 on the sale of shares which was assessed to tax. In respect of interest claimed under s. 80V amounting to Rs. 11,561, the claim was disallowed because it did not pertain to income-tax proceedings. Thus, following additions were made by him: 1. Addition on account of sale of share treating the income under the head capital gains. 1. Addition on account of sale of share treating the income under the head capital gains. Rs. 11,561 2. Disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares is sufficient to claim profit in share trading. It was submitted that even if the assessee could not succeed upto the stage of Tribunal, but for the purpose of levy of penalty under s. 271(1)(c) the Department has to establish that the assessee had concealed particulars of income or furnished inaccurate particulars of such income. When the explanation of the assessee is found to be false, then only it can be treated that the particulars furnished by the assessee were inaccurate. It was submitted that there is no finding of any authority that explanation of the assessee was found false. The assessee made a bona fide claim which was rejected by the Revenue authorities but it does not mean that explanation given by the assessee was fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has transacted in sale and purchase of shares. Therefore, it cannot be said that the sale and purchase of shares in this assessment year was a single and isolated transaction. In the case of CIT vs. Ganga Prasad Birla (HUF) (1992) 101 CTR (Cal) 118 (1993) 199 ITR 173 (Cal) similar question arose before the Hon'ble Calcutta High Court. In that case the Hon'ble Calcutta High Court observed that the solitary speculative transaction by an assessee will not prevent the transaction from being speculative business. If the transaction amounted to an adventure in the nature of trade, then the profits of such trade will have to be treated as business income. But, if the transaction was settled without actual delivery of goods, then the adventure in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has also entered into sale and purchase of these shares in the asst. yrs. 1977-78 to 1980-81. Therefore, the claim of the assessee was bona fide and it cannot be said that the particulars relating to purchase and sale of shares were concealed by the assessee. Similarly, it can be said for the claim of interest under s. 80V. Therefore, the assessee had bona fide made a claim before the Revenue authorities which was rejected. If the claim of the assessee was bona fide, no penalty can be levied. The learned Departmental Representative submitted that the word "bona fide" has been introduced on the statute book w.e.f.10th Sept., 1986. Therefore, it cannot apply to the case pertaining to the asst. yr. 1980-81. So far as this contention is con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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