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TMI Blog2012 (7) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has shown abnormal and excessive loss on the claimed decrease in value and for which also, no satisfactory explanation was adduced - against assessee. - ITA No. 332/Ind/2011 - - - Dated:- 28-5-2012 - SHRI JOGINDER SINGH, SHRI R.C. SHARMA, JJ. Appellant by Shri S.S. Deshpande Respondent by Shri Arun Dewan O R D E R PER JOGINDER SINGH, judicial member The assessee is aggrieved by the impugned order dated 12.9.2011 on the ground that on the facts and in the circumstances of the case, the ld. first appellate authority erred in upholding the imposition of penalty of Rs.9,62,500/- u/s 271(1)(c) of the Act. 2. During hearing, we have heard Shri S.S. Deshpande, ld. Counsel for the assessee and Shri Arun Dewan, l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for such valuation and ultimately held that it is a colourable device adopted by the assessee to reduce tax liability by placing reliance in the case of Mcdowell Co. Ltd. (154 ITR 148) (SC) and disallowed the claimed trading loss of Rs.48,70,970/-. On appeal before the ld. CIT(A), the addition on account of trading loss was restricted to Rs.25 lakhs. The Assessing Officer imposed penalty u/s 271(1)(c) of the IT Act to the tune of Rs.9,62,500/- which is under challenge before this Tribunal. During hearing, the ld. Counsel for the assessee also contended that penalty proceedings and quantum proceedings are separate and distinct. We are in agreement with this proposition but at the same time, the totality of the facts cannot be ignored b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and as such, there was no income, therefore, there is no question of concealment of income, consequently, no penalty can be imposed. This issue has been settled by the Hon'ble Apex Court in JCIT vs. Saheli Leasing Industries Ltd. (2010) 324 ITR 170 (SC) by holding that even where return disclosing nil income are there, penalty is still leviable because amendment made in 1996 is only clarificatory. While coming to this conclusion, the Hon ble Court applied the decision already taken in CIT vs. Gold Coin Health Food P. Ltd. (304 ITR 308) (SC) and reversed the decision of Hon ble Gujarat High Court. The Hon ble Apex Court held as under: The purpose behind sec. 271(1)(c) of the I.T. Act, 1961, was to penalise the assessee for (a) conceal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see in its return of income showed the value of the jewellery at Rs.17 lakhs. The Assessing Officer did not accepted the explanation for the difference and treated the amount of Rs.84,865/- as unaccounted investment. Penalty u/s 271(1)(c) of the Act was imposed. The Hon'ble High Court held that since there was a small difference in valuation, no penalty could be levied. However, in the present appeal, the assessee claimed trading loss of Rs.48,70,920/- and no explanation was furnished. So far as the reduction by the ld. CIT(A) to Rs.25 lakhs is concerned, the assessee did not prefer appeal before the higher forum and accepted the addition. Even otherwise, no explanation was furnished for the remaining addition. The minimum penalty @100% was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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