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TMI Blog2017 (9) TMI 1801X X X X Extracts X X X X X X X X Extracts X X X X ..... ) could not be levied. Where the explanation is bonafide and all the facts relating to the same have been disclosed then there is no case of levy of penalty. The findings recorded in the assessment order is not conclusive for deciding the imposition of penalty as it has only a persuasive value and non filing of appeal against the said disallowance does not mean that the penalty has to be imposed automatically. It is trite law that penalty proceedings are distinct and separate proceedings from assessment proceedings. It is settled law that when the issue is debatable, then the provisions of penalty u/s 271(1)(c ) is not attracted, because mensrea is not established against the assessee. - Decided in favour of assessee. - I.T.A. No.496/I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and accordingly held to be treated as speculative transactions and therefore the loss so claimed was treated as speculative loss on which penalty proceedings u/s 271(1)(c ) of the Act were separately initiated. Accordingly notice u/s 274 read with section 271(1)(c ) was issued on 29.12.2011, further notice dated 30.05.2012 was served on the assessee on 06.06.2012 which was replied by the assessee on 28.06.2012. The submissions made by the assessee are reproduced in the penalty order by the AO and after considering the same the AO was of the view that the contention of the assessee that the transactions were of speculative nature is not correct therefore the assessee has claimed wrong deduction on account of business loss which is not allowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subsequent year against the derivative profits. However, the AO has not verified whether the penalty levied on account of concealment or on furnishing of in accurate particulars. The assessee has neither concealed any income nor have furnished any inaccurate particulars of income, the treatment of transactions which is a matter of interpretation of Section 43(5) of the Act and is debatable so far as applicability of provision of section 43(5) of the Act, there being difference of opinion, no penalty u/s 271(1)(c ) of the Act could be levied, when there was full and true disclosure of entire facts and such a disclosure of entire facts and was also supported and explained by the documentary evidence. The Ld. Counsel has also placed relian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal. Similarly the Ld. Counsel further relied in the case of CIT v Oscar Udyog Ltd (2014) 42 Taxmann.com 258 (Kar) wherein the claim made by the assessee u/s 80I was legal and valid. Subject to verification, therefore, it cannot be said that the assessee deliberately claimed deduction and that there was dishonest and intention in the part of the assesee for claiming deduction and thus penalty could not be imposed for the same. At last the Ld. Counsel placed reliance on the decision of Hon ble Supreme Court in the case of CIT v Reliance Petro Products Pvt. Ltd (2010) 322 ITR 158 (SC) wherein it was held that mere making of a claim which is not sustainable in law, will not amounting to furnishing inaccurate particulars of income. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not mean that the penalty has to be imposed automatically. It is trite law that penalty proceedings are distinct and separate proceedings from assessment proceedings. It is settled law that when the issue is debatable, then the provisions of penalty u/s 271(1)(c ) is not attracted, because mensera is not established against the assessee. 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 treated loss from derivative transaction as normal business loss, whereas the AO during the assessment proceedings treated the same as speculative nature and disallowed the same and consequently initiated penalty proceedings u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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