Itxa/657/2011 Of The Commissioner Of Income Tax--8 v. M/S. Steecon Plastopack Pvt Ltd

sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.657 OF 2011 The Commissioner of Income Tax-8, Mumbai ..Appellant. V/s. M/s. Steecon Plastopack Pvt. Ltd. ..Respondent. Mr. Suresh Kumar for the appellant.None for the respondent. CORAM : J.P. DEVADHAR AND A.R. JOSHI, JJ. DATED : 19TH JANUARY, 2012 P.C. :- 1.Whether the ITAT was justified in deleting the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961 ('the Act' for short), is the question raised in this appeal. 2.The assessment year involved herein is AY 2001-02. 3.The assessee is engaged in the business of sale of woven sacks & share trading activities. In the assessment year in question, the assessee had claimed set off of the business loss incurred by the 4.The assessing officer was of the opinion that the business loss incurred by the assessee was in fact speculation loss which could not be set off against business income. The assessing officer after making disallowances of the loss, initiated penalty proceedings and imposed penalty under Section 271(1)(c) of the Act. The appeal filed by the assessee against the penalty order was dismissed by CIT(A). 4.On further appeal filed by the assessee, the ITAT deleted the penalty on the ground that when the assessee himself has categorised the entire loss into two categories, namely, loss on account of share trading on actual delivery basis and loss on account of speculative transactions, then, in the absence of any suppression of loss incurred, it cannot be said that the assessee has concealed income or furnished inaccurate particulars of income. The Tribunal by relying on the decision of the Apex Court in the case of Reliance Petro Chemicals Product Ltd. reported in 322 I.T.R. 158 has held that even if incorrect loss on account of speculative transactions is computed by the assessee, that cannot be a ground to levy penalty under Section 271(1)(c) of the Act. ITAT and the same is in consonance with the law laid down by the Apex Court. 7.In the result, we see no merit in the appeal and the same is hereby dismissed with no order as to costs. (A.R. JOSHI, J.) (J.P. DEVADHAR, J.)