2011 (4) TMI 1341

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....so trading in shares. The assessee has earned a profit of Rs. 10,30,450/- on account of trading in computer software while it incurred a trading loss of Rs. 3,97,38,050/- on account of trading in shares. According to Explanation appended to Section 73 of the Income-tax Act, the loss in trading in shares is to be deemed as speculation loss. In the quantum proceedings, the assessee's claim of business loss and trading in shares were disallowed and the same was treated as speculation loss and in respect of such disallowance, penalty proceedings were initiated u/s 271(1)(c) of the Act. The claim of the assessee is that the assessee never concealed any income nor has furnished any inaccurate particulars of income and disallowance has been mad....

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....assessee had claimed loss from trading of shares and furnished all the relevant materials. The AO treated the said loss under Explanation to section 73 as deemed speculation loss and levied penalty u/s 271(1)(c). The Commissioner (Appeals) cancelled the said penalty holding that the assessee had disclosed all the material facts and it was only under deeming provisions that the loss was to be treated as speculative loss. The Commissioner (Appeals) had cancelled the penalty after considering the facts on merit of the case. He had not cancelled the penalty on the ground of 'wilful' concealment or on the ground of 'mens rea'. Thus, it was opined that the instant case was a simple case of fighting in between duty & rights which automatically did....