2014 (9) TMI 1083

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... (Accountant Member) This is an appeal filed by the assessee is directed against the order of ld. CIT(A) -10, Mumbai dated 14-12-2012 for the A.Y. 2007-08 in the matter of order passed u/s 271(1)(c) of the Income Tax Act, 1961. 2. In this appeal, the assessee is aggrieved for the levy of penalty of Rs. 5,05,474/- imposed by the A.O. 3. The facts in brief are that during the relevant asses....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....idered the rival contentions and found from the records that derivative transactions carried out in a recognized stock exchange were ultimately settled out otherwise than by the actual delivery or transfer of scrip. The profit/loss from trading in derivative transactions is considered as business income and not speculative transaction. NCDEX and MCX are also exchanges for trading in commodities an....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... Counsel for the assessee placed reliance on the decision of coordinate Bench of this Tribunal in the case of ACIT vs. Arnav Akshay Mehta, 53 SOT 581 (Mumbai) wherein it was held that assessee's derivative trading through MCX stock exchange in the A.Y. 2007-08 is non-speculation transaction and, therefore, loss incurred is to be treated as normal business loss. The Bench also observed that transa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... u/s 271(1)(c) of the Act. It was held that penalty u/s 271(1)(c) was not leviable where the addition was made on account of treatment of business loss as speculation loss. The Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproducts (P) Ltd., 322 ITR 158 (SC) also observed that mere making of the claim, which is not sustainable in law, by itself will not amount to furnishing inaccurate....