AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (2) TMI 1235
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....lenged the action of the ld. CIT(Appeals) in cancelling the penalty of Rs. 45,23,466/- imposed by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961. 3. The assessee in the present case is a Company, which during the year under consideration derived income from Leasing of Land, Plant & Machinery and Premises. The return of income for the year under consideration was filed by it on 24.10.2007 declaring total income of Rs. 50,02,709/-. A search and seizure action under section 132 was conducted in the case of the asessee and pursuant to the same, a notice under section 153A was issued by the Assessing Officer on 26.04.2010. In response to the said notice, the return of income for the year under consideration was filed....
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....s made by the assessee as well as the material available on record, the ld. CIT(Appeals) cancelled the penalty imposed by the Assessing Officer under section 271(1)(c) for the following reasons given in paragraph no. 6 of his impugned order:- "6. I have considered the submission of the appellant and perused the assessment order as well as the penalty order. I have also gone through the appeal order against the quantum appeal and the judicial decisions relied upon by the appellant. The facts of the case which resulted into treating the share trading loss as deemed speculation loss within the meaning of Explanation below section 73 or the treatment of share trading loss as bogus loss by the AO and the reasons for imposition of penalty u/s 2....
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.... on account of share trading loss which was alleged to be bogus and also otherwise not allowable as non-speculative loss within the meaning of Explanation below section 73 of the Act. On careful consideration of the facts, I am of the opinion that the share trading loss incurred by the appellant company cannot be treated as bogus loss because if the appellant company would have not made purchase of shares, the same could have not been sold through stock exchange through the registered broker. The AO has not doubted the sale of shares and the copies of sale bills/contact notes were submitted before him. The question remained that as to whether treatment of share trading loss as deemed speculation loss as per the Explanation below section 73 ....
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....rd. As submitted by the ld. counsel for the assessee, the Tribunal vide its order dated 02.03.2016 passed in ITA Nos. 657 & 750/KOL/2012 has already accepted the genuineness of share trading loss shown by the assesese by upholding the finding recorded by the ld. CIT(Appeals) that the same cannot be regarded as a bogus loss. By the said order, the Tribunal, however, has upheld the order of the ld. CIT(Appeals) passed in the quantum proceedings whereby he confirmed the action of the Assessing Officer in treating the said share trading loss as deemed speculation loss as per Explanation to Section 73 of the Act and consequently not entitled for set off against other income of nonspeculative nature and the question that requires our consideratio....
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....ve nature by invoking the Explanation to section 73. The Assessing Officer also imposed penalty under section 271(1)(c) on the ground that the assessee had furnished inaccurate particulars of income to the extent of making a wrong claim for set off of share trading loss against normal income. Hon'ble Delhi High Court, however, held that the penalty imposed by the Assessing Officer under section 271(1)(c) was not sustainable as mere treatment of business loss as speculation loss by the Assessing Officer did not automatically warrant inference of concealment of income and there was nothing on record to show that in furnishing its return of income, the assessee had either concealed its income or had furnished any inaccurate particulars of inco....