TaxTMI 
TaxTMI 
2017 (9) TMI 1801
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....e appeal was not preferred against the assessment order but there was difference of opinion due to interpretation of the provisions of Section 43(5) of the Act, hence these are being considered together. 3. Short facts of the case are that the assessee has filed return of income on 24.09.2009 disclosing total income of Rs. 81,01,060/- which was assessed to Rs. 98,05,880/- on 29.12.11 by disallowing the claim of loss of Rs. 16,44,817/- on forward booking of oil contract which was in the nature of business loss. However, the AO was of the view that the assessee had entered into the contract of oil in the month of July, 2008 and March, 2009 and there was profit in such forward booking contract in July, 2008 whereas loss has occurred in March,....
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....herefore there was no question of any two views on such issue, hence the AO was correct in levy of penalty on account of false exemptions/deduction claimed in the computation of income. 5. Being aggrieved the assessee filed this appeal before us. The Ld. Counsel for the assessee submitted that the loss in respect of trading of commodity exchange was business loss but it was held to be speculative loss within the meaning of section 43(5) of the Income Tax Act by the AO, because some of the transactions were intra day transactions, however, while passing the assessment order the AO did not doubt the genuineness of the transactions but treated it to be a speculative transactions and allowed the carry forward of loss to be allowed in the subse....
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....se for levying penalty u/s 271(1)(c ). The Ld.AR further relied in the case of CIT V Aurica Investment and Securities Ltd (2009) 310 ITR 121 (Del) wherein it was held that all the requisite information required by the AO were furnished by the assessee and there was nothing on record to show that in furnishing its return of income the assessee has not concealed his income or has furnished any particulars of income. The mere treatment of the business loss as a speculation loss by the AO does not automatically warrant any concealment of income and particulars. Similarly in the case of CIT V Navinchandra & Co. (2014) 42 Taxmann.com 28 (Guj) it was held that where the assessee treated the loss from derivative transactions as normal business loss....
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....loss claimed was disallowed by the A.O and treating the same as speculative transaction u/s 43(5) of the Act. Thus, the perusal of the assessment order reveals that the AO has made disallowance of speculation loss on the basis of facts as disclosed by the assessee in the return of income and also during the assessment proceedings. We find that the assessee has furnished all relevant facts and merely because the AO has changed the head of loss from business loss to speculative loss and allowed to carry forward of the same the penalty u/s 271(1)(c ) 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 ....
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....ion is squarely applicable in the case of the assessee. Further, the assessee has relied in the case of Jagdish R. Acharya v CIT 160/(Ahd)/2013, Co-ordinate Bench of Ahmadabad Tribunal, wherein the explanation offered regarding speculation loss was found to be only the change of income from one head to another head and where the assessee has disclosed all the material fact and the penalty u/s 271(1)(C ) of the Act was not to be levied. Similarly decisions of Hon'ble Delhi High Court in the case of CIT V Aurica Investment & Securities Ltd (supra) and CIT V Oscar Udyog Ltd of Hon'ble Court of Karnataka (supra) also supports the case of the assessee. The assessee has also relied in the case of CIT v SPIC Stech Pvt. Ltd (2004) 32 ITC 244 (MP) w....