2007 (7) TMI 276

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....der Section 271(1)(c) of the Income Tax Act, 1961 (for short as 'the Act'). 2. Aggrieved with the order passed by the Tribunal, the Revenue has filed the present appeal. 3. The Assessee in the present case filed its return on 31st October, 2001 declaring a loss of Rs.23,05,096/-. The return was selected for scrutiny and assessment was made at the loss of Rs.85,259/-. During the assessment proceedings, the Assessing Officer found that the loss claimed by the Assessee was speculative in nature which could be allowed to be adjusted against speculative income only and as the income was assessed at a loss, the loss shown by the Assessee could not be adjusted, therefore, the Assessing Officer initiated penalty proceedings under Section 271(1)(c....

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.......... (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, or............... he may direct that such person shall pay by way of penalty,-.............." 8. The Provisions of this section are attracted where in the course of any proceedings under the Act, the Assessing Officer or the first appellate authority is satisfied that any person has concealed the particulars of his income or has furnished inaccurate particulars of such income. 9. As per order passed under Section 271(1)(c) of the Act, it has been stated by the Assessing Officer that: "The Assessee in its return of income has claimed an amount of Rs.22,15,837/- in its profit and loss account on account of share trading loss and has....

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..... The Assessee, vide his reply dated 18th November, 2002, submitted that- "The Assessee as a prudent stock broker has to meet out his commitments in respect of orders received on telephone and without receiving any money. If market price of these shares got reduced, those clients sometimes do not turn up to take delivery of these shares. The Assessee therefore sell these shares at the prevailing market rates in order to avoid any further loss. Such transactions, therefore, take the shape of a jobbing transaction as it is a self trading transaction." 12. Vide letter dated 15th January, 2004 the Assessee was intimated that no detailed evidence has been furnished and he was required to furnish the complete details with evidence of purchase a....