Mere making a claim for set off of losses not furnishing inaccurate particulars of income – ITAT

Mere making a claim for set off of losses not furnishing inaccurate particulars of income as it was  personal opinion with regard to income-tax – ITAT

ABCAUS Case Law Citation:
ABCAUS 2646 (2018) (11) ITAT

Important Case Laws Cited/relied upon:
CIT Vs. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158

The instant appeal of the assessee was directed against the order of the Commissioner of Income Tax(Appeals) confirming the penalty levied by the Assessing Officer (AO) under section 271(1)(c) of the Income Tax Act, 1961 (the Act).

The assessee was a medical practitioner by profession. During the assessment years under consideration, he claimed set off of losses in share trading against the professional income.

The Assessing Officer, however, found that the transactions of purchase and sale of shares were speculative transactions without taking delivery of scrips. Accordingly he denied the benefir of set off and subsequently also imposed penalty u/s 271(1)(c) of the Act.  

The penalty was confirmed by the CIT(A).

Before the Tribunal the assessee submitted that he set off losses suffered in the share trading against other income and offered the net income for taxation. It was contended that mere claim of set off of losses while filing the return of income could not be construed to be either furnishing inaccurate particulars or concealing any part of income.

Therefore, according to the assessee, the CIT(Appeals) is not justified in confirming the orders of the Assessing Officer.

The Department supported the order of the CIT (Appeals). On a query from the Tribunal , the Department admitted that the assessee had furnished the entire details of share trading transactions including futures and options and claimed set off.

The question before the Tribunal was whether making of claim, namely, set off of losses suffered in share trading amounted to furnishing of inaccurate particulars of income or not?

The Tribunal observed that as per the provisions of Section 271(1)(c) of the Act, the Assessing Officer may levy penalty if he is satisfied that the assessee has concealed particulars of income or furnished inaccurate particulars of such income.

The Tribunal noted that the assessee had furnished the entire transaction details before the Assessing Officer. The assessee claimed that the loss suffered in share trading had to be set off against the other income.

It was not the case of the Revenue that the assessee had concealed any part of income. The claim of the Department was that making the claim of set off in respect of losses suffered in share trading amounts to furnishing inaccurate particulars of income.

The Tribunal noted that this issue was considered by the Hon’ble Supreme Court. The Apex Court found that after furnishing entire details, making a claim in the return of income does not amount to furnishing inaccurate particulars or concealing any part of income.

The Tribunal opined that if the assessee makes a claim after furnishing entire details, it is his personal opinion with regard to income-tax. There may be difference of opinion with regard to nature of transactions by the assessee at one end and opinion of Department at other end. This difference of opinion with regard to nature of transaction cannot be construed as furnishing inaccurate particulars of income as found by the Apex Court.

Accordingly, the Tribunal set aside the orders of both the authorities below and deleted the penalty levied.

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