TIL INVESTMENTS P. LTD, MUMBAI vs ITO 7(3)(3), MUMBAI

Last updated: 30 November 2020

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The Income Tax Appellate Tribunal heard an appeal from Til Investments P. Ltd. concerning a penalty of Rs. 6,39,324 imposed under Section 271(1)(c) of the Income Tax Act. The penalty arose from the assessee claiming to set off speculation loss against income from fixed deposits, which the Assessing Officer deemed incorrect. Both the Assessing Officer and the Commissioner of Income Tax (Appeals) upheld the penalty, leading to the current appeal.

Court :
ITAT Mumbai

Brief :
The assessee has filed an appeal against the order of Commissioner of Income Tax (Appeals) -18, Mumbai, passed u/s 271(1)(c) and 250 of the Income Tax Act, 1961.None appeared on behalf of the assessee, we heard the submissions of Ld. DR and considered the material available on record. The assessee has raised the following grounds of appeal:

Citation :
ITA No. 4418/Mum/2018

IN THE INCOME TAX APPELLATE TRIBUNAL
“E” BENCH, MUMBAI
BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER &
SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER

ITA No. 4418/Mum/2018
(Assessment Years: 2005-06)

Til Investments P. Ltd.,
306, Jai Antarikash, Near
Thakar House, Makwana
Road, Andheri Kurla Road,
Andheri (E), Mumbai.

Vs.

ITO 7(3)(3)
Mumbai
PAN/GIR No. : AABCT4024F
Appellant) .Respondent)
Appellant by : None
Respondent by : Shri Amit Pratap Singh, DR

Date of Hearing 13/10/2020
Date of Pronouncement 14/10/2020

O R D E R

PER PAVAN KUMAR GADALE - JM:

The assessee has filed an appeal against the order of Commissioner of Income Tax (Appeals) -18,Mumbai, passed u/s 271(1)(c) and 250 of the IncomeTax Act, 1961.None appeared on behalf of theassessee, we heard the submissions of Ld. DR and considered the material available on record. The assessee has raised the following grounds of appeal:

1. The Ld. CIT(A) had erred in sustaining the penalty of Rs. 6,39,324/-.

2. The order of the Ld. CIT(A) is bad in law and on the facts of the case.

3. That we would be allowed to alter, amend or add fresh grounds of appeal at the time of hearing.

4. Appellant prays that the penalty be deleted.

2. The brief facts of the case are that the assesseecompany is engaged in the business of purchase and sale of shares and has income from sale of shares,dividend income and interest on fixed deposits. Theassessee company has filed the return of income forthe A.Y 2005-06 on 25.10.2005 with total loss of Rs.9, 10,224/-. But, the A.O considering thesubmissions and information on record passed order u/s 143(3) of the Act dated 24.07.2007 determining the total income of Rs10,07,986/-.Subsequently, theA.O has initiated penalty proceedings u/s 271(1)(c) ofthe Act. The assessee has filed explanations on 26.03.2012. Whereas, the A.O found that the assessee has claimed setoff of speculation loss against the income on fixed deposits. In theassessment proceedings income on fixed deposits was taxed and the speculation loss was allowed to be carry forward. The A.O found that the assessee has not given satisfactory explanations on the claim. The observations of the A.O are that the trading in shares is to be treated as speculation business and applied the provisions of the Sec. 73 of the Act and levied a penalty of Rs.6,39,324/- and passed order u/s 271(1)(c) of the Act dated 30.02.2012. Aggrieved by the penalty order the assessee has filed an appeal with the CIT(A). Whereas, the CIT(A)considered the grounds of appeal and submissions of the assessee but confirmed the penalty and dismissed the appeal of the assessee. Aggrieved by the order of the CIT(A) the assessee has filed an appeal with the Tribunal.

To know more in details find the attachment file

FAQ :

The main issue was the penalty of Rs. 6,39,324 imposed on Til Investments P. Ltd. for claiming to set off speculation loss against income from fixed deposits.

The penalty was initially imposed by the Assessing Officer (AO) under Section 271(1)(c) of the Income Tax Act.

The AO found that the assessee had claimed a set-off of speculation loss against income on fixed deposits, which was considered incorrect. The AO treated the trading in shares as a speculative business under Section 73 of the Act.

Yes, the Commissioner of Income Tax (Appeals) considered the assessee's grounds and submissions but confirmed the penalty and dismissed the appeal.

The Income Tax Appellate Tribunal heard the appeal, but no one appeared on behalf of the assessee. The Tribunal considered the submissions of the Departmental Representative and the available material.