Whether section 94 is attracted and penalty is justified when assessee sets off the loss on sale of its mutual fund units against profit on short term investments but does not claim the loss as a deduction
Merck Ltd Vs ACIT (ITAT Mumbai) – Provisions of sec. 94 are very much clear and it cannot be said that there is any ambiguity in the provisions and therefore, appellant should not have claimed the aforesaid loss knowing fully well that the provisions of sec. 94 are applicable to such transactions. Appellant has adjusted the aforesaid loss against the profit on sale of short term capital gains which is illegal. Appellant being a reputed company, advised by reputed and learned counsels for the past many years cannot be said to be not aware of the said provisions of the Act. For the above reasons, appellant’s submissions on this issue are rejected and it is held that AO is right in levying penalty u/s 271(1) and holding that the appellant has furnished inaccurate particulars of its income. – Assessee’s appeal partly allowed.
INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH ‘B’ MUMBAI
ITA No. 916/Mum/2008
Assessment year- 2002-03
M/s. Merck Ltd., Vs ACIT
ORDER
ASHA VIJAYARAGHAVAN
This appeal preferred by the assessee is directed against the order dated 23.11.2007 passed by the ld. CIT(A)-XXVI for the Assessment Year 2002-03.
2. The assessee had filed its Return of income on 28th October, 2002 declaring total income of Rs 55,08,96,440/- and thereafter revised the return of income on 5th December, 2002 declaring total income of Rs. 55,21,49,160/-. The assessment was completed thereafter u/s 143(3) of the Act, making certain additions.
3. Aggrieved by the various additions/ dis allowances made by the AO, assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) passed the appellate order and allowed the reliefs in respect of certain items of additions and dis allowances and upheld the assessment order in respect of certain other items.
4. The assessee filed an appeal before the ITAT against the order of the Ld. CIT(A) and Tribunal has disposed off the same vide order dated 6.10.2009.
5. The AO has levied penalty at the rate of 100% on income sought to be evaded by the assessee in respect of the following items:
