Case Law Details
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
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