IN THE HIGH COURT OF DELHI AT NEW DELHI 
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  20.08.2009 
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 Present:        Ms. Rashmi Chopra, Advocate for the appellant. 
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 + I.T.A. No. 778/2009 
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 The penalty proceedings initiated against the respondent- 
 assessee resulted in imposition of penalty under Section 271(1)(c) of the Income 
 Tax Act have been set aside by the CIT(A) as well as by the I.T.A.T.  The 
 assessee had claimed loss of sale of shares as trading loss in its return.  The 
 Assessing Officer, however, treated it to be a speculative loss and not the 
 trading loss and while making the assessment order the Assessing Officer also 
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 supported the penalty proceedings as stated above.  The CIT(A) as well as the 
 Tribunal returned the finding that the claim made by the assessee, on the 
 aforesaid account was a wrong scheme but cannot be treated as a false claim as 
 is clear from the order of the I.T.A.T.: 
 ?5.        It is clear from the facts narrated above that the assessee 
 had undertaken delivery-based share transactions, leading to loss of 
 Rs.30,68,331/-.  It is not the case of the revenue that the loss was bogus or 
 the transactions were bogus.  The provision contained in the Explanation to 
 section 73 was invoked to hold the loss to be speculation loss.  This finding 
 has been upheld by the Tribunal.  However, whether dealing in shares in case of 
 a company, leading to loss, will result into business loss or speculation loss, 
 is a controversial matter and elaborate tests have been laid down to decide the 
 issue in different contexts in different case laws.  Therefore, making a claim 
 of the loss as business loss does not per se lead to the conclusion that any 
 false claim was made.  In our view, such a claim may be a wrong claim, but the 
 same is not a false claim.  In any case, the transactions were truly disclosed 
 and there is no adverse finding by the lower authorities in assessment order or 
 in penalty order in this behalf.  In view thereof, we tend to agree with the 
 learned CIT(A) that this is not a fit case for levy of penalty, as no inaccurate 
 particular of income was furnished.? 
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 We are of the opinion that no substantial question of law arises. 
 Dismissed. 
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 A.K.SIKRI, J 
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 VALMIKI J.MEHTA, J 
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 August 20, 2009 
 Ne 
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