ITAT Confirms Penalty on Bogus Claim of Short Term Capital Loss

In this case, the assessee had made the bogus claim of short-term capital loss in the return of income. When, after due investigation, the same was detected by the Ld. Assessing Officer during the course of assessment proceedings, the assessee filed revised computation and requested that the short-term capital loss may be treated as a “speculative loss”. No reason for this revised stand/position was given by the assessee.

The Ld. Assessing Officer confirmed additions in respect of this bogus short-term capital loss and the assessee did not file an appeal against the above addition in quantum proceedings.

ITAT held that the Ld. CIT(Appeals) has correctly pointed out that it is only when the incorrect claim of bogus short-term capital loss was detected by the Ld. Assessing Officer that the assessee offered to pay tax in respect of the same. Accordingly, the Ld. CIT(Appeals) confirmed the penalty under section 271(1)(c) of the Income Tax Act imposed by the Ld. Assessing Officer.

In the considered view of ITAT, there is no infirmity in the order passed by the Ld. CIT(Appeals) and the Tribunal confirmed the penalty u/s 271(1)(c) of the Act in the instant facts.