Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (1) TMI 365 - AT - Income TaxPenalty u/s.271(1)(c) - undisclosed long term capital gains and expenditure - Held that - In this case, consequent to search /survey action in the case of M/s. Rajarathinam Constructions P. Ltd, the documents relating to the purchase of property by assessee was found and it came to know that M/s. Rajarathinam Constructions P. Ltd purchased land located at Perumbakkam village for ₹ 6,75,000/- from assessee. However, the assessee had not admitted long term capital gains in respect of sale of property even after issuance of notice u/s.148 of the Act. The assessee made a wrong claim towards dealers commission at ₹ 5,16,650/- and marketing expenses of ₹ 2,98,450/- respectively for which no new evidence was produced. This quantum addition was subject matter of appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) allowed the expenditure at ₹ 7,00,000/-. However, the findings on this addition was confirmed by Commissioner of Income Tax (Appeals) in its entirety. Admittedly, the assessee was not able to substantiate the claim made by her. However, the Assessing Officer while computing the penalty considered entire disallowance of ₹ 8,15,000/- though at this stage addition was sustained was only ₹ 2,15,000/-. To that extent the assessee shall get relief. In other words, in view of the failure on the part of the assessee to substantiate the expenditure of ₹ 2,15,000/- towards dealers commission and marketing expenses penalty to be levied u/s.271(1) (c) of the Act as there is no bonafide explanation from the assessee to this effect and there is furnishing of inaccurate particulars of income. Accordingly, we direct the Assessing Officer to recompute the penalty u/s.271(1)(c) of the Act towards the additions sustained at ₹ 2,15,000/- only. - Decided partly in favour of assessee
Issues:
Levy of penalty u/s.271(1)(c) of the Income Tax Act for inaccurate particulars of income and wrong claims towards expenses. Analysis: 1. The appeal was against the order confirming the penalty u/s.271(1)(c) for the assessment year 2007-08. The assessee claimed expenses on dealer's commission and marketing, but failed to provide proper explanations for the same. 2. The case stemmed from a survey/search revealing the sale of land by the assessee to a construction company. The Assessing Officer disallowed a portion of the claimed expenses, which was upheld by the CIT(A). 3. The CIT(A) observed that the assessee failed to substantiate the claimed expenses, leading to inaccurate particulars of income and concealment of income. The penalty was upheld due to lack of genuine evidence supporting the expenditure claims. 4. The Tribunal noted that the assessee could not prove the expenses claimed, resulting in inaccurate income particulars. The penalty was directed to be recomputed based on the sustained addition of expenses, reducing the penalty amount significantly. 5. Ultimately, the appeal was partly allowed, with the penalty to be levied only on the sustained addition amount. The decision was pronounced on 20.11.2015.
|