TMI Blog2010 (3) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of inaccurate particulars, no penalty is leviable under section 271(1)(c) of the Income-tax Act. - Thus appeal of the assessee is allowed. - ITA NO. 4435 (DELHI) OF 2009 - - - Dated:- 31-3-2010 - SHRI VIMAL GANDHI, AND SHRI R.C. SHARMA, JJ. Represented By: Shri Ashwani Taneja and Ms. Rani Kiyala for the Appellant. Shri Ashok Mittal for the Respondent. R.C. Sharma, Accountant Member This is an appeal filed by the assessee against the order of the Commissioner of Income-tax (Appeals) dated October 29, 2009, for the assessment year 1994-95, in the matter of imposition of penalty under section 271(1)(c) of the Income-tax Act, 1961. 2. The rival contentions have been heard and the record perused. The fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horised representative that the assessee has disclosed all the particulars relating to his income and claim of set-off of business loss against the capital gain arose on the sale of business assets. In the return of income, there was also a director's report disclosing the fact of sale of building and utilisation of the amount for the purpose of business. According to the learned authorised representative, there was a bona fide disclosure of all the particulars and mere denial of the assessee's claim of set-off will not attract the penal provisions as contained under section 271(1)(c). He placed reliance on the recent decision of the Supreme Court dated March 17, 2010 in the case of CIT v. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oad, and the same stands disallowed, it cannot be said that the assessee claimed the deduction of expenditure in order to evade tax liability and, therefore, penalty under section 271(1)(c) is not leviable. It was also observed by the Hon'ble High Court that since the facts relating to the claim were duly disclosed in the return, there is no concealment of particulars of income, therefore mere rejection of the claim of expenditure will not attract levy of penalty under section 271(1)(c) of the Income-tax Act. 4. On the other hand, the learned Departmental representative contended that the assessee has filed a wrong claim which is not permissible under the provisions of section 71 nor section 72 of the Act, therefore the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P.) Ltd. (supra) while confirming the order of the Hon'ble High Court deleting the penalty imposed under section 271(1)(c) for denial of the assessee's claim of deduction of interest expenditure, has categorically observed that (page 164) "By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars". Accordingly, it was held that decline of the assessee's claim of interest against the loan utilised for making investment in tax-free securities, will not amount to furnishing of inaccurate particulars so as to attract penalty under section 271(1)(c) of the Act. The Supreme Court in this case after considering the proposition of law laid down in the case of Dilip N. Shroff v. Joint CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om brokerage and other income against which it had claimed share trading loss, the Assessing Officer found that loss was speculative in nature and could not be adjusted against the assessee's normal income, accordingly the Assessing Officer held that the assessee has furnished inaccurate particulars of income to the extent of making a wrong claim of share trading loss against the normal income and imposed penalty under section 271(1)(c) of the Act. The Hon'ble High Court held that mere treatment of business loss as a speculation loss by the Assessing Officer did not automatically warrant inference of concealment of income, accordingly penalty was not leviable. 7. Recently, the Hon'ble jurisdictional High Court in the case of Shahabad Co-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by observing that the entire facts have been disclosed by the assessee in the documents filed along with the return and the mistake has been committed by counsel of the assessee for such wrong claim. There was no scope for concealing any income or furnishing of inaccurate particulars of income. While countering the Department's contention that even if the claim for set-off of capital loss against profit of business was by the negligence or by mistake, the fact remains that the particulars of income furnished were not correct and wilful concealment not being an essential requirement for levy of penalty under section 271(1)(c) of the Income-tax Act, as held by the Hon'ble Supreme Court in the case of Dharamendra Textile Processors (supra), th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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