TMI Blog2019 (8) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has not done any business during the year under consideration and the said finding of fact has attained finality. Decision of Hon ble Supreme Court in the case of Raj Dadarkar Associates v. ACIT [ 2017 (5) TMI 586 - SUPREME COURT] which elaborately discussed the chargeability of income to tax under the head Income from House Property also rebut the aforesaid contention of the assessee that letting out of the commercial office is business of the assessee. The assessee was fully aware that there was no business conducted by it during the entire previous year and its expenses as well deprecation on assets can neither be allowed as business deduction nor it can be allowed as set off against other incomes. the claim for set off as set out by assessee by setting off business expenses and depreciation against Income from House Property was non-genuine act of the assessee which lacked bonafide which was undertaken to reduce tax-liability and was rightly held against assessee in quantum by all the three authorities upto ITAT , concurrently. Under these circumstances and factual matrix of the case , we are not inclined to interfere with the well reasoned appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pport of its claim. 4. On facts in circumstances of the case and in law the CIT (A) erred in rejecting the assessee's submissions for non levy of penalty based on the authorities of various legal decisions of Hon'ble High Courts and Hon'ble Supreme Court. 5. The Ld. CIT(A)'s order in support of penalty is erroneous and contrary to the law as the said order is in gross violation of principles of natural justice. 6. On facts in circumstances of the case the Ld, CIT (A) should have set aside the penalty u/s 271(1)(c). 7. The Appellant craves leave to add/amend/alter and modify the grounds of appeal as it may be advised. 3. Before we proceed further, it is pertinent to mention at this stage itself that in this case several hearings have taken place Before ITAT, Mumbai Benches, Mumbai since 18th September 2018 when this appeal filed by the assessee was first listed for hearing, wherein the assessee is consistently not appearing before the Tribunal. The appeal was fixed for hearing before the Bench on 18.09.2018 , then on 18.10.2018 , 26.11.2018 , 08.01.2019 and 03.04.2019, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t income from house property, as there was no business activity conducted by the assessee during the year under consideration and hence as per the AO , the business losses and un-absorbed depreciation cannot be set off against income from house property , which set off was ultimately denied by the AO vide assessment order dated 26.11.2012 passed by the AO u/s 143(3) of the 1961 Act. 5. The matter in quantum against assessment framed by the AO went up to ITAT, Mumbai. The tribunal in ITA no. 48/Mum/2014 and CO No. 46/Mum/2015 , vide common order dated 04.02.2016 was pleased to hold that the assessee did not carry out on any business during the year under consideration and hence set off of current year business loss as well brought forward loss did not arise by holding as under: 10. With regard to the determination of the business income, the ld. CIT(A) has held that the assessee did not carry on any business and hence the question of setting off of current year as well as brought forward losses of the assessee does not arise. We notice that the said decision of the ld. CIT(A) is in accordance with law. Hence, we do not find any reason to interfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions appended to section 271(1)(c) of the Act entirely indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing return. The object behind enactment of section 271(1)(c) read with the Explanations indicates that the section has been enacted to provide for a remedy for loss of revenue. The penalty under that provision is a civil liability. Willful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under section 276C of the Act. During the proceedings before me, the appellant has taken an argument that claim of business loss and unabsorbed depreciation setoff was fully and truly disclosed in the return of income and the accompanying documents. It has further been argued that these details were filed during the assessment proceedings. The said argument of the appellant is liable to be rejected in view of the decision of the Hon'ble Delhi High Court in the case of Commissioner of Income-tax v. Escorts Finance Ltd. 328 ITR 44, whereby it has been held that merely because information was available in the tax audit report that would not absolve the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above rent for the period from June 2009 to March 2010 with respect to its office unit No. 8, admeasuring 5000 sft. built up area on 2nd Floor, C-Wing, Laxmi Towers at Bandra Kurla Complex, Mumbai. The said property is the only property held by the assessee and this property had remained vacant for 2 months viz. April and May 2009. The AO adopted fair market value u/s 23(1)(a) of ₹ 82,62,000/- for previous year relevant to impugned assessment year with respect to aforesaid property to compute income under the head Income from House Property . However, the fact remains that the income was offered to tax by assessee under the head Income from House Property which was also assessed by the authorities below under the head Income from House Property . The assessee did not had any other source of income during previous year relevant to impugned assessment year. The assessee did not had any business activities during the year under consideration. We have observed that the assessee has sought to set off business losses to the tune of ₹ 19,71,729/- and unabsorbed deprecation to the tune of ₹ 13,325,259/- against the aforesaid Income from house propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against other incomes. Provisions of Section 37(1) and Section 32 are unambiguous on this aspect which requires business user, and relevant provisions are extracted below: 32. (1) [In respect of depreciation of- (i) buildings, machinery, plant or furniture, being tangible assets; (ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998, owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed-] *** *** *** (Emphasis supplied by us) 37. (1) Any expenditure (not being expenditure of the nature described in sections 30 to 36 [***] and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head Profits and gains of business o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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