9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (1) TMI 792 - AT - Income TaxPenalty u/s 271(1)(c) - ALV of the Flat Nos. 502 and 203 at Kent Estate - Held that - The claim of the assessee that it was using the Flats No. 203 and 502 for its business purposes had not been disproved therefore no penalty under Sec. 271(1)(c) on the said count could have been validly imposed in its hands on the said count. We thus in the backdrop of our aforesaid observations delete the penalty imposed by the A.O and sustained by the CIT(A). - Decided in favour of assessee. Penalty imposed u/s 271(1)(c) in the hands of the assessee as regards the suppressed contract receipts - Held that - now when the assessee in the backdrop of the aforesaid facts was in actual receipt of an amount of Rs. 2, 50, 000/- from its aforesaid client viz. M/s Siddhivinayak Construction Co. and had also claimed the credit as regards the TDS corresponding to the said amount only therefore the bonafides of the assessee as regards not accounting for the contract receipts of Rs. 4 lac stands duly established. We thus are of the considered view that as the bonafides of the explanation of the assessee as regards not accounting for the amount of Rs. 4 lac stands proved therefore saddling the assessee with penalty under Sec. 271(1)(c) as regards the said amount would not be justified. We thus for the aforesaid reasons vacate the penalty imposed by the A.O under Sc. 271(1)(c) in the hands of the assessee as regards the suppressed contract receipts of Rs. 4 lac. The Ground of appeal is allowed in favour of assessee.
Issues Involved:
1. Penalty under Sec. 271(1)(c) for addition of Rs. 4,44,382/- as income from house property. 2. Penalty under Sec. 271(1)(c) for addition of Rs. 4,00,000/- towards suppressed contract receipts. Detailed Analysis: Issue 1: Penalty for Addition as Income from House Property 1. Facts and Arguments: - The assessee disclosed ownership of certain properties in its balance sheet but did not offer any income from these properties. - The properties included Shop Nos. 3, 4, 5, 6, 7 in God’s Gift Cooperative Housing Society and Flat Nos. 203 and 502 at Kent Estate. - The assessee claimed that the shops were used as a godown due to a dispute with the society and the flats were used for business purposes. 2. Assessment and CIT(A) Findings: - The A.O. did not accept the explanation and added Rs. 4,44,382/- as income from house property. - The CIT(A) upheld the penalty imposed by the A.O. 3. Tribunal’s Findings: - The assessee disclosed the properties in its balance sheet, indicating no concealment. - The Tribunal referred to the letter from the society refusing to enroll the assessee as a member, supporting the claim that the shops were not in possession. - Citing the Gujarat High Court's decision in Commissioner of Income-tax vs. Gaekwad & Co., the Tribunal held that if the assessee cannot exercise ownership rights, the income cannot be taxed. - The claim that the flats were used for business purposes was unproved but not disproved, aligning with the Bombay High Court's decision in CIT Vs. Upendra V. Mithani, which states no penalty can be imposed if the explanation is unproved but not disproved. 4. Conclusion: - The Tribunal deleted the penalty for the addition of Rs. 4,44,382/- as income from house property, finding the assessee’s explanation plausible and not disproved. Issue 2: Penalty for Addition Towards Suppressed Contract Receipts 1. Facts and Arguments: - The assessee received Rs. 6,50,000/- from M/s Siddhivinayak Construction but accounted for only Rs. 2,50,000/- due to a payment dispute. - The assessee claimed that the client agreed to pay only Rs. 2,50,000/-, and the remaining Rs. 4,00,000/- was written back in the subsequent financial year. 2. Assessment and CIT(A) Findings: - The A.O. added Rs. 4,00,000/- to the income, stating the assessee should have recognized the income when the bill was raised. - The CIT(A) upheld the penalty imposed by the A.O. 3. Tribunal’s Findings: - The Tribunal examined the ledger account and found that the client had written back Rs. 4,00,000/- in the subsequent financial year. - The Tribunal acknowledged that the assessee claimed TDS credit only for the received amount of Rs. 2,50,000/-. - The Tribunal concluded that the assessee’s explanation regarding the non-receipt of Rs. 4,00,000/- was bona fide and supported by evidence. 4. Conclusion: - The Tribunal vacated the penalty for the addition of Rs. 4,00,000/- towards suppressed contract receipts, finding the assessee’s explanation credible and substantiated. Final Order: - The Tribunal allowed the appeal, deleting the penalties imposed under Sec. 271(1)(c) for both the addition of Rs. 4,44,382/- as income from house property and the addition of Rs. 4,00,000/- towards suppressed contract receipts. The Ground of appeal No. 4 was dismissed as not pressed. The order was pronounced in the open court on 08/01/2018.
|
