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2021 (10) TMI 214 - AT - Income TaxPenalty levied u/s 271(1))(c) - Characterization of receipts - correct head of income - assessee had sought to evade taxes by offering the rental receipts in its original return of income under a wrong head of income i.e ‘house property’ as against ‘business income’- HELD THAT:- As assessee had validly filed a revised return of income, therefore, there was no justification on the part of the A.O to have brushed aside the same and saddled the assessee with the rigors of penalty u/s 271(1)(c) of the Act. Be that as it may, in our considered view a mere dislodging of the assessee’s claim and re-characterization of the head of income under which the rental receipts were to be brought to tax can by no means justify levy of penalty u/s 271(1)(c) - it is a matter of fact to which we cannot be oblivion i.e the assessee had duly disclosed the rental receipts in question in its original return of income. It is not even the case of the revenue that there is any suppression of the rental receipts by the assessee in its original return of income. Apropos, the claim of the revenue that the assessee had sought to suppress its true income by offering the rental receipts under the head ‘house property’ as against ‘business income’, we are of a strong conviction that the said unsubstantiated allegation cannot justify levy of penalty u/s 271(1)(c) . Merely for the reason that a claim raised by an assessee, which is thereafter found by the revenue to be not sustainable in law, by itself cannot justify levy of penalty u/s 271(1)(c) of the Act. Our aforesaid view is supported by the judgment of the Hon’ble Supreme Court in the case of CIT Vs. Reliance Petro Products (P) Ltd. [2010 (3) TMI 80 - SUPREME COURT]. - Decided in favour of assessee.
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