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2024 (4) TMI 801 - AT - Income TaxLevying penalty u/s. 271(1)(c) - as assessee has concealed the income by declaring the remuneration and interest on capital as gross receipts and declared the same u/s. 44AD and claimed to have been earned profit @ 8% - AO noted that the assessee ought to have declared the same as business income instead declared u/s. 44AD of the Act, which he did only to evade tax on interest and remuneration from the firm - AO noted that this issue was detected during assessment proceedings and he has not declared the income on his own but after detection it was declared and paid taxes HELD THAT:- Admittedly, the assessee has filed information in the return of income in regard to remuneration and interest on capitals received from the partnership firm - This fact is disclosed by assessee in its original return of income and original return of income was processed u/s. 143(1) of the Act but assessee claimed these two items i.e., remuneration received as a partnership firm and interest on capital receipt from partnership firm on presumptive basis u/s. 44AD of the Act and declared net profit @ 8%. We agree with the argument of ld. Senior DR that the assessee cannot make such claim and this is not allowable and this position has been clarified in the case of Anandkumar [2020 (12) TMI 994 - MADRAS HIGH COURT]. But, we noted that all the facts relating to these two claims made by assessee are available before the AO and even the AO processed the original return and accepted the claim, which may be wrong. We have gone through the decision of Reliance Petroproducts Ltd. [2010 (3) TMI 80 - SUPREME COURT] wherein the Hon’ble Supreme Court has propounded “the meaning of the term ‘particulars’ used in section 271(1)(c) would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate ‘particulars’. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate ‘particulars’”. Mere fact that the claim of the assessee has been negated by the AO, it does not amount to concealment of income or furnishing of inaccurate particulars of income by the assessee. In the present case before us also, the assessee has disclosed complete particulars of income relating to remuneration received from firm and interest on capital invested with the firm. Once this is a fact, it means that there is no issue as regards to concealment of particulars of income. Thus in the present case, the particulars are declared by assessee in his return of income and the assessee has only claimed those items as business receipts instead of declaring it as profit on gross basis. Thus this is not a fit case levy of penalty u/s. 271(1)(c) of the Act. There is no concealment of particulars of income or new evidences found by the AO for making any kind of addition. Appeal filed by the assessee is allowed.
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