TMI Blog2013 (6) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the books of account allowed the A.O. to make the addition on estimate basis. When the addition is made on estimate basis, no penalty under Section 271 (1)(c) can be imposed as per the ratio laid down in C.I.T. vs. Arjun Prasad Ajit Kumar, (2008 (1) TMI 821 - ALLAHABAD HIGH COURT) As no finding of deliberate concealment of income was brought in the instant case as the assessee has never suppressed the interest income from FDRs. Interest income from FDR was duly shown. It was for the A.O. to treat this income as business income or income from other sources. But the fact remains that there is no concealment on the part of assessee. So, no penalty leviable - in favour of the assessee. - Income Tax Appeal No.-79 of 2008 - - - Dated:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment was completed under Section 143(3) of the I.T.Act, on a total income Rs.9,77,190/= by rejecting the books of account under section 145 of the Income Tax Act. Aggrieved with the order, assessee-appellant filed the first appeal, where a partial relief of Rs.94,426 was allowed to the appellant. Thus, the net income was worked out to Rs.8,82,760/=. In Second Appeal, the Tribunal has set aside the order and remanded the matter back to the A.O. In pursuance to the direction, the A.O. passed an order under Section 143 (2), where the interest on the FDR was calculated as Rs.2,24,344/= for a separate source of income and addition was also made by computing the net profit rate @ 8% under Section 44 AD of the Act, on the contract business for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim of the assessee, the explanation offered by the assessee can not be regarded to be false. No material or evidence was brought on record or pointed out which may prove that the revenue had discharged the burden for proving that explanation of the assessee was incorrect or has ever furnished the inaccurate particulars of his income. So, the present case is not a case of concealment of the income. Hence, no penalty can be imposed for the concealment under Section 271 (1)(c). On the other hand, Sri D.D.Chopra, learned counsel for the department relied on the order passed by the lower authorities. He submits that earlier, the A.O. vide order dated 24.03.1995 has treated the amount of interest on FDR as income of the assessee separately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the part of the assessee. Such deliberate act must be either for the purpose of concealment of income or furnishing of inaccurate particulars. The Assessing Officer is required to arrive at a finding that the explanation offered by the assessee, in the event he offers one, was false. He must be found to have failed to prove that such explanation was not only not bona fide but all the fact relating to the same which are material to the income were not disclosed by him. Thus apart from his explanation being not bona fide, it should be found as a fact that he has not disclosed all the facts which were material for the computation of his income. The order imposing penalty is quasi-criminal in nature and the burden lies on the Department t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous. Where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, it may be mentioned that no finding of deliberate concealment of income was brought in the instant case as the assessee has never suppressed the interest income from FDRs. Interest income from FDR was duly shown. It was for the A.O. to treat this income as business income or income from other sources. But the fact remains that there is no concealment on the part of assessee. So, no penalty for concealment is leviable as per the ratio laid down in the case of C.I.T. vs. Attar Singh and bros, 2008 (11) MTC 35 (All). By considering the totality and circumstances of the case, we set aside the impugned orders and cancelled the levy of the penalty of Rs.4,00,000/= (four lacs). The assessee will get the relief accordingly. The answer for both ..... X X X X Extracts X X X X X X X X Extracts X X X X
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