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TMI Blog2013 (12) TMI 892X X X X Extracts X X X X X X X X Extracts X X X X ..... , the AO held that the above named receipts do not fall within the category from income derived from the business of the assessee. He, therefore, reduced the deduction and added the sums to the incomes of the assessee. Consequently, the AO levied the penalty by initiating the proceedings under section 271(1)(c). 4. In the penalty proceedings, the assessee submitted that, the primary facts have been supplied to the revenue authorities and there is no occasion for the levy of penalty, as this is not a deliberate attempt to conceal income or furnish any inaccurate particulars of income. The arguments of the assessee were rejected by the AO. 5. The assessee, therefore, approached the CIT(A), before whom, he reiterated the submissions made bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndation for the levy of penalty. The AR primarily relied on the decision of CIT vs Reliance Petroproducts Ltd., reported in 322 ITR 158 (SC). He, therefore, prayed that the levy of penalty was not correct and should be cancelled. 9. The DR, on the other hand, submitted that the impugned receipts cannot be said to have been derived from the business activity of the assessee and, therefore, submitted that the levy of penalty by the revenue authorities was in accordance with the law. He referred to the decisions rendered by the Hon'ble Delhi High Court, in the case of CIT vs Escorts Finance Ltd., reported in 328 ITR 44 and in the case of CIT vs Zoom Communication P. Ltd, reported in 327 ITR 510. 10. The AR in the rejoinder submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for earning of interest on idle funds. It is this context, the expression derived from has been explained by the various judicial fora. 12. The case of the assessee has been that it had earned income during the course of business, but that by itself cannot absolve the assessee from the infirm claim, because, the AR has submitted before us that income from crane hire is a result of hiring of the crane, when it is lying idle. Similarly, sale of gunny bags/drums cannot be having a straight and clear nexus with the operation of the business and because of which the conduct of business could get hampered. Even the claim of insurance cannot be comprehended that it would have a clear nexus with the business operation. In our opinion, the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the assessee would not be liable to imposition of penalty, even if he was not acting bona fide while making a claim of this nature, that would give a licence to unscrupulous assessees to make wholly untenable and unsustainable claims without there being any basis for making them, in the hope that their return would not be picked up for scrutiny and they would be assessed on the basis of self-assessment under section 143(1) of the Act and even if their case is selected for scrutiny, they can get away merely by paying the tax, which in any case, was payable by them. The consequence would be that the persons who make claims of this nature, actuated by a mala fide intention to evade tax otherwise payable by them would get away without paying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction u/s 80IA, specially in view of the existing judicial interpretations consistently coming from the past, that the income has to be derived from the business activity. 15. In our opinion, the case of Reliance Petroproducts (supra) cited and relied upon by the AR, cannot aid the assessee, because, this case talks of the situation, where there is a claim made, which may be allowable, but has been otherwise disallowed by the revenue authorities. In the instant case, the assessee has made a claim which has been consistently held against the assessee and was contrary to the existing judicial precedents and law, which has been held, to be not allowable. 16. In these circumstances, in our opinion, the revenue authorities were correct in d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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