9911796707
TMI Blog2013 (12) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... ent assessee. We, however, proceed to dispose off the Revenue's appeal on merits after hearing the learned Departmental Representative. 3. Facts in brief:- The assessee company is engaged in the real estate business and dealing in the property. During the year, the assessee has received rental income in respect of the property which was let out at Rs. 18 lakhs. Against the said rental income, the assessee has claimed expenditure of Rs. 9,36,344 by treating treated this rental income as business income. In response to the show cause notice, the assessee, during the assessment proceedings, has submitted as under:- During the year the assessee has received rental income in respect of property. The assessee has also incurred expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and bonafide mistake. Reliance was also placed on various decisions on this score which has been noted by the Assessing Officer in the penalty order. However, the assessee's explanation has been rejected, by the A.O. on the ground that nature and source of income was known to the assessee and despite that, it has claimed the income as business income so as to get benefit of allowability of certain expenses. Accordingly, after detail discussion, he levied the penalty of Rs. 3,84,000, u/s 271(1)(c) for furnishing of inaccurate particulars of income. 5. Before the learned Commissioner (Appeals), it was argued that, whether such a receipt can be taxed under the head "business income" or "income from house property", is a debatable issue and m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show the "income from house property" under the head "business income", solely for the purpose of claiming expenditure. Such a change of head was not a bonafide mistake but done purposely to reduce taxable income and, therefore, the penalty has rightly been levied by the Assessing Officer on this score. 7. We have carefully considered the relevant findings of the Assessing Officer and the learned Commissioner (Appeals) and also the submissions made by the learned Departmental Representative. The main issue is, whether the penalty under Section 271(1)(c) can be levied on these facts and on change of head of income. In the quantum proceedings, the income has rightly been assessed under the head "income from house property" as the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he nature of income and its classification. This has to be clearly brought out on the basis of material and evidence on record. Once that has not been done, then clearly it becomes a very debatable issue and in that situation there cannot be a case of assessee being guilty of furnishing inaccurate particulars of income u/s.271(1)(c). In this case, clearly it has not been brought on record by the A.O. that assessee's explanation is actually false on the basis of some evidence or material. The penalty u/s.271(1)(c) cannot be sustained in such a situation. Thus, under these circumstances, we uphold the order passed by the learned Commissioner (Appeals) deleting the penalty imposed by the Assessing Officer. 8. In the result, Revenue's appeal i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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