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TMI Blog2014 (7) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... as under :- "1. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in deleting the penalty levied u/s 271 (1 )(c) of the Act without appreciating that the assessee had failed to rebut the presumption in Explanation-1 of section 271 (1 )(c) of the Act." 2. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in deleting the penalty u/s 271 (1 )(c) of the Act without appreciating that the assessee had failed to prove that the rental income from the property had arisen due to systematic activity which is fundamental ingredient of business 3. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in deleting the penalty levied u/s 271 (1 )( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the levy of penalty and filed reply to the show cause notice. The AO did not accept the explanation and reply of the assessee and levied penalty of Rs. 6,81,543/-, Rs. 9,81,275/- and Rs. 12,43,968/- for the assessment years 2004-05, 2005-06 and 2006-07 respectively. The assessee challenged the action of the AO before the CIT(A). CIT(A) noted that the expenditure disallowed by AO was because of change of head of income and not because of incorrect or concealment of particulars regarding the expenses. Accordingly CIT(A) by following the decision of this Tribunal dated 27/07/2011 in the case of M/s. Eurolink Trading Pvt. Ltd. vs. ITO in ITA No.2925/Mum/10 as well as the decision of Hon'ble Supreme Court in the case of Reliance Petro Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw. When the assessee is in the business of taking the property on lease and further leasing out the same then treating the rental income as business income is a bonafide claim of the assessee though the same was not accepted by the AO. The issue of treatment of rental income as income from house property is highly debatable issue and rejection of such claim by the AO by taking a different view does not ipso facto lead to the conclusion that the assessee has furnished inaccurate particulars of income or concealed the particulars of income. There is no change in quantum gross income of the assessee and expenditure claimed by the assessee were disallowed by AO only because of the reason of assessment of rental income as income from house prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he head income from other sources while the respondent assessee considered the same to be taxable under the head capital gains. In view of the fact that there is only a change of head of income and in the absence of any facts that the claim of the assessee was not bonafide, the Tribunal deleted the penalty imposed u/s. 271(1)(c) of the Act. The Revenue has not been able to point out that the finding of the Tribunal is perverse. In these circumstances, we see no reason to entertain the proposed question (ii). 6. In the case in hand the assessee has furnished and disclosed all relevant particulars regarding the income from letting out of the property. Therefore, the assessment of income under a different head by the AO resulting in disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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