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TMI Blog2015 (5) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... n this appeal reads as under: "Whether the CIT(A) under the facts and circumstances of the case and in law was justified in deleting the penalty amounting to Rs. 33,81,821/- imposed by the Assessing Officer u/s 271(1)(c) of the I.T. Act, 1961?" 3. Briefly stated the facts giving rise to this appeal are that the assessment was completed u/s 143(3) of the Act on 13.11.2009 determining the total income at Rs. 1,22,55,437/-. The AO noted that in the return of income an amount of interest Rs. 72,08,432/- was received from fixed deposits which was shown by the assessee as business income and the AO treated the same as income from other sources. The AO also observed that the assessee has paid Rs. 25 lakhs as consultancy fee and the same was clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord. 7. The ld. Departmental Representative, supporting the penalty order, submitted that the assessee made a wrong claim by furnishing inaccurate particulars of its income and the income which was received as interest from fixed deposits was wrongly shown as business income. The ld. DR further contended that the assessee also claimed consultancy fee as business expenditure which was paid against capital gains income. Therefore, the AO was right in holding that the assessee has furnished inaccurate particulars of its income with an intention to evade taxes and the penalty u/s 271(1)(c) of the Act was rightly levied on the assessee. The ld. DR vehemently contended that the CIT was not justified in deleting the penalty without any justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucts (supra), the relevant operative part reads as under: "5.2 Decision "I have considered the submission of the appellant and observation of the Assessing Officer. It is seen that Assessing Officer has levied penalty on account of showing interest income as business income and claiming consultancy expenses paid to the consultant for sale of shared to the foreign party as business expenditure. The Assessing Officer held that the interest income received from fixed deposits is assessable as income from other sources and the consultancy payment of Rs. 25,00,000/- was paid for sale of shares to the foreign party therefore, such expenses cannot be allowed as business expenditure as the income from sale of shares was assessable under the head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed that it has disclosed all material facts necessary for the assessment. It never tried to conceal or file inaccurate particulars of income, therefore, penalty for concealment could not be imposed on the appellant. A glance at the provisions of section 271(1)(c) suggests that in order to be covered u/s 271(1)(c) there has to be concealment of income of the appellant. Secondly the appellant must have furnished inaccurate particulars of its income in the return of income. However in the instant case, the appellant has given all particulars of its income shown in the return of income. The appellant did not conceal or suppress any facts relating to the income of the instant year. The information given in the return of income was not found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer was not justified and same is delelted." 10. In view of above, we are in agreement with the conclusion of CIT(A) that the appellant - assessee had given all particulars of its income in the return of income and assessee did not conceal or suppress any fact relating to the income earned during the relevant financial year. The AO have not brought out any fact or allegation on record that the information given by the assessee in its return of income was either bogus or incorrect and hence the same is prescribed as correct which was not disputed by the AO. The CIT(A) also observed that the interest income received from fixed deposits was shown as business income on the basis of earlier years assessment orders under the bonafide b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts (supra), wherein their lordships speaking for the Apex Court of India expressly held that merely because the assessee had claimed the expenditure which claim was not accepted or was not acceptable to the Revenue, that, by itself, would not attract penalty u/s 271(1)(c) of the Act. However, in the present case, the claim of the assessee on both the counts was not dismissed at the threshold but both the claims of the assessee was allowed in a different head of income instead of the head of income adopted by the assessee in its return of income. 12. Under the above noted facts and circumstances of the case, we are inclined to hold that the assessee cannot be held guilty of furnishing of inaccurate particulars of income or concealment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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