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2016 (4) TMI 942 - ITAT CHENNAI

2016 (4) TMI 942 - ITAT CHENNAI - TMI - Penalty u/s 271(1)(c) - claim made by the assessee that the interest on the Non-resident Non-repatriable account deposits is exempted from taxation - Held that:- The assessee filed the return of income in the status of 'resident'. In the note filed alongwith the return of income, the assessee claims that he was a 'non-resident' upto assessment year 2001-02. The assessee has also indicated in the note filed alongwith the return of income that the investment .....

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de by the assessee that the interest on the Non-resident Non-repatriable account deposits is exempted from taxation. This Tribunal is of the considered opinion that after furnishing all the details for making a claim before the Assessing Officer under the Income-tax Act, 1961, cannot be construed as furnishing inaccurate particulars of income. The details of deposits made by the assessee and the interest accrued on such deposits are very much available before the Assessing Officer. During the co .....

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ri S Sridhar, Adv For the Respondent : Shri Sasikumar, JCIT ORDER Per N R S Ganesan, Judicial Member This appeal of the assessee is directed against the order of the Commissioner of Income-tax (Appeals) Central-I, Chennai, dated 27.2.2014 and pertains to assessment year 2005-06. 2. Shri S. Sridhar, ld. Counsel for the assessee submitted that in this case, the assessment u/s 143(3) of the Act was completed on 27.12.2007. According to the ld. Counsel, the assessee is a non- resident and made sever .....

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xable for the assessment year 2005-06 has not been approved by the CIT(A) and the amount taxable during the assessment year 2006-07 has been determined at ₹ 33,69,100/-. The Assessing Officer further found that the residential status of the assessee during the year under consideration was 'resident', therefore, the interest is not exempt u/s 10(4)(i) of the Act. The claim of the assessee that the interest on the deposits made was exempt u/s 10(4) of the Act has been elaborately con .....

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,085/- u/s 271(1)(c) of the Act. The CIT(A) has also confirmed the penalty imposed by the Assessing Officer. According to the ld. Counsel, when the assessee declared all the deposits and claims that the interest income on the non-resident deposit was exempt from taxation, such a claim cannot be said to be furnishing of inaccurate particulars of income. The ld. Counsel further submitted that the entire deposit in non-resident account was made during the assessment years 2004-05 and 2005-06. After .....

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ITR 158. 2. On the contrary, Shri Sasikumar, ld. Departmental Representative submitted that during the assessment proceedings, the Assessing Officer found that the assessee was following cash system of accounting, therefore, the interest income of ₹ 4,69,43,615/- is taxable during the assessment year 2005-06. The assessee claimed before the CIT(A) that he was following mercantile system of accounting, therefore, the interest income has to be taxed on accrual basis. The CIT(A) found that t .....

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the Act, therefore, the claim made by the assessee that the interest income is exempt would amount to furnishing inaccurate particulars of income. According to the ld. DR, the CIT(A) has rightly confirmed the penalty levied by the Assessing Officer. 3. We have considered the rival submissions on either side and also perused the material available on record. During the year under consideration, the assessee filed the return of income in the status of 'resident'. In the note filed alongwit .....

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