TMI Blog2016 (7) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted the fact that the assessee has inherited the capital from his mother. Therefore, we are of the view that the assessee has made his claim in his return of income and explained the facts. The same were not accepted by the authority, but the assessee’s claim was bona fide. Therefore, the claim has been accepted partly. Therefore, we are of the view that no penalty can be levied on this account. Therefore, we delete the penalty. Interest expenses claim in return of income - Held that:- In assessment years 2003-04 and 2004-05 we find that the assessee during the course of assessment proceedings has conceded that it was his mistake that he has claimed certain expenses which are inadmissible in nature and he agreed to include such expenses in its total income. We find that the AO and CIT(A) is justified in imposing the penalty, because the assessee had agreed to this addition and surrender was made. When the assessee has surrendered this income, penalty has to be levied as per the decision of Hon'ble Supreme Court in the case of Mak Data Private Limited [2013 (11) TMI 14 - SUPREME COURT ]. Therefore, if the assessee agreed to surrender the income for mental peace, the penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came to his notice that through mistake he had claimed certain expenses which are of inadmissible nature and he agreed to inclusion of such expenses in his total income and on sole basis, AO added ₹ 66,747/- without making any enquiry about the nature and allowability and any finding in the matter. In fact assessee has been-adopting this practice of preparing income expenditure account right from beginning and showing income on that basis. None of the predecessors of the AO ever took objection on the assessee's practice of keeping such an account and disclosing income on that basis. A perusal of the said income expenditure a/c will show that all expenses claimed therein are business expenses and none of them is either of capital nature or personal expenses liable to be disallowed u/s 37. Disallowance made by the AO is without any basis or reason. The simple fact that the assessee under wrong impression admitted that the expenses claimed by him are of inadmissible nature, whereas he is not an tax expert capable of judging admissibility or otherwise of the expenses claimed by him. Relied on.- (1) Hukumchand Mills Ltd. Vs. CIT- (1966) 63 ITR 232 SC Page 20-26 (2) C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee has admitted that Smt. Sajjan Bai was his mother. She has expired on 31st December, 1990. The assessee did not have any documentary evidence to show that his mother had any income. The matter travelled up to I.T.A.T. and I.T.A.T. has directed ₹ 2.50 lakhs to be treated as money given by Smt. Sajjan Bai. Therefore, the penalty was initiated on this ground and CIT(A) has confirmed the penalty. In assessment year 2004-05, the AO has levied the penalty on the ground that the assessee has received the gift from one Shri Nitin Patni of ₹ 1,00,000/- on 08.04.2003 and Shri Vinod Bangar of ₹ 1,00,000/- on 08.04.2003. During the course of assessment proceedings, the assessee was requested to submit the details of gifts received. Shri Vinod Bangar attended on 20.11.2006 and stated that he does not have any capacity to give such gift and assessee himself has made gift deed and bank statement. Therefore, considering the overall position, the AO has levied the penalty of ₹ 1,30,000/-, ₹ 25,000/- and ₹ 1,00,000/- for assessment years 2002-03 and 2003-04. 6. The matter carried to the ld. CIT(A) and the ld. CIT(A) has confirmed the same. 7. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s return declaring income of ₹ 2,61,401/- 26/08/2002. (2) Return processed on u/s 143(1) (a) on 15/08/03 and AO issued notice u/s 148 on 13/02/06. (3) AO passed order on 18/12/06 on income of 9,41,018/- . (4) Being aggrieved appellant preferred an appeal before Hon'ble CIT(A), Indore, which was dismissed by order dated 25/06/2010. (5) AO issued show cause notice u/s 271 (l)(c) on 16/04/2012 and then passed order imposing penalty u/s 271(1)(c) vide order dated 21/05/2012. SI. No. Date Event 1. 18/12/2006 Assessment order under s. 143(3) was passed by the lTO,Dhar. 2. 25/06/2010 CIT(A)-I, Indore passed the order in the case of the assessee in the first appellate proceedings. 4. 31/03/2011 The last date for passing the penalty order under s. 271(1)(c) as per the proviso to s. 275(1) which provides that order imposing the penalty should have been completed within one year from the end of the financial year in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance of expenses for ₹ 79,244/- and imposed penalty u/s 271(1)(c) for ₹ 25,000/- . Same arguments as pleaded above in A.Y. 2002-03 for penalty imposed. Ground No.3 :- Same arguments as pleaded for timebarred proceedings in A.Y.2002-03. A.Y.2004-05 :- ITA no. 540/Ind/ 2015 Ground no. 1 2 :- Assessee filed his return declaring income of ₹ 1,88,416/- which was assessed on 18/12/06 u/s 148 on income of ₹ 4,92,953/-. Copy of I.T. return filed. Additions are for disallowance of expenses for ₹ 80,965/- and alleged addition of gifts received for ₹ 2,00,000/-. Copy of IT return of Nitin Patni with copy of cheque, Gift deed and Bank A/c are filed. Copy of IT return of Vinod Banger with copy of cheque, Gift deed and Bank A/c are filed. A.O. imposed penalty u/s 271(1)( c) for ₹ 1,00,000/-. Assessee has disclosed the entire facts before the authorities below without concealing any income. The assessee made a claim of deduction in the return of income and explained the facts but the same were not accepted by the authorities below and additions have been confirmed. Therefore, it is a case of mere disallowance of expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Penalty justified. 5 Sushil Kumar Modi Vs. Assistant C.LT. (2013) 36 CCH 0414 Jaipur Trib Page 29 Penalty u/s 271(1)(C) During assessment proceedings, AO found that assessee received two gifts of ₹ 1,00,000/- each-Since there were cash deposits in donors' account prior to date of making gift, AO doubted creditworthiness thereof and treated gifts as bogus and unexplained, made addition. Penalty was imposed- CIT(A) confirmed action of AO-Held, assessee had furnished particulars of gifts in return of income filed by him-Assessee had furnished income-tax particulars as well as declarations for making gifts from donors along with their balance sheets furnished with income tax return. In view of judgment of Apex Court in case of CIT v. Reliance Petroproducts P. Ltd. [2010] 322 ITR 158 (SC), penalty is not eligible-Appeal allowed. 6 Assistant C.I.T. Vs. Chandbibi S Zaidi Kennedy House (2013)36 CCH 099 Mum Page 30 -31 Penalty u/s 271 (1)(c)-Concealment of income-Claim of gift disallowed-Leviability-Assessee had received gift of immovable property being flat from a company-Since assessee had disclosed all relevant facts and particulars regarding gift, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(c) for imposing the penalty-There is no good ground to upset the aforesaid finding of the Tribunal-s-Levy of penalty under s. 271(1)(c) rightly cancelled. Assessee having surrendered income and the Tribunal having given reasons for accepting the factual version of the assessee. It is noticed from the record of the case that it is a case of surrender of income by the assessee and full amount of tax has been paid and found that there was no mens rea as contemplated under s. 271(1)(c), cancellation of penalty was justified. 10 C.LT. Vs. Chennupati Tyre Rubber Products (2014) 90 CCH 0181 APHC Page 4 -7 Penalty u/s 271 (1)( c)-Concealment of income-Assessee filed a return, showing loss for A Y 1994-95-Intimation was given u/s 143(1)(a) by AO reducing loss-Assessee filed an application for rectification thereof and said request was accepted by AO-Thereafter an exercise u/s 143(2) was undertaken and scrutiny of each and every item was made-In respect of two items of sundry credits, explanation offered by assessee was not found satisfactory-Assessee agreed for treating those two items as income and it paid tax-AO imposed penalty u/s 271 (1 )( c) in respect of two sund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied penalty u/s 271(1)(c) on grounds that assessee had filed revised return only after the survey was conducted uls 133A and assessee had failed to disclosed unexplained investment-CIT(A) and ITA T dismissed assessee's appeal-Held, once an explanation is submitted, onus shifts to Revenue to come to a conclusion that explanation was not acceptable and therefore case falls uls 271 (1 )( c) when assessee had given some reasonable explanation, it was incumbent on part of Authority to consider same on its own merits before proceeding further-In present case, explanation made on basis of Explanation B to Section 271(1)(c) was satisfied by assessee and his legal heirs to some extent, but, same was not considered by revenue authorities-Order of Tribunal confirming penalty proceedings was set aside-Assessee's appeal allowed. 12 Commissioner Of Income Tax Vs. Mathura Commercial Co. (2014) 361 ITR 0380 (All) Page 16-19 Penalty u/s. 271 (1)( c)-Failure to furnish returns, comply with notices, concealment of income, etc.-In return filed by assessee, assessee had shown various outstanding amount against different parties-AO issued notices to assessee to explain and accordingly oppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 2002-03, we find that the assessee has claimed in the return of income that he has inherited this capital of ₹ 5,49,542/- from his mother Smt. Sajjanbai. The assessee has added this amount in his capital account. The AO and the ld. CIT(A) has confirmed the same, but the I.T.A.T. has restricted this addition to the tune of ₹ 2,99,542/- and this capital was inherited from his mother. We find that the assessee has disclosed the entire facts before the authorities and the assessee has made the claim in his return of income and it was his bona fide claim. The Tribunal has accepted the claim that the assessee has claimed ₹ 5,49,542/-, but the Tribunal has restricted the above addition to ₹ 2,99,542/-. Therefore, we are of the view that the assessee could not prove the claim that he has carried forward the amount and he has inherited this capital from his mother. The assessee could not prove that he has inherited ₹ 5,49,542/-, but the Tribunal has accepted the fact that the assessee has inherited the capital from his mother. Therefore, we are of the view that the assessee has made his claim in his return of income and explained the facts. The same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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