TMI Blog2016 (8) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... 016 - SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI RAJESH KUMAR, AM For The Assessee : Shri Haresh P Shah For The Revenue : Shri Vinod Kumar ORDER PER RAJESH KUMAR, A. M: This is an appeal filed by the assessee against the order dated 13.11.2013 passed by Commissioner of Income Tax(A)-34, Mumbai, for assessment year 2009-10 confirming the penalty levied by AO u/s 271(1)(c) of the Act. 2. The only issue raised by the assessee in the grounds of appeal is against the confirmation of penalty of ₹ 2,09,100/- by the ld.CIT(A) as imposed by the AO u/s 271(1)(c ) of the Act on the deemed income. 3. The facts of the case are that the assessee filed return of income on 29.3.2007 declaring a total income at NIL. The returned was processed under section 143(1) of the Act accepting the returned income. Thereafter the case was re-opened u/s 147 read with section 148 of the Act and accordingly a notice u/s 148 dated 9.2.2009 was issued to the assessee and served upon him. Thereafter, a statutory notices u/s 143(2) and 142(1) were issued and served upon the assessee. During the course of assessment proceedings, the AO found that the assessee was holding substanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of Companies Act, 1956. The provisions of Income tax Act is contrary to the provisions of the Companies Act. 4) The assessee has paid Taxes due on assessed income. 5) The loan taken from company by shareholder in actuality in is not an income but deemed income as per Income tax Act, 1961. 6) Assessment penalty proceedings are independent proceedings. 7) The decision in Dharmendra Textiles is not an authority is an automatic consequence of an addition being made to income of taxpayer for the reason that whether it is a Civil Liability or a criminal Liability Penalty can only come into play when the conditions are satisfied. Even explanation 1 to section 271(1)(c) raises rebuttable presumption shifts the onus on the assessee to establish bonafide of the claim. 8) The assessee has not concealed any particulars or facts relating to loan received from the company during the year. 9) The expression furnishing of an accurate particular of income implies furnishing details or information about income which are not in conformity with the fact or truth. It does not extend to subjective areas such as taxability of income, admissibility of a dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing as under : 4. I have considered the submissions made by the appellant and the impugned penalty order on this issue. The Assessing Officer had added income of ₹ 8,50,OOO/-on account of deemed dividend u/s 2(22)(e) in the order passed u/s.143(3) r.w.w 147 of the Act. Since my predecessor vide order in Appeal No.CIT(A)-34/1T195/2009-10 dated 09.11.2010 for A.Y.2006-07 had rejected the claim of the appellant and dismissed the quantum appeal, the penalty levied u/s.271 (1)( c ) is also confirmed 6. The ld. Counsel of the assessee submitted before us that the burden cast upon the assessee by Explanation (1) to section 271(1)(c) has been fully discharged by the assessee by submitting that the assessee has not concealed any particulars of income in respect of ₹ 8,50,000/- or furnished any inaccurate particulars of income. The ld. Counsel submitted that the assessee has fully disclosed the fact of having borrowed the money from the said concern in the balance sheet and thus, there was no question of filing either inaccurate particulars of income or concealment of particulars of income. In view of this facts, the ld. Counsel prayed that the penalty imposed by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As regard the deposit of ₹ 3 crores is reflected in the bank account as per photocopy submitted by the assessee, it has been explained by the assessee vide its letter dated 05.03.2001 as under:- The receipt of ₹ 3 crores as security deposit by the assessee company from M/s Daewoo Motors (I) Ltd flows from the MOU entered into between them. The relevant clasue 8, 9, 10 and 11 of the MOU have been reproduced in our letter dated 06.02.2001. We refer to them again. In terms of clause 9 of the MOU, the fee payable by DMIL to MIL will accrue on the date on which the contract between the DTC and DMIL is signed or on which the DTC places an order on DMIL for the supply of buses. The order or the contract has yet not been awarded by DTC and hence the security deposit of ₹ 3 cores has not yet changed its character and remains as a security deposit with the assessee company. 17. This would amply demonstrate that the assessee had not concealed the particulars of his income nor it is a case where the assessee deliberately furnished inaccurate particulars of such income. This would also demonstrate that two views were possible and the claim of the assessee was b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under Section 271(1)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to the inaccurate particulars. 20. As a result, the question is answered in the negative, that is in favour of the assessee and against the Revenue and this appeal is dismissed.‟ Therefore, we are of the considered view that the order of ld CIT(A) is wrong to that extent. In this case, the income has been assessed under the deeming provisions of section 2(22)(e) which was confirmed by the ld. CIT(A) vide above referred order in the case of S V Kalyanam V/s ITO (2010) 327 ITR 477 (Mad) wherein it has been held: that addition made under a deeming provision like section 69, could not be extended to penalty provision. In the instant case, addition was made u/s 68 whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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