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2017 (2) TMI 332 - ITAT MUMBAI

2017 (2) TMI 332 - ITAT MUMBAI - TMI - Penalty levied u/s 271(1)(c) - false claim made towards interest deduction while computing income from house property - Held that:- The assessee has deliberately filed inaccurate particulars in respect of the claim made towards interest deduction while computing income from house property. It is apparent from the facts that entire loan amount was not utilized for purchase of the property on which rental income was earned. Similar deductions were made in the .....

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ower authorities that the assessee had deliberately and intentionally made a false claim of excess interest against the house property income. However, at the same time, we are of the considered view that this is not a fit case for levy of 300% penalty. Therefore, we direct the assessing officer to levy minimum penalty i.e. 100% of the income sought to be evaded and compute the penalty accordingly. - Decided partly in favour of assessee - ITA NO. 4611/MUM/2013 - Dated:- 3-2-2017 - SHRI D KARUNAK .....

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t income filed return on 11.10.2010 declaring income of ₹ 5,67,84,540/-. The assessment was completed on 30.11.2012 u/s 143(3) determining the income of the assessee at ₹ 5,99,87,180/-. While completing the assessment, the assessing officer noticed that the assessee claimed interest of ₹ 36,56,446/- and repairs and maintenance of ₹ 17,60,937/- as deduction u/s 24 under the head income from house property against the rental income of ₹ 58,69,789/- earned. The assessi .....

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scheme and by letter dated 29.03.2007 bank has sanctioned loan to the assessee. The assessing officer noticed that the interest payment of ₹ 36,56,446/- on the loan of ₹ 4,00,00,000/- has been claimed as deduction under section 24 of the Act. The assessing officer required the assessee to furnish the details of utilizing of the said loan of ₹ 4,00,00,000/- and in response to the same, assessee submitted that the residential house was purchased for ₹ 82,00,000/- and agricu .....

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purchase of shop and arrived at such interest at ₹ 13,56,084/- as allowable deduction against rental income. The assessing officer recomputed the income from house property and allowed this interest of ₹ 13,56,084/- as deduction and balance interest of ₹ 23,00,362/- was disallowed. 3. The assessing officer initiated penalty proceedings u/s 271(1)(c) of the Act for furnishing inaccurate particulars in respect of the excess interest claim made under the head income from house pro .....

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The loan account of bank was also furnished during the course of assessment proceedings. It has been held by various judgements that the penalty cannot be imposed on disallowance of expenses. 4. The assessing officer, however rejected the explanation of the assessee holding that the intentions of the assessee in claiming deduction for interest does not appear to be bonafide and the assessee has intentionally not complied with the provisions of the Act and furnished inaccurate particulars of inc .....

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the house property income was disallowed. He also observed that for the assessment year 2009-10, the assessee has revised its return and admitted income of ₹ 27,77,899/- as against income of ₹ 4,76,538/- admitted in the original return. The assessing officer observed that for the assessment year 2010-11 no revised return has been filed and this shows that the assessee has been in the habit of claiming excessive interest expense against house property income. Thus, he concluded that .....

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revised computation and recomputed the interest allowable against rental income. The Ld. counsel for the assessee submits that it is only a mistake in the claim for deduction of interest and this mistake was also happened to be made even in earlier years also. He submits that there is no concealment of income or furnishing of inaccurate particulars and the assessee has made full disclosure of particulars. He places reliance on the following decisions and submits that mere making of claim which i .....

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orders of the lower authorities may be sustained. 7. We have heard the rival submissions, perused the orders of the authorities below. On careful reading of the orders of the authorities below, we find that the assessee has deliberately filed inaccurate particulars in respect of the claim made towards interest deduction while computing income from house property. It is apparent from the facts that entire loan amount was not utilized for purchase of the property on which rental income was earned. .....

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se law relied on by the assessee have no application to the facts of the present case. 8. The submissions of the assessee have been elaborately considered by the Ld. CIT (Appeals) and held that the assessee has deliberately and intentionally made a false claim of excess interest against house property income to defraud the revenue observing as under : 1.3. I have considered the submissions of the appellant, order of the A.O. and facts of the case carefully, it is noticed that in the assessment o .....

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ade a false claim of interest agains.t the house property income. The return for AY. 2009-10 was revised by the assessee. After rectifying this mistake in the year under consideration, the assessee has repeated the same false claim of interest on the total amount of ₹ 4 crores against the house property income. The AO. has made a disallowance of excess interest claimed at ₹ 23,00,362/- and initiated penalty proceedings u/s 271 (1 )(c). The assessee has not filed appeal against this d .....

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appellant has submitted that in the AY. 2008-09, the interest was disallowed by the AO. while passing assessment order u/s 143(3). In AY. 2009-10, the revised return was filed for accurate claim of interest relating to house property. In the A.Y. 2010-11, the assessee could not revise the return due to a lapse on her part as it had escaped her attention. During the assessment proceedings, revised calculation was submitted before the AO. To strengthen its view, the AR has relied on the decision .....

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ade a false claim to defraud the revenue by claiming the interest on ₹ 4 crores against income from house property. In this way, the assessee has claimed excess interest of ₹ 23,00,362/-. When confronted by the A.O. during the assessment proceedings, the AR has admitted that it has made a false claim and submitted a correct calculation before the AO. The A.O. has made disallowance and initiated penalty u/s 271 (1 )(c). In the penalty proceedings, the A.O. has given opportunity and af .....

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