TMI Blog2017 (2) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI CN PRASAD, JUDICIAL MEMBER For The Appellant : Shri Sanjay B Vora For The Revenue : Shri Akhilendra Yadav ORDER PER C.N.PRASAD (J.M.) : This appeal is filed by the assessee against the order of the Ld. CIT (Appeals)-18, Mumbai dated 22.05.2013 for the assessment year 2010-11 in sustaining the penalty levied under section 271(1)(c) of the Act. 2. Briefly stated the facts are that the assessee, an individual deriving income from salary, rental income and interest 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 ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me tax officer has disallowed the interest paid on the loan which was not related to the income earned by the assessee. We have to state that we have not concealed any particulars or furnished inaccurate particulars. The interest was paid on the loan borrowed for the purpose of acquiring the property. 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 income. The assessing officer held that out of loan of ₹ 4,00,00,000/-, ₹ 2,51,65,000/- was utilized for the purpose of making various other investments and not related to the acquisition of the property on which rental income was received, but interest was claimed one entire amount of ₹ 4,00,00,000/- against the house property income. The assessing officer also observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessment years 2007-08, 2008-09 and 2009-10. It is not in dispute that the assessee herself filed revised return for the assessment year 2009-10. This shows that the assessee all along knows that the entire interest claimed against rental income is not allowable. However, for the 2010-11, no such revised return was filed. The intentions of the assessee in claiming entire interest as deduction from house property income does not appear to be bonafide. The case 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 noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was required to claim interest only on the balance amount against the income from house property. But the assessee has made 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 after considering the reply of the appellant has held that the assessee had deliberately filed inaccurate particulars of income to defraud the revenue. The reliance placed by the AR on the decision of CIT Vs. Reliance Petroproducts is not helpful to the assessee because the facts of the present case are entirely different and distinguishable. In that case, before the hon'ble Supreme Court, the assessee had made claim for deduction u/s 36(1 )(iii) for interest paid on loan taken for purchase of shares. In that case, the claim made was debatable and two views were ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
