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M/s. Perfect Homfin Private Limited Versus DCIT, Circle 14 (1) , New Delhi

2017 (8) TMI 483 - ITAT DELHI

Penalty u/s 271(1)(c) - disallowing the commission payment challenging the capabilities of Ms. Divya Khanna to provide tips for purchasing shares etc. to assessee - subjective satisfaction - Held that:- In the instant case, when the AO has not disputed the particulars of income furnished by the assessee nor he has disputed the amount on which commission is claimed to have been paid by the assessee, the disallowance on the ground of challenging the capabilities of Ms. Divya Khanna to provide tips .....

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d know-how has been provided by Ms. Divya Khanna to earn the business income on which tax has already been paid, the penalty cannot be imposed nor does it amount to furnishing of inaccurate particulars. So, in the given circumstances, we are unable to hold that the assessee has furnished inaccurate particulars of income for making payment of ₹ 6,00,000/- to Ms. Divya Khanna so as to attract the penalty u/s 271(1)(c) of the Act, hence we hereby delete the penalty - Decided in favour of asse .....

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ffirming the penalty order dated 29.07.2013 passed u/s 271(1)(c) of the Income-tax Act, 1961 (for short the Act ), qua the assessment year 2010-11 on the grounds inter alia that :- 1. On the facts and in the circumstances of the case the ld. CIT(A) has grossly erred in confirming the penalty of ₹ 181800 imposed u/s 271(1)(c) by the A.O. for A.Y. 2010-11. 2. That the penalty is base on disallowance of Professional and Management expenses and penalty for disallowance of expenses per se canno .....

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181800 imposed u/s 271(1(c) by the A.O. and upheld u/s 250 by the CIT(A) be deleted in the interest of equity and merits of the case. 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : On the basis of completed assessment under section 143(3) of the Income-tax Act, 1961 (for short the Act ) at the total income of ₹ 60,43,239/- as against the returned income of ₹ 46,81,685/- and taxable income u/s 115JB of the Act on book profit of ₹ 3,64,48, .....

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fees but has failed to present in the office for cross examination. So, AO proceeded to conclude that the assessee booked these expenses just to reduce his income as Ms. Divya Khanna, a 20 years old student, was not having any active participation in the business of the share market and moreover, there was no other transaction in the bank account of Ms. Divya Khanna other than an amount of ₹ 6,00,000/- debited by the assessee under the head professional fees. Consequently, the AO sought t .....

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e ld. CIT (A) who has dismissed the appeal. Feeling aggrieved, the assessee has come up before the Tribunal by challenging the penalty order passed u/s 271(1)(c) of the Act. 6. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 7. Undisputedly, the assessee is engaged in the business of derivatives, jobbing and investment; .....

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d to aforesaid Ms. Divya Khanna and Mr. Sanjeev Khurana as commission for providing tips to the assessee. 8. From the grounds of appeal, arguments addressed by ld. Authorized Representatives of the parties to the appeal and facts & circumstances of the case, the sole question arises for determination in this case is :- as to whether AO / CIT (A) have erred in imposing / affirming the penalty of ₹ 6,00,000/- on the ground that the assessee has furnished inaccurate particulars of income .....

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rdingly, it is found to be a fit case for imposition of penalty u/s 271(1)(c) of the Act r.w. Explanations thereto. Moreover, inspite of giving two opportunities vide penalty notices u/s. 274 read with section 271(1)(c) of the Income Tax Act, 1961 was issued on 08.01.201.3 and 19.07.2013, assessee has not furnished any reply nor attended any proceedings. At the time of assessment proceedings also Ms. Divya Khanna was not produced rather her father attended the proceedings. I am convinced that wi .....

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ine the penalty order in the light of the decision rendered by Hon ble Supreme Court in case titled as CIT vs. Reliance Petro Products Pvt. Ltd. - 322 ITR 158 (SC), the penalty proceedings are not sustainable. Operative part of the decision rendered by Hon ble Supreme Court in Reliance Petro Products Pvt. Ltd. (supra) is reproduced for ready reference as under :- A glance at the provisions of section 271(1)(c) of the I.T. Act, 1961 suggests that in order to be covered by it, there has to be conc .....

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penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or .....

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