2018 (3) TMI 807

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..... under section 271(1)(c) on Rs. 3,47,831 in respect of addition made for clients deposit account. The Commissioner (Appeals) erred in confirming the same. 2. The learned Commissioner (Appeals) ought to have appreciated that the balance in client deposit account was disclosed on the face of the Balance Sheet and therefore no penalty ought to have been levied. 3. Without prejudice to Ground No.1, Commissioner (Appeals) erred in confirming the penalty without appreciating the that amount of client deposit can only be taxed at best in the year in which debt of appellant firm has become time barred i.e. after three years and not in the year of receipt itself. 4. Without prejudice to Ground Nos.1 and 2, Commissioner (Appeals) erred in con .....

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..... sustained the penalty. Being aggrieved, the assessee is in appeal before the Tribunal. 3. The ld. AR submitted that the amount of Rs. 3,47,831/- was lying with the appellant for payment on behalf of the client and therefore, it was shown as liability in the appellant's books. The impugned amount was, therefore, not in the nature of appellant's income, but in the nature of liability. There being no further directions from the client to make any other payments on their behalf from long time and as the amount was lying as credit balance since long, therefore, the amount was offered as income for taxation in the assessment year 2010-11 and therefore in these facts, the assessee cannot be said to have either furnished inaccurate particulars of .....

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..... the amount received from the client stood deposited by the assessee. The dispute was as to the nature of amount lying in the account - whether in the nature of liability or income. In the quantum proceedings, the addition was, however, sustained as the assessee could not furnish any documentary evidence to support its claim. Therefore, relying on the decision of Hon'ble Apex Court in Reliance Petroproducts (supra), mere making of a claim which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee, particularly when the assessee had shown some the reasons for not furnishing the supporting documentary evidence in the quantum proceedings. It is also a fact that the expl .....

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