TMI Blog2019 (1) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... as concealment of income or inaccurate particulars of income. Addition u/s 14A - the dividend income of ₹ 71,19,981/- was also disclosed by the assessee and the assessee claimed deduction as provided under Section 14A of the Act. The Assessing Officer by applying Rule 8D of Income-tax Rules, 1962 disallowed ₹ 5,24,393/- out of ₹ 71,19,981/-. When the entire facts were available before the Assessing Officer, it cannot be said that there is a concealment of income or furnishing of inaccurate particulars of income. Moreover, the interest on delayed payment of TDS was placed before the Assessing Officer and the assessee claimed deduction. It does not mean that the assessee has concealed particulars of income. Similarly, details of prepaid expenses of ₹ 1,98,990/- were also available before the Assessing Officer. Short term capital gain, the assessee retired from partnership firm with effect from 19.08.2008 and received a lump sum compensation from partnership firm over and above the capital contribution by way of immovable property. This was considered to be a short term capital gain. The fact remains that the assessee retired from partnership firm and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. D.R. and the Ld.counsel for the assessee. We find that there was sufficient cause for not filing the appeal before the stipulated time. Therefore, we condone the delay and admit the appeal. 3. Let s first take assessment year 2009-10 in I.T.A. No.2382/Chny/2016. 4. Shri Sailendra Mamidi, the Ld. Departmental Representative, submitted that during the course of assessment proceeding, the Assessing Officer disallowed ₹ 1,66,96,393/- towards insurance receipts and ₹ 90,86,349/- towards business expenditure. According to the Ld. D.R., the Assessing Officer also made disallowance under Section 14A of the Income-tax Act, 1961 (in short 'the Act') to the extent of ₹ 5,34,393/- and prepaid expenditure of ₹ 1,98,990/-. The Assessing Officer also disallowed interest on the delayed payment of TDS to the extent of ₹ 11,687/- and capital gain to the extent of ₹ 47,07,30,598/-. The Assessing Officer found that the assessee surrendered his Life Insurance Policy on 31.01.2009 and received a sum of ₹ 3,26,73,685/-. According to the Ld. D.R., the assessee in fact, took the policy on 20.04.2005 for ₹ 2 Crores and paid a premium of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommercial Tax Officer (1985) 154 ITR 148, therefore, the CIT(Appeals) is not justified in allowing the claim of the assessee. 6. On the contrary, Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the assessee is engaged in the business of lottery. According to the Ld. counsel, the Assessing Officer made additions to the total income by disallowing the claim of the assessee. The assessee has furnished the entire details with regard to insurance receipt, expenditure claim, dividend income, prepaid expenditure and short term capital gain. The Assessing Officer without appreciating the facts, made additions in the assessment proceeding. According to the Ld. counsel, penalty proceeding is different from assessment proceeding. All the additions / disallowances cannot automatically result in levy of penalty. According to the Ld. counsel, the entire transactions were placed before the Assessing Officer and the Assessing Officer after considering the claim of the assessee found that certain claims are not allowable. It does not mean that the assessee has furnished inaccurate particulars of his income or concealed part of his income. Placing reliance on the judgment of A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 71,19,981/- was also disclosed by the assessee and the assessee claimed deduction as provided under Section 14A of the Act. The Assessing Officer by applying Rule 8D of Income-tax Rules, 1962 disallowed ₹ 5,24,393/- out of ₹ 71,19,981/-. When the entire facts were available before the Assessing Officer, it cannot be said that there is a concealment of income or furnishing of inaccurate particulars of income. Moreover, the interest on delayed payment of TDS was placed before the Assessing Officer and the assessee claimed deduction. It does not mean that the assessee has concealed particulars of income. Similarly, details of prepaid expenses of ₹ 1,98,990/- were also available before the Assessing Officer. 9. Coming to the short term capital gain, the assessee retired from partnership firm with effect from 19.08.2008 and received a lump sum compensation from partnership firm over and above the capital contribution by way of immovable property. This was considered to be a short term capital gain. The fact remains that the assessee retired from partnership firm and received a lump sum compensation from the firm. This was disclosed before the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, according to the Ld. counsel, the entire particulars of income and expenditure were available before the Assessing Officer. The Assessing Officer during the course of assessment proceeding, found that certain claims of the assessee as expenditure were not allowable, therefore, according to the Ld. counsel, he made the addition. Merely because the assessee has not contested the disallowance made by the Assessing Officer with regard to the claim of expenditure, according to the Ld. counsel, that will not amount to admission for disallowance, therefore, the CIT(Appeals) has rightly deleted the penalty levied by the Assessing Officer. 14. We have considered the rival submissions on either side and perused the relevant material available on record. It is not in dispute that the assessee has claimed an expenditure of ₹ 2,88,22,870/-., which includes a sum of ₹ 30,00,000/- said to be paid by one Shri Nagarajan to Shri Ramesh Krishan on so-called instruction of the assessee. The fact remains that the assessee has furnished entire details of income and also furnished entire details of the so-called expenditure. The Assessing Officer found that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed income was derived. Moreover, referring to Sections 153A and 153C of the Act, the Ld.counsel submitted that undisclosed income shall be with reference to material found during the course of search operation and the information which is relatable to the material found during the course of search operation. In this case, according to the Ld. counsel, no material was found during the course of search operation. Therefore, what was offered by the assessee as additional income cannot be construed as undisclosed income. Hence, the provisions of Section 271AAB of the Act is not applicable at all. Therefore, according to the Ld. counsel, the CIT(Appeals) has rightly deleted the penalty levied by the Assessing Officer. 19. We have considered the rival submissions on either side and perused the relevant material available on record. Admittedly, there was search operation in the premises of the assessee on 13.01.2015. In the course of search operation, the assessee offered an additional income of ₹ 50 Crores under the head Income from Other Sources . The Assessing Officer levied penalty under Section 271AAB of the Act in respect of the additional income offered by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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