TMI Blog2020 (1) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... essment and penalty proceedings are separate proceedings and therefore, mere addition made in the assessment order is not sufficient for levy of penalty. Against said estimation of income done by the AO CIT(A) has reduced the quantum of estimation of rental income. Therefore, where there is no positive evidence or material beyond doubt of assessee having concealed the particulars of income or furnishing inaccurate particulars of income, mere addition in the quantum proceedings is not sufficient to hold assessee liable for levy of penalty. Levy of penalty on estimated rental income cannot be sustained and is hereby directed to be deleted. Mere disallowance of depreciation claim where all particulars are on record and inadvertent mistake of disclosing the interest income net of TDS instead of gross of TDS in the return of income where both interest income and TDS is apparent from the return of income cannot form the basis for levy of penalty on account of furnishing inaccurate particulars of income and is hereby directed to be deleted. - Decided in favour of assessee. - ITA. No. 744, 745 & 1097/JP/2019 - - - Dated:- 13-1-2020 - Shri Vijay Pal Rao, JM And Shri Vikra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of depreciation on an air conditioner. It was submitted that mere disallowance of claim of depreciation cannot form the basis for levy of penalty by the Assessing Officer and reliance was placed on Hon ble Supreme Court decision in case of Reliance Petro Products. Further, for A.Y 2014-15, it was submitted that the Assessing Officer has levied penalty on non-disclosure of interest income of ₹ 4579/-. It was submitted that the said amount represent the TDS on interest income and the assessee has inadvertently reported the net interest income basis the amount received/credited in his bank account instead of gross interest income. It was accordingly submitted that being an inadvertent mistake, the same should not form the basis for levy of penalty. 4. Per contra, the ld. DR submitted that it is not correct to say that the rental income is basis pure estimation. In fact, the AO has reopened the assessment proceedings basis this very reason and carried out detail examination and basis thereof, the estimation was made and our reference was drawn to the Page No. 8 of the Assessing Officer order for A.Y 2011-12 which reads as under:- The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at the sum of ₹ 5,000/- each and the number of parties are estimated at 10. Thereby, the same results in addition for the sum of ₹ 50,000/-. 11) The total Exhibitions are estimated at 5 numbers for 3 days each @ ₹ 5,000/- per day at the sum of ₹ 75,000/- and One Garba party is estimated on account of Navrataras of Winter for 9 days @ ₹ 5,000/-per day. Thereby, the sum of ₹ 45,000/- is added on account of Garba Party. 12) Considering all above, the sum total of ₹ 4,34,496/- (165000 + 99496 +50000 +75000 +45000) is added on account of the Income of Chitrakoot Plot. Penalty proceedings u/s 271(1) (c) are being initiated on this issue for furnishing inaccurate particulars of the income. It was submitted that similar findings are recorded in other two assessment years. It was accordingly submitted that there is no infirmity in the order of the lower authorities and levy of penalty on rental income may be confirmed. 5. It was further submitted by the ld DR that the air conditioner was used for personal purposes and therefore, there was no basis for clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld CIT(A) has reduced the quantum of estimation of rental income. Therefore, where there is no positive evidence or material beyond doubt of assessee having concealed the particulars of income or furnishing inaccurate particulars of income, mere addition in the quantum proceedings is not sufficient to hold assessee liable for levy of penalty. In this regard, useful reference can be drawn to the decision of Hon ble Rajasthan High Court in case of Mahendra Singh Kedla (DB Appeal No. 174/2010 dated 19.03.2012) wherein it was held as under: 6. We have considered the submissions of learned counsel for appellant and examined the reasons assigned by Appellate Authority as well as Appellate Tribunal for setting aside the penalty order. 7. The appellate authority as well as the appellate Tribunal both considered the matter in detail and by speaking order set aside the penalty levied by Assessing Officer, in the facts and circumstances of the present case. The relevant portion of Para 7 of order of the Tribunal is reproduced as under:- Para 7. ..... ....... ..... ..... ...... ......The enquiry conducted by the AO may lead to arriv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ork in not maintaining those books and details supported with proper vouchers etc. that there was concealment of particulars of income or furnishing inaccurate particulars thereof on the part of the assessee to attract the penal provisions. In view of above discussion and keeping in mind the fact and circumstances of the present case, we are of the view that the ld. CIT(A) was justified in deleting the penalty in absence of positive evidence with the department that there was concealment of particulars of income or furnishing inaccurate particulars thereof on the part of the assessee towards the addition in question. The first appellate order on the isuse is thus upheld. 8. The above finding of the Tribunal makes it clear that additions made by the Assessing Officer were based on estimation only. A fact or allegation based on estimation cannot be said to be correct only, it can be incorrect also. Therefore, in the facts and circumstances of the case, penalty was wrongly levied by the Assessing Officer. The basis for levying penalty in the present case is only estimation, which is purely a question of fact and there is a concurrent finding of fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
