TMI Blog2021 (7) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... art of the assessee. As such, the details/informations contained in the return of income /financial statements /audit report which are not correct according to truth, and were furnished by the assessee with the dishonest intent shall be treated as inaccurate particulars. We find that it cannot be alleged that the assessee has furnished inaccurate particulars of income with respect to the liabilities which ceased to exist in the books as alleged by the Revenue. It is because the assessee in the subsequent year has made the payment of such liabilities. This fact can verified from the copies of the ledgers which are available on record. Accordingly, it cannot be concluded that the assessee has furnished inaccurate particulars of income and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax(Appeals)-2, Vadodara, dated 16/08/2017 arising in the matter of penalty order passed under s. 271(1)(c) of the Income Tax Act, 1961 (here-in-after referred to as the Act ) relevant to the Assessment Year 2013-2014. 2. The assessee has raised the following grounds of appeal: 1. The learned CIT (Appeals)-2, Vadodara grossly erred in law and on facts in upholding penalty of ₹ 2,32,240/- u/s.271(1)(c) in respect of addition of ₹ 2,11,575 for Cessation of liability and addition of ₹ 5,00,000 in respect of Income from other sources. 2. The learned CIT(Appeals) erred in not appreciating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the same was duly recorded in the books of accounts. However, the same was not offered to tax inadvertently in the income tax return under the bona fides believe. As such, the assessee has made the disclosure of the same in his books of accounts. In view of the above the assessee requested to drop the penalty proceedings initiated under section 271(1)(c) of the. 4.3 However, the AO disregarded the contention of the assessee by observing that the assessee has furnished the inaccurate particulars of income and concealed the particulars of income and levied the penalty of ₹ 2,32,240/- being 100% of the amount of tax sought to be evaded . 5. Aggrieved assessee preferred an appeal before the learned CIT (A) who confirmed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cross Road, Ahmedabad. The property was sold by Shri Manibhai Chhaganbhai, Partner of M/s Tirupati Associates to Shri Mam'shbhai Thakorbhai Shah. This amount was not disclosed by the appellant in the return of income. When the AO raised the query, the appellant claimed that he had incurred legal expenses of ₹ 17,500/- and cost of construction of godown at ₹ 4,46,320/- and hence the income was not disclosed. Undisputedly, the appellant has never disclosed these facts in the return of income and also failed to furnish documentary evidences in respect of above claim of expenditure. In fact, the appellant has tried to mislead the department by not disclosing income of ₹ 5,00,000/- consciously and hence I hold that the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and concealed the particulars of income with respect to the above items of addition as discussed aforesaid. The term inaccurate particular of income has not been defined under the provisions of section 271(1)(c) or elsewhere in the Act the Act. However, the meaning of the term inaccurate has been discussed by the Hon ble Supreme Court in the case of Reliance Petroproducts (P) Ltd reported in 189 taxman 322 wherein it was held that the term inaccurate signifies deliberate act or omission on the part of the assessee. As such, the details/informations contained in the return of income /financial statements /audit report which are not correct according to truth, and were furnished by the assessee with the dishonest intent shall be treated as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be concluded that the assessee has furnished inaccurate particulars of income and thus question of penalty under section 271(1)(c) of the Act does not arise. 9.2 Regarding the addition made for ₹5 lakhs on account of the money received by the assessee as confirming party, we find that the assessee contended that such receipt was duly recorded in the books of accounts which were subject to audit. The contention of the assessee was not was not challenged by the authorities below. In view of the above, we are of the opinion that the assessee has made sufficient disclosures in the financial statements. Therefore, the assessee should not be penalized on account of the mistake committed by him inadvertently as discussed above. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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