UJJAL SINHA,KOLKATA vs. DCIT, CENTRAL CIRCLE 4(1),, KOLKATA

Contrary to that, the ld. DR supports the impugned order thereby submitting that there is no response by the assessee before the lower authorities.

Upon hearing the submissions of the counsels of the respective parties, we have perused the records and find that the addition made by the Assessing Officer was on account of loan given from undisclosed source and disallowance on account of interest on housing loan u/s 24(b) of the Act. It is pertinent to mention here that the assessee filed an appeal before the ld. CIT(A) against the assessment order but the assessee withdrew the said appeal on the ground that it was pending for long time. After confirmation of the order of the Assessing Officer by the ld. CIT(A), the penalty proceedings have been initiated. We further find that the submission of the assessee is that there is no concealment of income or furnishing of inaccurate particulars of income in the present case. We also find that the assessee had given a loan of Rs.71,50,000/- 3 Ujjal Sinha to M/s. Genesis Advertising Pvt. Ltd. and the said loan was given out of the funds received from the sale of house property by the assessee which was sold during the A.Y 2010-11 by the assessee and the sale proceeds was transferred to fixed deposit by the assessee and also during the A.Y 2011-12 the said amount was withdrawn from the fixed deposit and loan was given to the company M/s. Genesis advertising Pvt Ltd. It is pertinent to note that the assessee submitted that details of sale deed executed for transfer of property, statement of fixed deposit showing transfer of sale proceeds, bank statement of Indian Bank reflecting the transaction of the said loan of Rs.71,50,000/- with M/s. Genesis Advertising Pvt Ltd. We also note that the loan was given by the assessee to the said company through proper banking channel and duly recorded in the books of account of the assessee. With regard to the deduction of Rs.1,50,000/- claimed in the return of income u/s 24(b) of the Act on account of payment of interest on housing loan, we note that said deduction was available only in respect of loan taken for purchase of house property and the assessee provided true and fully disclosure of details of income, loan details etc. We have gone through the cited decision of CIT vs. Reliance Petroproducts Pvt. Ltd. (supra), wherein the Hon’ble Apex Court has held as under:

It was tried to be suggested that Section 14A of the Act specifically excluded the deductions in respect of the expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. It was further pointed out that the dividends from the shares did not form the part of the total income. It was, therefore, reiterated before us that the Assessing Officer had correctly reached the conclusion that since the assessee had claimed excessive deductions 4 Ujjal Sinha knowing that they are incorrect; it amounted to concealment of income. It was tried to be argued that the falsehood in accounts can take either of the two forms; (i) an item of receipt may be suppressed fraudulently; (ii) an item of expenditure may be falsely (or in an exaggerated amount) claimed, and both types attempt to reduce the taxable income and, therefore, both types amount to concealment of particulars of one's income as well as furnishing of inaccurate particulars of income.

We do not agree, as the assessee had furnished all the details of its expenditure as well as income in its Return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the Return or not. Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty under Section 271(1)(c). If we accept the contention of the Revenue then in case of every Return where the claim made is not accepted by Assessing Officer for any reason, the assessee will invite penalty under Section 271(1)(c). That is clearly not the intendment of the Legislature.” 6.1 Considering the above discussion and following the decision of Hon'ble Supreme Court, we hold that the penalty levied u/s 271(1)(c) of the Act is not justified in the case of the assessee as the assessee disclosed all relevant particulars of its income and there was no concealment of facts or filing of inaccurate particulars of income and also the authorities below have not brought any material to show that the assessee has concealed any particulars of its income or furnished inaccurate particulars. We, therefore, reverse the orders of authorities below and delete the penalty imposed under Section 271(1)(c) of the Act.

In the result, the appeal filed by the assessee is allowed.