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Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
Before: SHRI G. D. AGRAWAL, HON’BLE & SMT. BEENA A. PILLAI
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘C’, NEW DELHI
BEFORE SHRI G. D. AGRAWAL, HON’BLE VICE PRESIDENT AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER I.T.A. No.2457/Del/2016 (Assessment Year 2011-12) Aditya Malla, Vs. ITO, Wad 1(1), C/o Col. L. B. Malla (Retd.) NOIDA 1796, Sector 29, NOIDA GIR / PAN :ACIPM2637F (Appellant) (Respondent)
Appellant by :Shri Pradip Dinodia. CA Shri R. K. Kapoor, CA Respondent by :Shri T. Vasanthan, Sr. DR
Date of hearing: 11.07.2016 Date of Pronouncement: 27.07.2016 ORDER PER BEENA A. PILLAI, JM: The present penalty appeal has been preferred by the assessee against the order dated 29.02.2016 passed by Ld. CIT(A) NOIDA for the Assessment Year 2011-12 on the following grounds of appeal: “1.0 That the penalty order passed by the Ld.AO and upheld by Hon'ble CIT(A) is bad in law. The provisions of See 271 (1)( c) have been wrongly interpreted and applied in this case.
2.0 That the Ld. AO and consequently CIT(A) has erred in law and on the facts of the assessee's case in not appreciating that when assessee has failed to show complete salary income in return of income, he
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has also not claimed the corresponding tax deducted and deposited on the same and thus it was not concealment of income.
3.0 That the Ld. AO and consequently CIT(A) failed to appreciate that such a mistake of non- disclosure of salary income was under bonafide belief that tax has already been deducted on such salary income and there is no further requirement of disclosing it in return of income and thus it was not concealment of income.
4.0 That the Ld. AO and consequently CIT(A) failed to appreciate that the assessee has voluntarily accepted such income in assessment proceedings and paid the demand in question without going in further appeal although some of the additions were unwarranted.
5.0 That the Ld. AO has erred in law in levying the penalty by treating the credit card expense as income of the assessee which in any way has been paid out of salary income credited in the bank and already assessed to tax.
6.0 That the Ld. AO/CIT(A) has erred in law in levying/confirming penalty on disallowance of housing loan interest and credit card expenses on which no penalty proceedings was initiated in the assessment order.
7.0 Without prejudice to the above grounds, the Ld. AD and consequently CIT(A) has erred in law in not considering tax already deducted and deposited to the credit of central government for levying penalty u/s 271(1)(c), penalty levied and confirmed at Rs.9,99,011/- is bad in law.
8.0 That the Ld. AO and consequently CIT(A) failed to appreciate that for levy of penalty the tax sought to be evaded cannot include the portion of tax already
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deducted and deposited to the credit of central government.
9.0 That Ld. AO/CIT(A) erred in law in levying penalty u/s 271(1)(c) on routine additions made in a grossly illegal manner.
10.0 That without prejudice the penalty levied is highly excessive.”
The facts of the case as recorded by the authorities below are as under: 2.1 The assessee is an individual and had file its return of income on 20.07.2011 disclosing total income of Rs.7,39,676/- under the head income from salary. The assessee had claimed deduction of housing loan interest amounting to Rs.1.50 lacs and deduction u/s 80C at Rs.1,00,000/-, the assessee had claimed TDS at Rs.84,394/-. The case was selected for scrutiny under CASS to examine the contents and difference as per 26 AS and return of income. 2.2 Ld. A.O. after examination, found that the assessee had not disclosed salary income of Rs.30,47,245/ received from two other institutions against which TDS amounting to Rs.7,88,334/-had been deducted. Accordingly, assessee was asked to explain the reasons why the salary of Rs.30,.47,245/- was not shown in the return of income. The Assessing Officer observed that the assessee had claimed interest on housing loan which was in the joint name of Shri Aditya Malla and his wife. He held that the
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assessee is eligible for only 50% of the interest as deduction u/s 24(b) of the Act, which comes to Rs.1,18,244/-. 2.3 Ld. Assessing Officer also observed that the as per AIR information, expenses of Rs,3,12,137/- was made through credit card by the assessee. From the details filed by the assessee, Ld. A.O. observed that an amount ofRs.1,50,843/- was verifiable form the bank account statement. However, the balance could not be verified as the assessee did not submit credit card statement. The Assessing Officer thus, added the difference to the income of the assessee and computed the tax assessable in the hands of assessee as under: Total income as per return Rs.7,39,680/- Add: 1. Undisclosed salary income Rs.30,47,245/- 2. House property loss disallowed Rs. 31,756/- 3. Credit card expenses disallowed Rs. 1,61,294/- 4. Concealment of savings Rs. 12,863/- bank interest. Rs.32,53,158/- Rs.39,92,838/- Assessed income Rs.39,92,830/- Rounded off Rs.39,92,830/-
2.3 The Ld. A.O. initiated penalty proceedings u/s 271(1)(c) of the Act for furnishing inaccurate particulars of salary and for concealment of interest income in the return. He levied 100% penalty which worked out to Rs.9,99,011/-. 3. Aggrieved by the order of the A.O., assessee preferred the appeal before Ld. CIT(A). Before Ld. CIT(A), the
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assessee contended that he was under the bona fide belief that salary received from the employers was included in the return of income and no tax was required to be paid as TDS had already been deducted. The assessee submitted that he was not aware about the interest on S/B account being taxable in nature. 3.1 Ld. CIT(A) did not appreciate the facts that the assessee had not included the salary received from the previous employers during the financial due to bona fide mistake and the interest on saving bank account was missed out as the assessee was not aware that the same being taxable. Ld. CIT(A) did not accept the bona fide mistake on behalf of the assessee as the assessee was not an uneducated person. He confirmed the penalty levied by the Assessing Officer. 4. Aggrieved by the order of Ld. CIT(A), the assessee is in appeal before us now. 5. Ld. A.R. submitted that the penalty has been levied on the following items: i) non disclosure of salary amounting to Rs.30,47,245/- omitted to be included by the erstwhile employer; ii) interest on housing loan proportionately disallowed being Rs.31,756/-; and iii) interest on saving bank account of Rs.12,863/-/- iv) credit card expenses of Rs.1,61,294/-.
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5.1 Ld. A.R. submitted that the assessee is working in hotel industry. During the financial year, relevant to the Assessment Year under consideration, the assessee had shifted his employment thrice. He submitted that such quick change in the employment by the assessee has happened for the first time. The assessee at the time of filing the return, omitted the salary received from the previous employers due to ignorance and he only considered the income received from the last serving employer with whom he was working against which assessee claimed TDS of Rs.84,394/- only. 5.2 Ld. A.R. submitted that it is not the case that no tax has been deducted in respect of salary received by the assessee for his previous employers. From 26AS, the Ld. A.O. has himself observe that the TDS deducted from the salary received from previous employers amounted Rs,.7,88,334/-. He submitted that merely because the assessee omitted to include the salary due to ignorance, cannot be the reason for levy of penalty as sufficient cause, as the tax has been deducted at source from such salary. Ld. A.R. also submitted that the bona fide mistake on behalf of the assessee is established in respect of omission of such salary in the return of income as the assessee had not claimed the TDS deducted from such omitted salary amounting to Rs.7,8,334/-. He placed reliance upon the decision of Hon'ble Supreme Court in the case of Price Waterhouse Coopers Vs CIT 211
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Taxmann 40. Hon'ble Supreme Court has held in para 19 “that even professionals can commit bona-fide inadvertent errors. This can only be defined s human error which we are all prone to make. The caliber and expertise of the assessee has little or nothing to do with the inadvertent error. It should not mean that the assessee is guilty of either furnishing inaccurate particulars of attempting to conceal its income.” 5.3 In respect of interest on housing loan, the Ld. A.R. submitted that it is a legal issue regarding eligibility of claim of interest. He submitted that the Assessing Officer disallowed 50% of interests as the housing loan as the loan was in the joint name of the assessee and his wife. Ld. A.R. further submitted that he Assessing Officer while making addition in respect of interest on housing loan has not recorded his satisfaction and thus has not initiated penalty proceedings on the disallowance made in the assessment order as per law. 5.3 In respect of disallowance on credit card expenses, Ld. A.R. submitted that the assessee had not claimed any such expenses in his return of income. Therefore, no penalty can be levied on any addition so made. He also submitted that in respect of credit card expenses, the Assessing Officer has not recorded his satisfaction and thus has not initiated penalty proceedings on the disallowance.
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On the contrary, Ld. D.R. referred to the written submissions before us in support of his arguments which are reproduced as under: “WRITTEN SUBMISSION ON BEHALF OF REVENUE Regarding Penalty u/s 271(1)(c): The case of the assessee is squarely covered under general provisions of the section 271(1)(c) as well as mischief of explanation 1 to the section 271(1). 1.1 The assessee had concealed salary income from two employers, claimed excess deduction on account of housing loan, unexplained credit card expenses and had not declared the interest income. Therefore, the assessee has concealed income and the particulars furnished by assessee are certainly 'inaccurate'. 1.2 The case is squarely covered by the binding ratio of jurisdictional High Court in case of Commissioner of Income-tax VS. NG Technologies Ltd. [2015] 57 taxmann.com 389 (Del) which has been confirmed by the Hon'ble Supreme Court by way of dismissal of SLP in case of N.G. Technologies (In Liquidation) Vs. Commissioner of Income-tax [2016] 70 taxmann.com37 (SC). 1.3 In this particular case, the Hon'ble Delhi High Court has explained the meaning of 'inaccurate particulars'. Hon'ble HC has stated as under:- "10. The word "concealment" would refer to somewhat malicious and mala fide conduct on the part of the assessee. The expression "inaccurate particulars" is copiously wider and broader and would include cases where particulars furnished are not accurate and which results in avoidance or evasion of tax. In Webster's Dictionary, the word "inaccurate" has been defined as "not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript. The word "particular" means detail or details of a claim or separate items of an account. Thus, the words ''furnished inaccurate particulars" would refer
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to inaccuracy which would cause under declaration or escapement of income. It may also refer to particulars which should have been furnished or were required to be furnished or recorded in the books of account, etc. See CIT v. Raj Trading Co. [1996] 217 ITR 208/86 Taxman 282 (Raj). Inaccuracy or wrong furnishing of income would be covered by the said expression. II In the light of what has been stated by the Hon'ble jurisdictional High Court, it can be seen that the furnished particulars in the present case are certainly 'inaccurate'.
2.1 This case is also covered under the provisions of Explanation 1 to Section 271(1)(c) which reads as under. "Explanation 1. - Where in respect of any facts material to the computation of the total income of any person under this Act,- (A) such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be false, or (B) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, Then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed." 2.2 During assessment proceedings, the assessee has admitted for the addition after detection by the Department. It can be seen that the reply has not offered any valid explanation. Therefore, case of assessee is covered under sub clause (A). 2.3 In fact, during the penalty proceedings also, the assessee stated that it was a human error but has not furnished any valid explanation. 2.4.1 The assessee has not discharged its onus. Jurisdictional High Court
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in case of Commissioner of Income-tax Vs. HCll Kalindee Arsspl [2013] 37 taxmann.com 347 (Del) has laid down the ratio that initial burden of proof is upon assessee to prove that his explanation was bona-fide. The Hon'ble HC also laid down the ratio that this burden can only be discharged by producing cogent material. Hon'ble HC has stated as under:- "8 The assessee had made a wrong claim for deduction under Section 80lA and, therefore, had furnished inaccurate particulars as the claim was not admissible. Sub-clause (B) of the explanation is, therefore, applicable and we have to examine the two conditions whether: (1) The assessee has been able to show that the explanation was bona fide; and (2) Facts and material relating to computation of his income had been disclosed. 9. Onus of establishing that the assessee satisfied the two conditions is on him i.e. the assessee ….. 2.4.2 The Hon'ble HC also laid down the ratio that this burden can only be discharged by producing cogent material. Hon'ble HC has stated as under:- "11 To show and establish bona fides, the assessees had to show some more "tangible material" or basis as to why a clear statutory provision which excludes works contracts was ignored." 3. The case is squarely covered by the binding ratio of jurisdictional High Court in case of Commissioner of Income-tax, Delhi-IV vs. Escorts Finance Ltd. [2009] 183 TAXMAN 453 (DEL). In this case, the Hon'ble HC Delhi has held that if the claim made in return of income appears to be ex facie bogus, it would be treated as a case of concealment or furnishing of inaccurate particulars and penalty proceeding would be justified. In that case, deduction under section 35D was claimed relating to public issue of shares. On appeal, Commissioner (Appeals) deleted the penalty, holding that assessee had not concealed income. ITAT upheld order of Commissioner (Appeals). On further appeal, the Hon'ble HC held the case would attract
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penalty u/s 271(1)(c). The facts and circumstances of the present case are strikingly similar because after the judgment of Hon'ble SC in case of Madras Industrial Investment Corporation Limited (supra), such claim was ex-facie inadmissible. 4. (i) The case is squarely covered by the ratio of co- ordinate bench of ITAT Mumbai in case of S H R Trading Pvt. Ltd. Vs. Deputy Commissioner of Income- tax [2014]-TIOL-1348- ITAT-MUM. (ii) In para 7, the Hon'ble ITAT has held that there is a basic and fundamental difference between a debatable claim and an inadmissible claim i.e. a patently wrong or false claim. In the case of first kind of claim, there can be two opinion as to whether or not the assessee could make such a claim on the basis of certain facts of that particular year. Provisions of the Act do not disentitle the assessee to make such claim. But, in the second type of claim, there is clear and emphatic bar in the Act- assessees are not entitled to claim such expenditure/deduction/rebate/ exemption. Absence of a valid basis for making any claim of deduction, resulting in low tax or no tax, is like going against the letter and spirit of the law. In other words, claims made under the second category have no legs of their own to stand, because such claims are tenable neither legally nor factually. Courts are of the view that disputable claims and inadmissible claims are to be treated differently. (iii) In para 12, the Hon'ble ITAT has taken a note of the settled law position that Courts have held that the object behind enactment of section 271(1)(c) read with the Explanations indicate that the section has been enacted to provide for a remedy for loss of revenue, that the penalty under that provision is a civil liability, that willful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under section 276C of the Act. (iv) The Hon'ble ITAT analysed various judicial pronouncements including the judgment of Hon'ble Madras HC in case of Sharma Alloys (India) ltd.(Mad) (357 ITR 379) = 2013-TIOl- 559-HC-MAD-IT .and
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judgements of Hon'ble Delhi HC in the cases of ECS Ltd.(Del) (336 ITR 162) = 2010-TIOl-287-HC-DEl-IT, Harparshad and Company ltd.(Del) (328 ITR 53), Escorts Finance Ltd.(Del)(328 ITR 44) = 2009-TIOL- 483-HC-DEL-IT and ClT vs. Zoom Communication Pvt. Ltd.(2010-TIOL-361-HC-DEL-IT). (v) In para 17, the Hon’ble ITAT reproduced the relevant portion of judgment of Hon'ble Delhi HC in the case of Zoom Communication Pvt. Ltd.(supra) including the following: "The court cannot overlook the fact that only a small percentage of the income- tax returns are picked up for scrutiny. If the assessee makes a c/.aim which is not only incorrect in law but is also wholly without any basis and the explanation furnished by him for making such a claim is not found to be bona fide, it would be difficult to say that he would still not be liable to penalty under section 271(l)(c) of the Act. If we take the view that a claim which is wholly untenable in law and has absolutely no foundation on which it could be made, the assessee would not be liable to imposition of penalty, even if he was not acting bona fide while making a claim of this nature, that would give a licence to unscrupulous assessees to make wholly untenable and unsustainable claims without there being any basis for making them, in the hope that their return would not be picked up for scrutiny and they would be assessed on the basis of self-assessment under section 143(1) of the Act and even if their case is selected for scrutiny, they can get away merely by paying the tax, which in any case, was payable by them. The consequence would be that the persons who make claims of this nature, actuated by a malafide intention to evade tax otherwise payable by them would get away without paying the tax legally payable by them, if their cases are not picked up for scrutiny. This would take away the deterrent effect, which these penalty provisions in the Act have" (vi) After analyzing the judgments mentioned in sub- para(iv)above, the Hon'ble ITAT held (in para 24) that
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the Courts are distinguishing between the debatable claims and patently wrong/inadmissible claims. They(courts) are of the firm view that if an assessee claims any deduction, he has to substantiate the claim by producing positive evidence- otherwise it cannot escape the rigor of the penal provisions. In other words, penalty u/s 271(1)(c) cannot be imposed because an assessee takes a particular legal stand. But, this does not mean that it can claim wrong deductions or claim without any basis or foundation, because, false, spurious and mendacious claims do not fall under the category of a legal stand. (vii) In para 26, the Hon'ble ITAT has held that just because something is mentioned in the return of income does not prove that the claim made in it is justified and allowable. Filing of return does not tie down the hands of an AO. A final decision depends upon the truthfulness of the particulars of income filed by the assessee. The Hon'ble ITAT interpreted the phrase 'particulars of income' appearing in section 271(1)(c) and remarked that it has to be interpreted as facts leading to correct computation of income and held that whenever any material fact is not filed for correct computation of income or if filed is inaccurate, then penalty has to be imposed. (viii) Hon'ble ITAT in the para 27 stated that bonafide belief of an assessee in making a claim has limited role for deciding the issue of penalty to be imposed u/s.271(1)(c). Fact of the case decide whether such a belief could be treated as bonafide or not. In other words, it can safely be held that if an assessee, disregarding all the relevant facts and circumstances, interprets a section that suits its interest then such interpretation cannot be held bona fide belief. In the garb of the bonafide claim, an assessee cannot escape the levy of penalty. 5. (i) The case is squarely covered by the ratio of co- ordinate bench of ITAT Mumbai in case of M/s Development Credit Bank ltd. vs. Deputy Commissioner of Income Tax [2012]- TIOL-722-ITAT- MUM.
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(ii) In para 7, the Hon'ble ITAT has noted that the assessee is not an ordinary person or a lay man who may not have the proper knowledge of law and changes in the law. The assessee was a well known company carrying on the business in India for the last many years and, further, the assessee's business was dealing in the financial matters and the business decision as taken by the assessee keeping in view the provisions of the Income Tax Act. The assessee was managed by the body of experts. Apart from this, the assessee was also availing the services of the professionals and tax experts in day to day affairs and particularly for tax matters. Therefore, the Hon'ble ITAT held that it was not expected from that assessee that they were not aware of the changes in the Income Tax Act. In the present case, also, the assessee is a well known NBFC company carrying on the business in India for the last many years and, further, the assessee's business is dealing in the financial matters and the business decision are taken by the assessee keeping in view the provisions of the Income Tax Act. The assessee is managed by the body of experts. The assessee was also availing the services of the professionals and tax experts in day to day affairs and particularly for tax matters. Hence, it has to presumed that the assessee was aware of the correct position of law settled by the judgment of Hon'ble SC in case of Madras Industrial Investment Corporation Limited (supra). B. The case of Reliance Petro products Pvt. Ltd. [2010] 322 ITR 158 (SC) = 2010-TIDL-21-SC- IT Does not help the case at hand. The facts of the Reliance Petro products Pvt. Ltd. are not applicable to the facts of the case under consideration. In the matter of the Reliance Petro products Pvt. Ltd., the assessee had made a claim of deduction u/s. 36(1)(iii) of the Act in respect of interest. This deduction had also been claimed by the assessee in the earlier year and the First Appellate Authority (FAA) had allowed the deduction, while the ITAT had restored the issue back to the file of the AD. Deciding the appeal, Tribunal
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held that the assessee had duly filed an explanation giving the reasons for making a claim, that once the assessee offered an explanation the onus would shift on the Revenue to prove that the explanation offered by the assessee was false, that bonafides of the explanation were clearly proved, that no material or evidence was brought on record or pointed out by the DR proving that the Revenue had discharged its onus for proving the falseness of explanation of the assessee, that the assessee had also duly discharged its onus which was cast on the assessee. When the matter travelled up to the Hon'ble Supreme Court, it was observed by the Apex Court that in that case, there was no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false, that such not being the case there would be no question of inviting the penalty under section 271(l)(c} of the Act. However, in the present case, assessee has not only tried to disregard correct position of law settled by Hon'ble SC but also refrained from mentioning the said judgment of the Hon'ble SC in the note furnished along with computation of Income.”
We have perused the orders passed by authorities below and the judgments relied upon by the parties. In respect of penalty levied on salary that was omitted to be declared in the return of income, we observed that the tax has been deducted by the previous employers of the assessee to the extent of Rs.7,88,334/-. On perusal of the return of income filed by the assessee, it is observed that the assessee has not claimed the TDS so deducted by previous employers and has only claimed the TDS in respect of employer from whom he drew his last salary during the end of the financial year relevant to
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Assessment Year under consideration. In such a situation, the possibility of bona fide mistake cannot be overruled. Ld. Assessing Officer has also not made any case against the assessee in respect of TDS not being deducted against the salary drawn during the year under consideration being insufficient. It is also observed that the assessee had fully cooperated during the assessment proceedings and had submitted sufficient details to establish the bona fide mistake that was committed inadvertently. However, the Assessing Officer did not agree to the explanation of the assessee and he initiated penalty proceedings u/s 271(1)(c) of the Act for filing inaccurate particulars of income. 7.1 In our considered opinion, the assessee cannot be made liable for penalty as there is a bona fide mistake of omission in not showing the salary received from the previous employers. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi- criminal proceedings and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. From the ROI filed by the assessee, it has been demonstrated that the assessee has failed to claim the TDS deducted by the earlier employers. The conduct of the assessee supports the explanation tendered and
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therefore, a deliberate omission to include the salary received from previous employer cannot be established. 7.2 We, therefore, respectfully following the decision relied upon by the assessee in the case of Price Water House Coopers Pvt. Ltd. (TS-731-SC-212), are of the opinion that assessee’s conduct cannot be said to be a deliberate act so as to warrant levy of penalty. Accordingly, we delete the penalty levied by the Assessing Officer in respect of omission to disclose the salary received from the previous employers on which TDS had already been deducted by them. 8. Regarding interest on housing loan, it is observed that the Assessing Officer has made addition of Rs.31,756/- in respect of interest on housing loan which has been claimed in excess by the assessee. Ld. Assessing Officer / CIT(A) are of the view that the assessee is eligible for 50% of the interest component of Rs,2,36,488/- u/s 24(b), as the housing loan stands in the joint name of the assessee and his wife. As the assessee had claimed Rs.1.50 lacs in its return of income, and eligible for claiming interest at Rs.1,18,244/-. The Assessing Officer disallowed the difference of balance of Rs.31,756/-. Ld. A.R. also submitted that there is no concealment in respect of interest on housing loan as the employer has also granted the deduction of Rs.1.50 lacs in the form 16A issued by him.
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8.1 On the contrary, Ld. D.R. has referred to the written submissions, reproduced hereinabove. 8.2 We have perused the relevant records placed before us and submissions advanced by both the parties. From the Paper Book filed before us, the assessee has referred page 22 which is the certificate of interest issued by HDFC bank. It has been submitted that the housing loan is in the joint name of his wife as the house property was purchased in the joint name. However Ld. A.R. submitted that the interest was paid by the assessee from his account; therefore the assessee has claimed deduction of total amount in his return of income. Ld. A.R. submitted that the assessee was under the bona fide belief that as he was paying the interest, the deduction should also be claimed by him alone. 9. We find that explanation given by the assessee has not been accepted by the Ld. A.O. for which a penalty cannot believed u/s 271(1)(c) of the Act. Reliance has been placed on the decision of Hon'ble Supreme Court in the case of Reliance Petro Products Ltd. reported in 322 ITR 158 which hold that mere disallowance of any claim will not automatically lead to levy of penalty u/s 271(1)(c) of the Act. Further, there is no material that has been brought on record by the Ld. A.O. to prove that the assessee has consciously concealed any particulars pertaining to his income or has supplied inaccurate particulars deliberately. We are therefore, inclined to
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delete the penalty levied by the A.O. in respect of interest on housing loan. 9.1 In respect of interest earned by the assessee on saving bank account, the disallowance that has been made by the Assessing Officer is to the extent of Rs.12,863/-. Ld. A.R. has submitted that the assessee has been filing his return without any professional assistance and was not aware about the interests so earned on saving bank is taxable in the hands of the assessee. Therefore, explanation advanced by the assessee cannot be accepted as such interest on saving bank accounts is credited to the assessee’s bank account during every financial year. It cannot be a case where assessee has been consistently filing his returns personally was ignorant that interest so earned from saving bank being taxable. The explanation tendered by the assessee is not acceptable for the simple reason that the assessee has been filing his return every year and interest on saving bank account accrues to assessee in every assessment year. We, therefore, upheld the penalty levied by the Ld. A.O. on such interest on saving bank account. 9.2 In respect of credit card expenses, it is observed from the assessment order that the assessee had made expenses of Rs.3,12,137/- as seen from the AIR information, through credit card. On calling for the details by Ld. A.O., assessee submitted the bank account
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and was not able to submit the credit card statement for verification of such expenses. Ld. A.O. has verified the expense amounting to Rs.1,50,843/- which appears in the bank statement. As the remaining expense have been Rs.1,61,294/- for the expenses made through credit card which was not verifiable, the same was added to the income of the assessee. 9.3 It has been observed that the addition had been made for want of evidence / explanation. As the assessee has not submitted proper explanation in support of expenses made through credit card. We do not find any infirmity in levying penalty on such amount. In view of above, we confirm the penalty levied by the Assessing Officer for submitting wrong explanation in respect of credit card expenses. 10. Accordingly, the Grounds of appeal filed by the assessee in respect of salary and interest on housing loan stand partly allowed and we confirm the penalty levied by the Assessing Officer in respect of interest on saving bank account and credit card expenses. 11. In the result, appeal filed by the assessee stands partly allowed. Order pronounced in the open court on 27th July, 2016.
Sd./- Sd./- (G. D. AGRAWAL) (BEENA A. PILLAI) VICE PRESIDENT JUDICIAL MEMBER Date: 27.07.2016 /Sp.
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