RANJEET D. VASWANI,MUMBAI vs. DCIT 12(3), MUMBAI

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ITA 7231/MUM/2014Status: DisposedITAT Mumbai20 July 2016AY 2006-073 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that claiming deductions not sustainable in law does not amount to furnishing inaccurate particulars of income. Therefore, the penalty levied was set aside.

What were the facts?

The assessee claimed various expenses against rental income from a property. The Assessing Officer disallowed expenses not allowable under Section 24 of the Income Tax Act and levied penalty for furnishing inaccurate particulars of income. The CIT(A) confirmed the penalty.

What were the issues?

Whether claiming non-allowable expenses against rental income constitutes furnishing inaccurate particulars of income for the purpose of penalty under Section 271(1)(c).

Which sections of the Income-tax Act were involved?

Section 24,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” Bench, Mumbai

Before: Shri B.R. Baskaran (AM)& Pawan Singh (JM)

For Appellant: Shri Vimal Punmiya
Hearing: 5.7.2016Pronounced: 20.7.2016

O R D E R Per B.R. Baskaran (AM):-

The appeal filed by the assessee is directed against the order dated 04-07- 2014 passed by learned C I T (A)-23, Mumbai and it relates to the assessment year 2006-07. The assessee is aggrieved by the decision of learned C I T (A) in confirming penalty levied u/s 271(1)(c) of the Act on the disallowance of expenditure claimed against rental income from Dada manzil property.

2.

We heard the parties and perused the record. While computing income from house property in respect of Dada manzil property, the assessee claimed various expenses. However the assessing officer allowed only those expenses, which are allowable under section 24 of the Act. The assessee held 1/3rd share in the property. Accordingly the assessing officer levied penalty on the one third of expenses disallowed by him considering the same as furnishing of inaccurate particulars of income. The learned C I T (A) also confirmed the penalty.

2 Mr. Ranjeet D. Vaswani

3.

The learned A.R submitted that the penalty levied on identical addition made it in the hands of another co-owner Mrs.Vimla Vaswani has been deleted by the coordinate bench of Tribunal in the order passed in dated 29th of January 2010. The learned AR further submitted that the claim made by the assessee, which is not sustainable in law, would not give rise to finality under section 271 (one) (C) of the Act.

4.

On the contrary, the Learned DR placed reliance on the order passed by Learned CIT(A).

5.

Having heard rival submissions, we are of the view that the there is merit in the submissions made by the learned AR. His contentions are getting support from the decision rendered by Honourable Supreme Court in the case of Reliance petro products (321 ITR 158), wherein the Hon’ble Apex Court has held that the deductions claimed, which are not sustainable in law, would not give rise to a case of furnishing of inaccurate particulars of income. Accordingly we set aside the order passed by Learned CIT(A) and direct the assessing officer to delete the penalty levied on the expenses disallowed in respect of Dada Manzil Property.

6.

In the result, the appeal filed by the assessee is allowed. Order has been pronounced in the Court on 20.7.2016

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