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Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI
Before: SHRI R.C. SHARMA & SHRI PAWAN SINGH
This appeal is filed by the assessee against the order of CIT(A), Mumbai for A.Y 2006-07, in the matter of imposition of penalty u/s. 271(1)(c) of the Income Tax Act, 1961.
Rival contentions have been heard and record perused. The AO has levied penalty with respect to income offered in the return as ‘income from business’ which was treated by the AO as ‘income from other sources’. By changing head of income AO disallowed some of the 2 M/s. Mustang Properties Pvt. Ltd.
expenses under the head ‘administrative expenses’, ‘auditor’s remuneration’ and ‘interest on car loan’. The AO has also disallowed set-off of carry forward business loss amounting to Rs.2,62,183/- because of change of head of income. Thus, we found that penalty has not been levied for concealment of income or furnishing of inaccurate particulars of income but merely on the plea of change of head from ‘income from business’ to ‘income from other sources’. We do not find any justification for the penalty so levied insofar as there is neither furnishing of inaccurate particulars of income nor concealment of any particulars.
From the record we found that in computing income from property, assessee had arrived at annual letting value after deducting the expenditure on amenities provided to the occupant being deductible in determining the annual letting value. The AO opined that the same was not deductible. He, therefore, disallowed the claim for deduction partially. Such disallowance of expenditure claimed under no circumstances can be said to be concealment of income. Similarly, in respect of financing activity carried out by the assessee, offered under the head ‘income from business’, the AO differed with the same and assessed the income as ‘income from other sources’ resulting into disallowance of some of expenses. This was purely a difference of opinion and under no circumstances, it can be said that there was concealment. The assessee had not concealed any income and hence no penalty is leviable.
3 M/s. Mustang Properties Pvt. Ltd.
In view of the above, we do not find any justification for penalty so confirmed by CIT(A) u/s. 271(1)(c).
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 30th March, 2016.