USHARANI,CHENNAI vs. ACIT, CHENNAI

This appeal by assessee is directed against the order of the Commissioner of Income Tax (Appeals)-19, Chennai, dated 27.11.2014 for the assessment year 2007-08.

The grievance of the assessee in this appeal is with regard to confirming the levy of penalty u/s.271(1)(c) of the Income Tax Act at �1,98,420/-

The facts of the case are that the assessee filed her return of income for assessment year 2007-08 on 20.2.2008 admitting a total income of �3,72,393/-. The source of income has been shown as ‘income from other sources’. As discussed in the case of Shri Mainraj, as a result of the survey/search conducted in the case of M/s Rajarathinam Constructions Pvt. Ltd on 27.2.2008, it was noticed that the assessee had sold a piece of land measuring 3.5 cents situated at Perumbakkam village for a consideration of �6,75,000/-. The relevant details of this transaction are as under:

On appeal, the Commissioner of Income Tax (Appeals) observed that it is an undisputed facts of the case are that the assessee had made the claim of dealers commission and marketing expenses of �5,16,650/- and �2,98,450/- respectively against business I.T.A.No.301/Mds/2015 :- 4 -: income, however, the assessee has not furnished any details of these expenses before the Commissioner of Income Tax (Appeals) nor before the Assessing Officer. It was observed by Commissioner of Income Tax (Appeals) that the aforesaid additions to the income of the assessee, is apparent from the penalty order under appeal, what upheld both by the then Commissioner of Income Tax (Appeals) and the Tribunal. From the facts on records, it is apparent that the assessee had made a wrong claim of the aforesaid expenditure which could not be proven to have been incurred. The aforesaid wrong claim of expenditure resulted in furnishing of inaccurate particulars of income of the assessee resulting in concealment of income. The assessee had not brought any material or evidence or record even during the course of penalty proceedings before the Assessing Officer with regard to incurring of the aforesaid expenses. Before the Commissioner of Income Tax (Appeals) also the assessee has not brought any material or evidence on record to show that the claim of the assessee was a genuine claim. In view of these facts of the case, the Commissioner of Income Tax (Appeals) upheld the penalty levied by the Assessing Officer. Against this, the assessee is in appeal before us.

We have heard both the sides and perused the material on record. In this case, consequent to search /survey action in the case of M/s. Rajarathinam Constructions P. Ltd, the documents relating to the purchase of property by assessee was found and it came to know that M/s. Rajarathinam Constructions P. Ltd purchased land located at Perumbakkam village for �6,75,000/- from assessee. However, the assessee had not admitted long term capital gains in respect of sale of property even after issuance of notice u/s.148 of the Act. The assessee made a wrong claim towards dealers commission at �5,16,650/- and marketing expenses of �2,98,450/- respectively for which no new evidence was produced. This quantum addition was subject matter of appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) allowed the expenditure at �7,00,000/-. However, the findings on this addition was confirmed by Commissioner of Income Tax (Appeals) in its entirety. Admittedly, the assessee was not able to substantiate the claim made by her.

In the result, the appeal of the assessee in ITA