SH. PREM LAKHOTIA,NEW DELHI vs. ITO, NEW DELHI

ITA 2703/DEL/2014Status: DisposedITAT Delhi07 October 2015AY 2009-103 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 the penalty was not warranted as the assessee's explanation for not disclosing the rental income was bona fide. The assessee did not claim any deductions or TDS credit related to this income, and even with the income, the total income remained below the taxable limit.

What were the facts?

The assessee declared a business loss and set it off against capital gains and house property income. The Assessing Officer noted that the assessee failed to disclose rental income, which was reflected in AIR information, attributing it to a clerical error.

What were the issues?

Whether the penalty levied for non-disclosure of rental income was justified, considering the assessee's explanation and the overall tax liability.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC-2’, NEW DELHI

Hearing: 09.09.2015Pronounced: 07.10.2015

ORDER PER J.S. Reddy, A.M. This is an appeal by the Assessee against the order dated 25.02.2014 of the Ld. CIT(A)-XXIII, New Delhi.

The facts brought out at para 2 of Ld. CIT(Appeals) order page 2 which is extract for the reference :- “2. Assessment in this case was completed u/s 143(3) of the Act and during the course of assessment proceedings, Assessing Officer noted that assessee had declared business loss of Rs. 2,60,794/- and set off this loss from Income shown under the heads- Capital Gains of Rs. 23,270/- and Income from House Property of Rs. 4,200/- and carried forward the remaining loss of Rs. 2,33,324/-. Further, it was noted by the Assessing Officer that assessee failed to disclose the rental income of Rs. 1,70,600/-received from SABS Architects & Engineers (P) Ltd. which was duly found reflected in the AIR information

2 Prem Lakhotia relevant to the assessee. In this respect, it was submitted by the assessee that rental income could not be disclosed due to clerical error.”

On appeal the first appellate authority confirmed the order of the Assessing Officer. Further aggrieved the assessee is in appeal.

After hearing rival contention, I am of the considered opinion that the levy of penalty is not warranted in this case as the explanation furnished by the assessee in my opinion is bona fide. The charge that the assessee tried to de fraud the Revenue is false for the reason that, the assessee has neither reported the rental income, nor claimed deduction from the same of interest paid on loan nor claimed credit of tax deducted at source from this income. At page 22 of the paper book, the assessee has filed the revised competition which, demonstrates that even after considering the said income assessed total income is below taxable limit. 5. Under these circumstances, I delete the penalty levied and allow the appeal of the assessee. 6. In the result appeal of the Assessee is allowed. (Order Pronounced in the Court on 07/10/2015). Sd/- (J.S.Reddy) ACCOUNTANT MEMBER Dated: 07 /10/2015 *B.Rukhaiyar* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR

Date Initial 1. Draft dictated on 1.10.2015 2. Draft placed before author 1.10.2015 3. Draft proposed & placed before the JM/AM second member 4. Draft discussed/approved by Second JM/AM Member. 5. Approved Draft comes to the Sr.PS/PS PS/PS 6. Kept for pronouncement on PS 7. File sent to the Bench Clerk PS 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order.

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