WWW.TAXSCAN.IN - Simplifying Tax Laws आयकर अपीऱीय अधिकरण, मुंबई न्यायपीठ “ए” मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE HON’BLE S/SHRI JOGINDER SINGH (JM), AND RAJESH KUMAR,(AM)
आमकय अऩीर सं./I.T.A. No.95/Mum/2015 (ननधधायण वषा / Assessment Year :2008-09) Dy.Commissioner of Income Tax , 5(3)(2), Room No.573, 5th floor, Aayakar Bhavan, M K Road, Mumbai-400020 (अऩीरधथी /Appellant)
बनाम/ G C Property P.Ltd., th Vs. 5 floor, Bhupati Chambers,
13 Mathew road, Mumbai-400004
..
(प्रत्मथी / Respondent)
स्थधमी रेखध सं ./जीआइआय सं ./PAN No. : AACCT7446G अऩीरधथी ओय से / Appellant by:
Shri H M Wanare
प्रत्मथी की ओय से/Respondent by
Shri Deepak Whia
सुनवधई की तधयीख / Date of Hearing
: 18.7.2016
घोषणध की तधयीख /Date of Pronouncement : 10.10.2016 आदे श / O R D E R Per RAJESH KUMAR, Accountant Member:
This is an appeal filed by the revenue and it is directed against the order of the Ld. CIT(A)-9, Mumbai dated 16.10.2014 pertaining to A.Y.200809. 2.
The issue raised by the revenue in this appeal is against the deletion of
penalty of Rs.22,54,792/- by the ld. CIT(A) as imposed by the AO under section 271(1)( c ) of the Income Tax Act, 1961 without appreciating the
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fact that the assessee has deliberately offered the rental income under the head “Income from Business” and furnished wrong income. 3.
The facts of the case are that the assessee filed its return of income
on 13.9.2008 declaring loss of Rs.48,854/- which was revised on 9.3.2002 declaring a loss of Rs.68,74,346/-. During the scrutiny proceedings, the AO completed the assessment proceedings u/s 143(3) of the Act vide order dated 8.12.2010 by assessing the income of the assessee at Rs.5,60,000/against the returned loss at
Rs.68,74,346/-. The assessee has let out its
property on leave and license to M/s ABG Shipyard Ltd on a monthly rent at Rs.50,000/- and also received interest free deposits
of Rs.12,00,00,000/-
from the tenant and the income shown from the rental income as income from business and also claimed deprecation on Rs.68,54,882/-. The AO rejected the contention of the assessee by treating the same as income from house property thereby disallowed the depreciation and administrative expenses as claimed by the assessee. market value u/s 22(1)(a) by determined rental income
The AO has also determined the fair
adding 7.5% on security deposit and
at Rs.67,20,000/- and finally held that the
assessee filed inaccurate particulars of income by filing inaccurate particulars of income by showing the income received under different head and shown in other head, therefore, levied penalty at the rate of
100% of the tax
sought to be evaded and made penalty of Rs.22,54,792/- u/s 271(1)(c) of the Act. Aggrieved by the order of AO, the assessee preferred and appeal
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before the ld.CIT(A) who deleted the penalty levied by the AO by observing and holding as under :
“5. DECISION: 5. 1 I have carefully and dispassionately considered the facts and circumstances of the case, penalty order u/s .271 (1)(c) as well as the submissions and arguments of the Ld.A.R.. It is seen that the A.O. has levied penalty u/s.271(1)(c) of the I.T.Act, on the ground that the appellant has furnished inaccurate particulars of income because the rental income was wrongly claimed as business income. 5.2. On the other hand it was submitted by the appellant that the A.O. has taken a different view on the income disclosed as business income which has been assessed as income from house property, therefore, it was pleaded that penalty u/s.271(1)(c) is not attracted under the circumstances of this case. The A.O. has not accepted the plea of the assessee and has levied 100% penalty of the tax sought to be evaded on both the above additions. It is just a case of difference of opinion regarding the head of income. The appellant has also relied upon various case laws in this regard, holding that when the income declared under the head is assessed under different head by AO, then penalty ujs.271(1)(c) is not justified. 5.3. Under these circumstances, after considering the rival submission, it is noted that the appellant company was incorporated for the business of real estate, therefore, on this premise it is claiming that it was decided to claim the rental income as business income, so it cannot be held that by claiming the rental income as business income during this year, the appellant has either furnished inaccurate particulars of income or concealed any material facts. Merely, because during the year under consideration the A.O. has different opinion on this issue, the penalty u/s.271(1)(c) on such debatable issue cannot be held justified. Therefore, penalty on this addition on account of disallowance depreciation as the income declared as Business income has been assessed as income from house property, cannot be upheld, hence the same is directed to be deleted. 4.
Aggrieved by the order of ld.CIT(A), the revenue is in appeal before us.
Before us the ld. DR submitted that the assessee has deliberately shown the income from
the house property as business income under the head
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business income and suppressed the income by claiming the depreciation and other administrative expense these facts is also corroborated that the assessee has received rental income of Rs.50,000/- per month while accepting the huge security deposit of Rs.12,00,00,000/- from the tenant. Finally, the ld. DR submitted that the order of ld.CIT(A) be set aside and that of AO be restored. 5.
The ld.AR reiterated the same submissions as made
before the
ld.CIT(A) and relied on the order of first appellate authority. The ld. AR also contended that the findings of the ld.CIT(A) is based on legal provisions and hence, the order of the ld. CIT(A) be confirmed. 6.
We have considered the rival submissions and perused the materials
on records including the orders of authorities below. The assessee was incorporated for the purpose of real estate business as per the main objects in memorandum and articles of association of the assessee company. The building of the company was let out and the rental received from the letting out by way of leave and license basis was shown as business income on the ground that the assessee’s business was of real estate and expenses such as administrative and depreciation were claimed accordingly. The AO assessed the income of the assessee under the head “House Property” as against the business income showed by the assessee and as a result disallowed all the expenses including deprecation claimed by assessee. The AO also imposed penalty u/s 271(1)© of the Income Tax Act equal to 100% of the tax sought to be evaded for furnishing inaccurate particulars of income. The ld CIT(A)
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deleted the penalty by holding that provisions of section 271(1)(c) of the Act were wrongly invoked as it was a case of difference of opinion and the issue was debatable one. In our opinion the ld conclusion drawn by the FAA was correct as the assessee has shown full particulars of income in the return of income itself and mere fact the income shown under one head of income was assessed by the AO under the other head could not be taken as tantamount to filing inaccurate particulars. Therefore the order of FAA is correct and does not required to be disturbed or interfered with. Accordingly we uphold the same by dismissing the appeal of the revenue. 7.
In the result, the appeal of the revenue is dismissed. The above order was pronounced in the open court on 10th Oct, 2016.
घोषणध खर ु े न्मधमधरम भें ददनधंकः 10th Oct,2016 को की गई । Sd
sd
(JOGINDER SINGH) Judicial Member
( RAJESH KUMAR) Accountant Member
भुंफई Mumbai: 10th Oct, 2016.
व.नन.स./ SRL , Sr. PS
आदे श की प्रतिलऱपप अग्रेपिि/Copy of the Order forwarded to : 1. अऩीरधथी / The Appellant 2. 3. 4. 5.
6.
प्रत्मथी / The Respondent.
आमकय आमुक्त(अऩीर) / The CIT(A)- concerned आमकय आमक् ु त / CIT concerned
ववबधगीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai concerned गधर्ा पधईर / Guard file. आदे शधनुसधय/ BY ORDER, True copy
सहधमक ऩंजीकधय (Asstt. Registrar) आमकय अऩीरीम अधधकयण, भुंफई /ITAT, Mumbai
