S. P. Swaminathan v. Assistant Commissioner of Income-tax, Circle -2, Coimbatore
[Citation -2016-LL-0923-125]

Citation 2016-LL-0923-125
Appellant Name S. P. Swaminathan
Respondent Name Assistant Commissioner of Income-tax, Circle -2, Coimbatore
Court ITAT-Chennai
Relevant Act Income-tax
Date of Order 23/09/2016
Assessment Year 2009-10
Judgment View Judgment
Keyword Tags concealment of income • real estate business • estimate basis
Bot Summary: The learned counsel for the assessee submitted that the assessee was in the business of plying vehicles and in Real Estate. In the case before us, according to the learned counsel for the assessee, it is not the case of the revenue that the assessee has concealed any part of the income or furnished inaccurate particulars of income. The Assessing Officer found that the expenditure claimed by the assessee was highly excessive and restricted the expenditure by disallowing the claim of the assessee to the extent of Rs.60,00,000/-. Since the assessee has furnished all the particulars and merely because of expenditure claimed by the assessee was partly disallowed by the assessing officer, there cannot be any concealment of income or furnishing 3 I.T.A. No.2122/Mds/2016 inaccurate particulars of income. The assessing officer found that the expenditure claimed by the assessee was highly excessive and accordingly disallowed the portion of expenditure to the extent of Rs.60,00,000/-. The assessee claimed before the Assessing Officer that he agreed for addition before the Assessing Officer. The question arises for consideration is when the assessing officer disallowed part of the expenditure claimed by the assessee in real estate business, can we say that the assessee concealed any part of his income or furnished inaccurate particulars of such income This issue was elaborately considered by the Apex Court in Reliance Petro Products Ltd. and found that when the assessee has furnished all the particulars of his income and the expenditure merely because part of the expenditure claimed by the assessee was disallowed, it cannot be said that there was a concealment of any income or furnishing inaccurate particulars of income.


IN INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA No. 2122/Mds/2016 Assessment Year : 2009-10 S.P.Swaminathan, v. Assistant Commissioner of Income C/o. Shri S.Sridhar, Advocate, Tax, Circle -2, 112/1, Periyar Street, Coimbatore. Erode 638001. PAN No. AHXPS 5015K ( Appellant) ( Respondent) Appellant by : Shri S.Sridhar, Advocate [Erode] Respondent by : Shri Supriyo Pal, JCIT Date of Hearing : 09.08.2016 Date of Pronouncement : 23.09.2016 O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: This appeal of assessee is directed against order of CIT(A) -3, Coimbatore dated 23.05.2016 and pertains to Assessment Year 2009-10 confirming penalty levied by assessing officer under Section 271 (1) (c) of Act. 2 I.T.A. No.2122/Mds/2016 2. Shri S.Sridhar, learned counsel for assessee submitted that Assessing Officer levied penalty of Rs.19,89,777/- under Section 271(1)(c) of Act. learned counsel for assessee submitted that assessee was in business of plying vehicles and in Real Estate. assessee claimed expenditure of Rs.1,46,32,609/- in respect of real estate business. In course of assessment proceedings, Assessing Officer find that expenditure claimed by assessee towards real estate business was very high. Accordingly, lump sum of Rs.60,00,000/- was disallowed. assessee explained before Assessing Officer that expenditure was disallowed on estimate basis. Therefore, there cannot be any penalty under Section 271(1)(c) of Act. learned counsel for assessee further submitted that penalty can be levied under Section 271(1)(c) for furnishing inaccurate particulars of income or for concealment of any part of income. In case before us, according to learned counsel for assessee, it is not case of revenue that assessee has concealed any part of income or furnished inaccurate particulars of income. assessee incurred expenditure in real estate business and same was claimed as deduction in return of income after furnishing all particulars. Assessing Officer found that expenditure claimed by assessee was highly excessive and restricted expenditure by disallowing claim of assessee to extent of Rs.60,00,000/-. Since assessee has furnished all particulars and merely because of expenditure claimed by assessee was partly disallowed by assessing officer, there cannot be any concealment of income or furnishing 3 I.T.A. No.2122/Mds/2016 inaccurate particulars of income. Therefore, penalty levied by Assessing Officer as confirmed by CIT(A) is not correct. 3. learned representative for assessee placed reliance on judgment of Apex Court in case of CIT Vs. Reliance Petroproducts (P) Ltd. reported in 322 ITR 158 (SC). 4. On contrary, Shri Supriyo Pal, learned department representative submitted that assessee claimed expenditure of Rs.1,46,32,609/- for real estate business. assessing officer found that expenditure claimed by assessee was highly excessive and accordingly disallowed portion of expenditure to extent of Rs.60,00,000/-. assessing officer found that expenditure was disallowed on estimate basis because exact amount could not be quantified. It does not mean that assessee has not concealed any part of income. assessee claimed before Assessing Officer that he agreed for addition before Assessing Officer. Therefore, penalty cannot be levied. Agreement or concession given by assessee cannot be reason for not levy of penalty. When Assessing Officer established that assessee has concealed part of income by claiming excessive expenditure in real estate business, it is to be construed that assessee has concealed part of his income. Therefore, Assessing Officer has rightly levied penalty. Hence, CIT(A) has rightly confirmed penalty levied by Assessing Officer. 4 I.T.A. No.2122/Mds/2016 5. We have considered rival submissions on either side and also perused material available on record. Assessing Officer has disallowed sum of Rs.60,00,000/- claimed by assessee as expenditure in real estate business as excessive. Assessing Officer found that assessee has furnished inaccurate particulars which resulted in understatement of taxable income. Therefore, he levied penalty of Rs.19,89,777/-. fact remains is that assessee disclosed entire income and claimed expenditure in real estate business. expenditure claimed by assessee was partly disallowed by assessing officer. Therefore, question arises for consideration is when assessing officer disallowed part of expenditure claimed by assessee in real estate business, can we say that assessee concealed any part of his income or furnished inaccurate particulars of such income? This issue was elaborately considered by Apex Court in Reliance Petro Products (P) Ltd. (supra) and found that when assessee has furnished all particulars of his income and expenditure merely because part of expenditure claimed by assessee was disallowed, it cannot be said that there was concealment of any income or furnishing inaccurate particulars of income. In this case also, assessee has furnished all particulars of his income and part of expenditure claimed by assessee to extent of Rs.60,00,000/- was disallowed by Assessing Officer as highly excessive. Therefore, this Tribunal is of considered opinion that expenditure claimed by assessee towards real estate business cannot be construed as concealment of any income or furnishing inaccurate particulars of income. assessee made claim towards expenditure after 5 I.T.A. No.2122/Mds/2016 furnishing all particulars. Therefore, by any stretch of imagination, it could be said that assessee furnished inaccurate particulars of income or concealed any part of his income. In other words, claim made by assessee cannot be basis for levy of penalty under Section 271(1)(c) of Act. Therefore, penalty levied by assessing officer is not justified. Accordingly, orders of lower authorities are set aside and penalty levied by assessing officer is deleted. 6. In result, appeal of assessee stands allowed. Order pronounced on 23rd September, 2016 at Chennai. Sd/- Sd/- (A. Mohan Alankamony) (N.R.S. Ganesan) Accountant Member Judicial Member Chennai, Dated, 23rd September, 2016. sp. Copy to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT, 5. DR 6. GF. S. P. Swaminathan v. Assistant Commissioner of Income-tax, Circle -2, Coimbatore
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