2019 (4) TMI 1019 - AT - Income Tax

Tribunal grants assessee's appeal for tax years 2005-2008, orders deletion of interest, reassessment, and penalty removal.

M/s. B.R. Sarin And Sons HUF Versus The Deputy Commissioner of Income Tax, Central Circle II (1), Chennai -34.

M/s. B.R. Sarin And Sons HUF Versus The Deputy Commissioner of Income Tax, Central Circle II (1), Chennai -34. - TMI Issues Involved:1. Addition towards accrued interest on investments.2. Estimation of income for the assessment year 2007-08.3. Levy of penalty under Section 271F for the assessment year 2007-08.Analysis:1. Addition towards accrued interest on investments:The appeals by the assessee were against the order passed by the Commissioner of Income Tax (Appeals) for the assessment years 2005-06 to 2007-08. The issue raised was regarding the addition made by the Assessing Officer towards accrued interest on investments. The Tribunal noted that the interest income can only be taxed when received, and since the assessee had not received the interest income during the relevant assessment years, the additions were unjustified. The Tribunal directed the Assessing Officer to delete the estimated interest income amounting to Rs. 27,281 and Rs. 36,000 for the relevant years.2. Estimation of income for the assessment year 2007-08:For the assessment year 2007-08, the Assessing Officer estimated the business income of the assessee at Rs. 3,00,000 due to the belated filing of the return. The Tribunal observed that although the return was filed beyond the due date, the Assessing Officer should have examined the details submitted before making an estimation. The Tribunal directed the Assessing Officer to assess the income as per the belatedly filed return, overturning the estimation made by the Assessing Officer.3. Levy of penalty under Section 271F for the assessment year 2007-08:The penalty under Section 271F was levied on the assessee for not filing the return within the stipulated period. However, the Tribunal considered the circumstances, noting that the assessee had filed the return belatedly and that the penal provisions of Section 271F had been withdrawn. Taking a lenient view, the Tribunal directed the Assessing Officer to delete the penalty of Rs. 5,000 levied under Section 271F.In conclusion, the appeals of the assessee for the assessment years 2005-06 to 2007-08 and the penalty appeal for the assessment year 2007-08 were allowed by the Tribunal, with directions to delete the additions towards accrued interest, reassess the income for 2007-08 as per the belatedly filed return, and remove the penalty levied under Section 271F.