TaxTMI 
TaxTMI 
2011 (8) TMI 630
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....of Rs. 1,40,760 under section 271(1)(c) of the Income-tax Act, 1961. 2. The appellant craves leave to add, alter, amend or delete any grounds of appeal." 2. The only issue involved is sustaining the penalty under section 271(1)(c) of Rs. 1,40,760 under Income-tax Act, 1961. 3. Assessee is a private limited company and deriving income from business of Colour Photo Lab and income from house property. The original return of income was filed on 2-12-2003 declaring income at Rs. 3,81,900. The return was revised on 31-3-2004 and income declared was nil. The assessee has let out a property situated at D-190, Okhla Industrial Area Phase-I, New Delhi. This property was a leased property from DDA. During the relevant financial y....
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....house tax paid and vide letter dated 27-11-2006, the assessee admitted to pay tax on Rs. 15,04,200 claimed as subletting charges. As per the scheme of the Income-tax Act, Income from House Property is to be computed under section 23 and 24 of the Act. Proviso to section 23 provides for deduction of 'taxes' levied by the local authority. The provision of the Act are clear in this regard and 'subletting charges' are not an admissible deduction by any stretch of imagination. Hence, it is not a case of wrong claim, but is a case where a false claim has been made by the appellant. Hence, the penalty provisions of section 271(1)(c) are clearly attracted in this case. Ld. AR has relied on various case laws. However, the facts of the present case....
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....ors [2008] 306 ITR 277. In such a case it is difficult to accept the plea that error was bona fide. In view of the above discussion, I find that the Assessing Officer was justified in imposing the penalty under section 271(1)(c) of the Act. The same, therefore, upheld." 4. We have heard both the sides at length and after hearing both the sides, we hold that the original return filed by the assessee on 2-12-2003 and no claim of sub-letting charge was made. The return was subsequently revised on 31-3-2004 by claiming the sub-letting charges paid to DDA. These subletting charges were pertaining to period from 26-10-1999 to 26-2-2004. The financial year period relevant to assessment year under consideration is 1-4-2002 to 31-3-2003. Thus thes....
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....me of filing the original return of income assessee himself has not made such claim which shows that assessee was under the firm belief that such claim is not allowable in the law. The proviso to section 23(1) clearly provides that only the taxes levied by and paid to any local authority in respect of the property could be deducted in determining the annual value of the property. Assessee acted as per law at the time of filing original return. Facts show that taxes were also paid accordingly. In the revised return, assessee made a claim which is an ex-facie bogus claim. Since assessee fails to establish that it was made under the legal advice, we have no hesitation to say that assessee deliberately by filing the revised return made a claim ....
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....vision. It was not a case where two opinions about the applicability of section 35D were possible. Therefore, it could not be a case of a bona fide error on the part of the assessee. The relief under section 35D of the Act was confined only to an existing industrial undertaking for extension or for setting up a new industrial unit. It was, thus, not a "wrong claim'" preferred by the assessee, but was a clear case of 'false claim". The matter was remitted back to the Assessing Officer for determining the penalty afresh attributing the conduct relating to claim under section 35D of the Act only as attracting penalty proceedings. (iii) That as far as the claim of capital loss was concerned, the assessee was absolved by the authorities below o....