TaxTMI 
TaxTMI 
2012 (9) TMI 136
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....roceeded to dispose of the appeal after hearing the ld. DR. 3.. Facts, in brief, as per relevant orders are that return declaring income of Rs. 73,73,806/- filed on 31.10.2006 by the assessee, was selected for scrutiny with the service of a notice u/s 143(2) of the Income-tax Act, 1961, (hereinafter referred to as the Act) issued on 11th October, 2007. None responded to this notice. In response to a show cause notice alongwith notice u/s 143(2) and 142(1) of the Act, the ld. AR on behalf of the assessee sought adjournment for 18th August, 2008 ,when none appeared. In response to subsequent show cause notice dated 3rd September, 2008, the assessee submitted a detailed reply along with revised return declaring income of Rs. 1,28,20,913/-. Since the revised return was beyond the time prescribed u/s 139(5) of the Act, i.e. beyond the period of one year from the end of the relevant assessment year, this return was treated as invalid return. During the course of assessment proceedings, the Assessing Officer (A.O. in short) noticed that the assessee declared gross rental income of Rs. 9,05,071/- whereas certificate issued in Form No.16A by Unitech Ltd., New Delhi and M/s Iquara Telcoms I....
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.... Cost price 33,90,400/- Capital Gain 19,19,979/-" 3.3 Since total capital gain on sale of properties as pr the aforesaid computation worked out to Rs. 24,44,229/- as against Rs. 13,93,279/- shown in the return, the AO added the difference and initiating penalty u/s 271(1)(c) of the Act for furnishing inaccurate particulars of capital gain. 3.4 Though, the assessee reflected short term capital gain on sale of shares to the extent of Rs. 47,10,726/-,in response to show cause notice, the assessee reflected following working of short term capital gain:- Gain on sale of shares (STT Paid) Rs.47,09,951/- Add Dividend u/s 94(7) Rs. 1,61,278/- Total: Rs.48,71,229/- 3.5 Beside in the return filed on 31st October, 2006, the assessee claimed exemption of long term capital gain to the extent of Rs. 1,17,67,514/- u/s 10(38) of the Income-tax Act, 1961. However, in response to show cause notice, the assessee revised the claim of exemption to Rs. 76,68,595/- ,resulting in taxable long term capital gain of Rs. 40,98,919/-. Inter alia, penalty proceedings were also initiated u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income. 3.6 Apart from above, the AO disallowe....
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....n the next year and hence, as per the assessee also, ownership of the property was with the assessee in this year and hence, if we apply the legal position strictly rental income for the period from December, 2005 to March, 2006 is also taxable in the hands of this assessee only but we find that three other aspects are also very much important. One aspect is the tax impact. As per the tax impact of the impugned addition of Rs. 4,63,388/- in the present year, it is worked out by the assessee at Rs.l,09,184/- after deducting 30% as per the provisions of section 24 of the Act and the tax was determined at Rs. 97,312/- @ 30% of Rs. 3,24,372/-and after making addition of surcharge and education cess, total tax payable is of Rs. 1,09,184/-. It is the submission of the Ld AR of the assessee that in case, we decide this issue in favour of the assessee, the Assessing Officer may be directed to disallow credit of TDS from the rental income of these four months from December, 2005 to March, 2006 which is amounting to Rs. 82,482/ - . Hence, the net tax impact comes to Rs. 26,702/ -. The second important aspect is that the claim of the assessee has been accepted by the Assessing Officer also in....
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....he case of the. assessee in next year and also in the hands of the buyer for the present year because rent income cannot be assessed in the hands of both i.e, the present assessee and the buyer to whom rent is transferred by this assessee but one aspect is not clear as to whether that assessee has included this amount in his taxable income or not because as per the certificate on page No.3-4 of the paper book, that party is certifying that they have received the net amount of Rs. 572806/ - and did not claim TDS credit but there is no mention that they had included this amount in taxable income as per the return of income filed. Hence, we find that if this amount has been declared as income by that party , than the same should not be added in the hands of this present assessee to avoid multiple consequential rectifications without any tax gain to the revenue and also because the revenue has accepted this claim in next year and as per the decision of Hon'ble Punjab & Haryana High Court in the case of CIT v. Reita Biscuits Co. (supra), different stand cannot be taken in this year but for this, the Assessing Officer has to find out as to whether the buyer has declared this income o....
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....ed by bank in the next year being interest for 1.2.2006 to 31. 7.2006. The Assessing Officer could have brought to tax such interest income in the present year for 1.2.2006 to 31.3.2006 but this was not done even than, it cannot be said that the assessee was not earning income in this period. Now, the question is whether for the interest bearing borrowed funds which was utilized for earning interest income, deduction on account of interest payment is allowable only to the extent of actual interest income thereon or the whole amount of interest payment should be allowed. In our considered opinion, when the interest bearing borrowed funds have been utilized by the assessee for earning interest income which is taxable under the head income from other sources, deduction on account of full payment of interest is allowable to the assessee and it cannot be restricted to the extent of actual interest income only. Hence, we delete the disallowance of interest expenditure confirmed by learned CIT(A). This ground of the assessee is allowed." 5. Meanwhile on receipt of order of the ld. CIT(A), in response to a show cause notice before levy of penalty, the assessee pleaded that return was revi....
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.... order of the AO, levying penalty. 8. We have heard the ld. DR and gone through the facts of the case. As is apparent from the aforesaid facts, the AO levied penalty u/s 271(1)(c) of the Act in respect of an amount of Rs. 60,39,824/-comprising addition on account of rental income-Rs.4,63,388/-;disallowance of interest-Rs.2,51,507/-,addition towards short term capital gains on sale of properties-Rs.10,50,950/-;short term capital gains on sale of shares-Rs.1,60,503/- and long term capital gains-Rs.40,98,919/-. The ld. CIT(A) cancelled the penalty on the ground that disallowance of interest was deleted by the ITAT while issue relating to addition towards rental income had been restored to the file of the AO and additional income towards capital gains on sale of properties and shares was disclosed by the assessee suo motu during the course of assessment proceeding. The assessee submitted revised return since in the original return long term capital gain on UTI liquid plus fund institution plan was claimed exempt u/s 10(38) of the Act as also to reflect correct figures of sale of land at Kheri Sadh and rental income. Merely because the assessee disclosed additional income suo motu afte....
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....at the assessee had concealed the income had furnished inaccurate particulars of such income. The burden shifts to the assessee only if he fails to offer any explanation for the undisclosed income or offers an explanation which is found to be false by the Assessing Officer. 8.1 In Qudai International vs. Income Tax Officer 2009 (13) MTC 622 (Trib), the ITAT Lucknow Bench 'A' held that "mere raising of query by the Assessing Officer did not amount to detection of concealment. It cannot therefore, be said that the revised return was filed after detection of concealment and was not voluntary. The term "detection" itself implies the Assessing Officer had reached a conclusion but the query raised by the Assessing Officer was only first step in detection of concealment. If the assessee voluntarily revised the return, it could not be said that it does not fulfill requirements of section 139(5) of the Act." The facts of the present case are also similar to the facts of the aforesaid referred to case. 8.2 Similarly, in the case of Dy. CIT vs. Tarun Agarwal 2009 (13) MTC 831, the ITAT Lucknow Bench 'A' held that "the assessee had surrendered the amount before any specific d....