2014 (12) TMI 17

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....as justified in imposing penalty under section 271(1)(c) of the Income Tax Act, 1961, is the finding of the Tribunal. 3] Mr. Shah, learned counsel, appearing on behalf of the assessee in support of this appeal submits that in the course of assessment year namely 200405, in the balance sheet the assessee had declared the cost of Flat No.401 and 402 having total carpet area of 1785 sq.ft. This flat is located in the 4th floor at Vile Parle in the building known as Ganesh Ashish. This flat was acquired in the previous year. The claim of the assessee was that he was a tenant of the property over which the building Ganesh Ashish was constructed and in consideration for surrender of tenancy rights to enable demolition and construction of flats....

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....case, we are not impressed by any of these contentions. True, it is that the revenue has to prove that the ingredients or preconditions based on which imposition of penalty is permissible, are present and that is why the penalty is imposed. True, it is that the limited assistance can be derived from the quantum proceeding in such matters but one finds in the facts and circumstances of the present case, that the foundation or basis on which the assessee before us claimed the benefit was highly doubtful and questionable. The Assessing Officer, the Commissioner of Income Tax (Appeals) and the Tribunal all concurrently found that the explanation which was furnished by the assessee falls miserably short of the required standard in that it is not....

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....e are of the opinion that the Tribunal rightly held that this was a fit case for imposition of penalty. The entire explanation with regard to the tenancy rights, if surrendered has not been found to be true. Even in penalty proceedings, the assessee was not able to give a satisfactory explanation that the claim made by him in the return of income was bonafide and that he had declared all the material facts for computation of income. It is in these circumstances that the penalty was held to be justified. The facts and circumstances of the present case were clearly distinguishable from the judgments and which have been noted by the Tribunal in para10 of its order. 7] Even the principle relied upon in case of Anantharam must be applied in t....