TaxTMI 
TaxTMI 
2016 (9) TMI 379
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....Income" which was declared under the head "Income from House Property" in the return filed in the re-assessment proceedings u/s 148 of the Act and assessed accordingly. 4. Facts of the case are that the original return of income was filed on 20.11.2006 declaring total income of Rs. 81,060/-. The said return of income showed income which was derived from letting out of office premises under the head "Business and Profession" and after charging various expenses the net income returned amounted to Rs. 1,44,562/- and after claiming the set off of brought forward losses the net income came Rs. 81,060/-. The said return was processed u/s 143(1) on 7.4.2009. Thereafter, the AO noticed that the assessee credited rental income amounting to Rs. 8,21,124/- from letting out office premises in the profit and loss account and also claimed expenses to the tune of Rs. 6,98,439/-. In the assessment year 2008-09, the similar income from rental of premises was assessed under the head "Income from House Property" and the assessee accepted the action of the AO by not filing appeal before the first appellate authority. The AO reopened the assessment for the current year i.e. assessment year 2006-07 b....
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....the appellant company had the services of a qualified chartered accountant at his disposal and despite this fact the rental income from let out the property has been declared under the head profits and gains from business and professions and deduction of expenses were claimed and further the carry forward business loss was also adjusted. It has been further stated by the AO that if the reassessment proceedings had not been initiated by issue of notice u/ s 148 the appellant would have been successful in evading incidence of tax on the income earned by it during the instant assessment year. The AO has relied on the recent judgment of the Supreme Court in the case of MAK Data (P) Ltd. Vs. CIT 358 ITR 593 besides other jugments discussed supra. According to the A/R of the appellant there are two views possible in such cases because it is debatable issue that whether income from letting out of property is income from house property or business income for which he has relied on some judgments which have been discussed supra. It has been further stated by him that the original return was the correct return of income and it is only to avoid long drawn litigation the revised return was ....
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....r submitted that the penalty under section 271(1)( c ) could not be imposed in the case of change of Heads of Incomes as in the assessee's case. The ld. Counsel submitted that initially the assessee showed rental income from letting out the office premises under the head "Income from Business or profession" by claiming expenses against the said income. However, later on when the notice u/s 148 issued by the AO to the assessee, the assessee changed head of income from "business" to " house property" with same particulars of income. The ld.counsel also submitted that in the assessment year 2008-09, the income was assessed by the AO under the head "income from house property" and the assessee did not file any appeal against the decision of the AO and thus reached finality. The assessee following the same parameter returned the income under the head "Income from House Property" in the return of income filed to the response to notice u/s 148 of the Act issued by the AO in order to avoid protected litigation. In defence of his arguments, the ld. AR relied upon the following decisions: a. Mimosa Investment Co.(P) Ltd V/s ITO (2009) 28 SOT 0470 =(2010) 6 ITR 0789 (Mum); b. ITO V/s Ro....
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....n amounted to filing inaccurate particulars of income and liable for penalty u/s 271(1)(c). In our opinion, the assessee has fully disclosed all the particulars of income in the return of income filed which can not be termed as inaccurate particulars by the assessee for the income. We are of the considered views that it could not be construed as filing of inaccurate particulars of income. In the case of Mimosa Investment Co.(P) Ltd (supra) it has been held as under : "The assessee has disclosed all the relevant material facts for the purpose of computation of total income and has offered explanation in this regard, which was not found false by the Assessing Officer. The explanation of assessee regarding claim of interest expenditures is bona fide. The assessee has substantiated his explanation. When the assessee has furnished all the material facts for the purpose of computation of total income the Assessing Officer is duty bound to calculate correct total income in accordance with law, which may be different than the total income calculated by the assessee. Mere fact that the Assessing Officer while discharging his duty is recalculating the total income in accordance with law w....