TaxTMI 
TaxTMI 
2016 (9) TMI 544
X X X X Extracts X X X X
X X X X Extracts X X X X
....l expenses. For this disallowance the AO has also levied penalty u/s.271(1)(c). 3. It was argued by ld. AR that assessee has furnished full particulars of expenditure so incurred and accordingly disallowance of some of the expenditure will not amount to concealment of any particulars so as to attract penalty u/s.271(1)(c). 4. On the other hand, ld. DR relied on the order of lower authorities. 5. We have considered rival contentions and found from the record that assessee is a firm engaged in the business of finance and investment and real estate development. The assessee has been pursuing the development of Bahar property which continued during the entire financial year 2006-07. A part of such property had been leased during the sa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....see being in the business of real estate business, professional fees are required to be incurred. Merely disallowance of such expenses will not amount to concealment of particulars by the assessee. All particulars with respect to incurring of expenditure was on record, genuineness of expenses were also not doubted by the AO. The facts of the instant case is pari materia with the facts decided by the Tribunal in the case of Township Real Estate Developers (India)(P) Ltd., 51 SOT 411, wherein it was held that assessee has not concealed any particulars of income or furnished inaccurate particulars thereof. The question regarding allowability of certain expenses from house property was at least debatable during the relevant point of time. Accor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....articulars and on the basis thereof, made certain claims which have been found purely as a question of law to be not sustainable. In the present case, Explanation 1(8) is inapplicable. This is in view of the fact that it is an admitted position that the respondent has neither concealed any particulars of income nor furnished inaccurate particulars of income. Explanation 1(8) would apply only where an assessee has concealed the particulars of his income or has furnished inaccurate particulars of income. Explanation 1(8) provides that in such cases if the reasons given for the concealment or furnishing of inaccurate particulars of income are found to be unsubstantiated or not bona-fide, the amount added or disallowed in computing the total....
X X X X Extracts X X X X
X X X X Extracts X X X X
....would embrace the meaning of the details of the claim made. It is an admitted position in the present case that no information given in the return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. 11. The learned counsel argued that "submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income". We do not think that such can be the interpretation of the words concerned. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly cov....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er of the two forms; (I) an item of receipt may be suppressed fraudulently; (ii) an item of expenditure may be falsely (or in an exaggerated amount) claimed, and both types attempt to reduce the taxable income and, therefore, both types amount to concealment of particulars of one's income as well as furnishing of inaccurate particulars of income. 20. We do not agree, as the assessee had furnished all the details of its expenditure as well as income in its return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the return or not. Merely because the assessee had claimed the expenditure, which claim was n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mitted by the assessee in its return." (emphasis supplied) The Supreme Court also held that it was only on the point of mens-rea that in Union of India & Ors. vs. Dharmendra Textile Processors & Ors, the Supreme Court over-ruled the earlier judgment of the Supreme Court in Dilip N. Shroff vs. Jt. CIT, (2007) 2911TR 519. 13. Mr.Malhotra submitted that Explanation 1(8) to Section 271(1) mandates the levy of penalty even where a claim for deduction is not upheld, even though the assessee has disclosed all material facts and has not suppressed any material facts. He submitted that a view to the contrary would render explanation.1(8) nugatory. His only response to the judgment of the Supreme Court in ClT vs.' Reliance Petroproducts Pvt....