2019 (6) TMI 1221

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..../2015 for assessment year 2009-10, by proposing the following question stated to be a substantial question of law: "Whether the Appellate Tribunal was right in law and on facts in deleting the penalty of 78,00,000/- levied u/s 271(1)(c) of the Act, 1961 since had no assessment been made, such inaccurate particulars of income would not have come to notice?" 2. In this case, assessment under section 143(3) was completed on 28.12.2011 determining total income at Rs. 43,90,40,483/- as against the returned income of Rs. 35,37,58,700/- as an addition of Rs. 8,58,81,783/- was made on multiple counts. Subsequently, the assessee went in appeal before the Commissioner (Appeals), who confirmed the addition of Rs. 2,61,38,474/- and deleted ....

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....at it was an inadvertent mistake. It was submitted that in case like the present one, where the assessee has given incorrect details and when it was cornered, it corrected the mistakes, the Assessing Officer was wholly justified in levying penalty under section 271(1)(c) of the Act. Reference was made to the decision of the Delhi High Court in the case of Commissioner of Income Tax v. Zoom Communication P. Ltd., [2010] 191 Taxmann 179 (Delhi), wherein it has been held that the court cannot overlook the fact that only a small percentage of the income tax returns are picked up for scrutiny. If the assessee makes a claim which is not only incorrect in law but is also wholly without any basis and the explanation furnished by him for making such....

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.... the same. It was submitted that the impugned order passed by the Tribunal is contrary to the principles laid down in the above decision and hence, the appeal deserves consideration on the question of law as proposed or as may be deemed fit by this court. 4. This court has considered the submissions advanced by the learned senior standing counsel for the appellant and has perused the orders passed by the Assessing Officer, Commissioner (Appeals) as well as the Tribunal. 5. As can be seen from the impugned order, the Tribunal while deleting the penalty, has recorded the following findings: "9. So far as the first two additions of Rs. 1,30,869/- and Rs. 1,01,956/- are concerned, we have noted that the assessee has, on it's own,....

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....ad purchased the building and land for Rs. 5,93,47,914/- and the stamp duty valuation of land was Rs. 1,10,99,970/-. While there is no building valuation on record, based on the above facts, the building being treated at the value of Rs. 5 crores is not an outright absurd claim as, even after reducing the stamp duty valuation of land, the building value at Rs. 4,83 crores does seem reasonable from that perspective - even though that is not legally correct, as held by the co-ordinate bench. The fact that building was demolished is a subsequent event, and adopting the stamp duty valuation figures in broad terms may result in disallowance of depreciation but the claim has some basis. Keeping in view these discussions, in our considered view, t....