SHREE CENTAL SILK MILLS, MUMBAI V. ITO 14(3)(2), MUMBAI

ITA 5359/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3466 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 25-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VISHWAS JADHAV
• Assessee Lawyers: DHIRENDRA M SHAH
• Keywords: Revised return
• Section: 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E BE NCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER / I .TA NOS.5359 TO 5361/MUM/2014 ( / ASSESSMENT YEAR: 2008-09 TO 2010-11 M/S. SHR E E CENTRAL SILK MILLS, 673, MADHAVRAI LANE, M.J. MARKET, MUMBAI-400 02 / VS. THE ITO 14(3)(2), 6 TH FLOOR, EARNEST HOUSE, MUMBAI-400 021 ./ ./ PAN/GIR NO. AATFS 7036H ( / APPELLANT ) .. ( / RESPONDENT ) / ASSESSEE BY: SHRI DHIRENDRA M. SHAH / REVENUE BY: SHRI VISHWAS JADHAV / DATE OF HEARING :14.03.2016 ! / DATE OF PRONOUNCEMENT :18.5.2016 / O R D E R PER C.N. PRASAD, JM: THESE THREE APPEALS ARE FILED BY THE ASSESSEE CHALL ENGING THE ORDER OF THE LD. CIT(A)-25, MUMBAI DATED 18.6.2014 CONFIRMING THE PENALTY OF RS. 20,250, RS. 46,458/- AND RS. 2,10,64 0/- U/S. 271(1)(C) PERTAINING TO ASSESSMENT YEARS 2008-09 TO 2010-11 R ESPECTIVELY. 2. THE ASSESSEE FIRM ENGAGED IN THE BUSINESS OF TRA DING IN CLOTHES AND ALSO EARNING RENTAL INCOME FROM PROPERTY. THE A SSESSEE FILED RETURN OF INCOME FOR ALL THREE YEARS COMPUTING THE INCOME UNDER THE HEAD BUSINESS. THE ASSESSMENTS WERE REOPENED U/ S. 148 OF THE ACT ITA NOS. 5359 TO 5361/M/2014 2 FOR THE REASON THAT ASSESSEE HAS SHOWN RENTAL INCOM E IN ITS PROFIT AND LOSS ACCOUNT AND ALSO CLAIMED VARIOUS EXPENSES AGA INST SUCH INCOME IN THE PROFIT AND LOSS ACCOUNT. ACCORDING TO THE A SSESSING OFFICER, THE ASSESSEE IS NOT ENTITLED FOR VARIOUS DEDUCTIONS IN COMPUTING INCOME FROM HOUSE PROPERTY. THE ASSESSMENTS WERE COMPLETE D RECOMPUTING THE INCOME OF THE ASSESSEE UNDER THE HEAD HOUSE P ROPERTY. PENALTY PROCEEDINGS U/S. 271(1)(C) WERE INITIATED FOR ALL THE THREE YEARS AND LEVIED PENALTY HOLDING THAT ASSESSEE COMMITTED DEFA ULT WITHIN THE MEANING OF SEC. 271(1)(C) OF THE ACT. 3. THE LD. CIT(A) CONFIRMED THE PENALTY AGAINST WHI CH THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT A SSESSEE PREPARED PROFIT AND LOSS ACCOUNT SHOWING THE RENT A ND ALSO DEBITED CERTAIN EXPENSES IN THE PROFIT AND LOSS ACCOUNT. WH ILE COMING TO THE COMPUTATION, ASSESSEE ORIGINALLY SHOWN THE INCOME S TATED TO BE UNDER BUSINESS AND PROFESSION AND WHILE COMPUTING T HIS INCOME, ASSESSEE ALSO CLAIMED 30% DEDUCTION WHICH IS NORMAL LY CLAIMED UNDER THE HEAD HOUSE PROPERTY TOWARDS REPAIRS AND MAINTENANCE. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT LATER REVISED COMPUTATIONS WERE FILED COMPUTING THE INCOME UNDER THE HEAD HOUSE PROPERTY. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE ISSUE IS NOW AS TO WHETHER PENALTY U/S. 271(1)(C) I S ATTRACTED FOR CONCEALMENT OF INCOME ON THE RECOMPUTATION OF INCOM E UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS AGAINST INCOME FROM BUSINESS SHOWN BY THE ASSESSEE OR NOT. THE LD. COUNSEL FOR T HE ASSESSEE SUBMITS THAT ASSESSEE HAS NOT CONCEALED ANY PARTICU LARS OF INCOME NOR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME . HE FURTHER ITA NOS. 5359 TO 5361/M/2014 3 SUBMITS THAT THE ENTIRE INCOME EARNED BY THE ASSES SEE WAS SHOWN IN ITS PROFIT & LOSS ACCOUNT. HOWEVER, THERE IS A MIS TAKE IN THE COMPUTATION WHERE THE ASSESSEE THOUGH STATED THAT INCOME IS TO BE COMPUTED UNDER INCOME FROM BUSINESS AND PROFESSION HAS TAKEN THE NET PROFIT AS PROFIT AND LOSS ACCOUNT AND CLAIMED 3 0% DEDUCTION TOWARDS EXPENSES AND SHOWN THE INCOME AS BUSINESS I NCOME. HE SUBMITS THAT THIS MISTAKE WAS RECTIFIED WHILE FILIN G REVISED RETURN BY TAKING THE ENTIRE RENTAL INCOME WITHOUT CLAIMING AN Y OTHER DEDUCTIONS EXCEPT 30% U/S. 24 OF THE ACT TOWARDS RE PAIRS AND MAINTENANCE. 5. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITS THA T THE PENALTY NOTICE ISSUED BY THE ASSESSING OFFICER IS NOT SPECI FIC AS TO WHETHER THE NOTICE IS ISSUED FOR CONCEALMENT OF INCOME OR FURNI SHING OF INACCURATE PARTICULARS OF INCOME. THEREFORE, HE SUBMITS THAT IN VIEW OF THE DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF CIT VS MANJUNATHA GINNING AND PRESSING (359 ITR 565), THE NOTICE ITSELF IS BAD IN LAW SINCE THERE IS NO SPECIFIC REASON FOR WH ICH THE NOTICE HAS BEEN ISSUED. THE LD. COUNSEL FOR THE ASSESSEE FUR THER PLACES RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. (322 ITR 158) ESPECIALLY AT PARA-8 ON PAGES 163 & 164 AND SUBMITS THAT WHEN THE ASSESSEE HAS FU RNISHED ALL THE PARTICULARS IN THE RETURN OF INCOME, PENALTY CANNO T BE LEVIED SIMPLY BECAUSE THE ASSESSEE HAS CLAIMED CERTAIN INCORRECT CLAIM OF EXPENDITURE. HE ALSO PLACES RELIANCE ON THE DECISI ON OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS M/S. ADITYA BIRLA NOVA LTD IN INCOME TAX APPEAL NO. 3899 OF 2010 DATED 14.8.20 12 FOR THE ABOVE PROPOSITION. ITA NOS. 5359 TO 5361/M/2014 4 6. THE LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY S UPPORTS THE ORDERS OF THE LOWER AUTHORITIES. HE FURTHER SUBMIT S THAT RECOMPUTATION WAS FILED AFTER ISSUE OF NOTICE OF U /S. 148 OF THE ACT. IN REPLY, THE LD. COUNSEL SUBMITS THAT REVISED COM PUTATIONS WERE FILED BEFORE ISSUE OF NOTICES U/S. 148 OF THE ACT A ND THIS IS EVIDENT FROM THE LETTER DATED 9.2.2012 FILED BY THE ASSESSE E BEFORE THE ASSESSING OFFICER. 7. HEARD BOTH SIDES, PERUSED THE ORDERS OF THE LOWE R AUTHORITIES AND THE DECISIONS RELIED ON BY THE LD. COUNSEL. T HE ASSESSEE CREDITED ITS P&L ACCOUNT WITH THE FOLLOWING INCOMES: ASSESSMENT YEAR RENTAL INCOME INCOME FROM TRADING 2008-09 9,34,528/- --- 2009-10 18,03,829/- 9,82,854 2010-11 35,40,185/- 15,73,149/- 7.1. THIS IS A CASE WHERE THE ASSESSEE INITIALLY FI LED RETURNS REPORTING ITS INCOME UNDER THE HEAD INCOME FROM BUS INESS. THE COMPUTATION OF INCOME FOR THE ASSESSMENT YEAR 2008- 09 IS AS UNDER: PARTICULARS AMOUNT AMOUNT (RS.) AMOUNT (RS.) INCOME FROM BUSINESS & PROFESSION NET PROFIT AS PER PROFIT & LOSS 1.4.207 TO 6.7.2007 1 ST PERIOD 7.7.2007 TO 31.3.2008 2 ND PERIOD 51,658 142,727 194,385 ADD: F.B. TAX 959 ITA NOS. 5359 TO 5361/M/2014 5 FIRM TAX 230725 231,684 426,069 LESS: 30% DEDUCTION 127,821 298,248 TOTAL INCOME 298,248 LESS: TAX PAYABLE BY THE FIRM DIVISIBLE INCOME 92,158 206,090 8. AS IT CAN BE SEEN FROM THE COMPUTATION OF INCOME , ASSESSEE COMPUTED ITS INCOME BY TAKING NET PROFIT AS PER PRO FIT & LOSS ACCOUNT AT RS. 1,94,385/- AND FURTHER DEDUCTION OF 30% WAS CLAIMED. THE ASSESSEE DEBITED ITS PROFIT & LOSS ACCOUNT WITH THE FOLLOWING EXPENSES: 1) FIRM I TAX RS. 2,30,725 2) TELEPHONE RS. 14,759 3) MUNICIPAL TAX RS. 4,48,566 4) BANK CHARGES RS. 854 5) SALARY RS. 66,000 6) F.B. TAX RS. 959 OUT OF THE ABOVE EXPENSES, ASSESSEE ADDED BACK IN ITS COMPUTATION F.B. TAX AND FIRM I TAX AND DEDUCTED 30 % TOWARDS MAINTENANCE EXPENSES AND ARRIVED AT DIVISIBLE INCOM E AND THIS WAS ALLOCATED AMONG THE PARTNERS OF THE FIRM. 9. THE ASSESSEE FILED REVISED COMPUTATION COMPUTING THE INCOME AS UNDER: REVISED COMPUTATION OF TOTAL INCOME INCOME FROM HOUSE PROPERTY RENT INCOME 968248 LESS: MUNICIPAL 448566 519682 ITA NOS. 5359 TO 5361/M/2014 6 TAX LESS: 30% DEDUCTION 155905 LESS:TAX PAYABLE FIRM TOTAL INCOME 363777 122407 DIVISIBLE INCOME 241370 THEREFORE, AS COULD BE SEEN FROM THE ABOVE, INITIA LLY THE ASSESSEE COMPUTED THE INCOME UNDER THE HEAD BUSINE SS AND EVEN IN THIS COMPUTATION THERE ARE MANY ERRORS IN THE SENSE THAT ASSESSEE HAS TAKEN THE STARTING POINT WITH THE INCOME AS PER PROFIT AND LOSS ACCOUNT AND COMPUTED ITS INCOME AND WHILE COMPUTING THE INCOME, HE ALSO CLAIMED DEDUCTION OF 30% WHICH IS ADMISSIBL E U/S. 24 OF THE ACT UNDER THE HEAD HOUSE PROPERTY. IT IS AMPLY CLEAR THAT ASSESSEE ITSELF IS NOT CLEAR THE HEAD OF INCOME UNDER WHICH INCOME IS TO BE SHOWN. THE ASSESSEE MIXED UP THE COMPUTATION UNDER BOTH THE HEADS AND ARRIVED AT SUCH INCOME. WE FIND THAT ASS ESSEE HAS DISCLOSED THE ENTIRE INCOME IN THE PROFIT AND LOSS ACCOUNT, THEREFORE, THERE IS NO CONCEALMENT OF INCOME AS SUCH. HOWEVE R, THERE IS A COMPUTATIONAL ERROR AND PRIMA FACIE IT APPEARS THAT THE ASSESSEE DOES NOT KNOW HOW TO COMPUTE THE INCOME AT ALL AND IT IS ALSO NOT CLEAR AS TO WHETHER THE ASSESSEE HAS TAKEN THE EXPERT ADVICE IN COMPUTING THE INCOME. SO MANY MISTAKES WERE MADE BY THE ASSESSEE IN COMPUTATION OF INCOME, GLARINGLY IT APPEARS THAT TH E ASSESSEE WAS NOT ADVISED BY A TAX PROFESSIONAL. THE ASSESSEE FILED REVISED COMPUTATION RECTIFYING ALL THESE MISTAKES AND SHOWI NG ONLY THE RENTAL INCOME AND CLAIMING 30% DEDUCTION TOWARDS RE PAIRS AND MAINTENANCE ADMISSIBLE U/S. 24 OF THE ACT AND BALAN CE AS TAXABLE ITA NOS. 5359 TO 5361/M/2014 7 INCOME. IT IS THE CONTENTION OF THE ASSESSEE THAT BY MISTAKE IN THE ORIGINAL RETURN, THE ASSESSEE HAS NOT SEGREGATED IN COME BETWEEN DIFFERENT HEADS AND INCOME WAS SHOWN UNDER THE HEAD BUSINESS. AFTER NOTICING THE MISTAKE, ASSESSEE PREPARED AND F ILED REVISED STATEMENT SHOWING THE RENTAL INCOME AS PROPERTY INC OME. IT IS CONTENDED THAT IT IS NOT A CASE THAT ASSESSEE HAS N OT DISCLOSED ITS INCOME FROM PROPERTY AND THEREFORE THERE IS NO CONC EALMENT OF INCOME. 10. IN THE CASE OF M/S. ADITYA BIRLA NOVA LTD (SUP RA),THE BOMBAY HIGH COURT HELD AS UNDER: THE JUDGMENT DOES NOT SUPPORT MR.MALHOTRAS SUBMIS SION THAT EVEN IF AN ASSESSEE HAS DISCLOSED ALL THE PART ICULARS OF HIS INCOME AND HAS NOT FURNISHED INACCURATE PARTICULARS OF HIS INCOME, IT IS MANDATORY UPON THE ASSESSING OFFICER TO LEVY PENALTY UNDER SECTION 271(1)(C) IF A CLAIM IS MADE WHICH IS HELD TO BE UNSUSTAINABLE IN LAW. THE SUPREME COURT MERELY STAT ED THAT WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTR ACTING A CIVIL LAW LIABILITY UNDER SECTION 271(1)(C) READ WITH THE EXP LANATION THERETO. IN OTHER WORDS, ALL THAT THE JUDGMENT HOLDS IS THAT THE CONCEALMENT NEED NOT BE WILLFUL TO ATTRACT PENALTY. HOWEVER TO ATTRACT THE PROVISIONS OF SECTION 271, THE ASSESSEE MUST BE HEL D TO HAVE CONCEALED THE MATERIAL PARTICULARS OR TO HAVE FURNI SHED INACCURATE PARTICULARS. AT THE COST OF REPETITION IN THE PRESE NT CASE, THERE WAS NO CONCEALMENT OF ANY MATERIAL PARTICULARS BY THE R ESPONDENT. NOR DID THE RESPONDENT FURNISH INACCURATE PARTICULARS. THE RESPONDENT DISCLOSED ALL MATERIAL PARTICULARS AND ON THE BASIS THEREOF, MADE CERTAIN CLAIMS WHICH HAVE BEEN FOUND PURELY AS A QU ESTION OF LAW TO BE NOT SUSTAINABLE. IN THE PRESENT CASE, EXPLANA TION 1(B) IS INAPPLICABLE. THIS IS IN VIEW OF THE FACT THAT IT I S AN ADMITTED POSITION THAT THE RESPONDENT 6/11 HTTP://WWW.ITATON LINE.ORG ITXA3899-10 HAS NEITHER CONCEALED ANY PARTICULARS O F INCOME NOR FURNISHED INACCURATE PARTICULARS OF INCOME. EXPLANA TION 1(B) WOULD APPLY ONLY WHERE AN ASSESSEE HAS CONCEALED TH E PARTICULARS OF HIS INCOME OR HAS FURNISHED INACCURATE PARTICULA RS OF INCOME. EXPLANATION 1(B) PROVIDES THAT IN SUCH CASES IF THE REASONS GIVEN FOR THE CONCEALMENT OR FURNISHING OF INACCURATE PAR TICULARS OF ITA NOS. 5359 TO 5361/M/2014 8 INCOME ARE FOUND TO BE UNSUBSTANTIATED OR NOT BONA- FIDE, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL I NCOME WOULD REPRESENT INCOME IN RESPECT OF WHICH PARTICULARS HA VE BEEN CONCEALED. 12. AS WE NOTED EARLIER, THE MATTER IN ANY EVENT ST ANDS CONCLUDED IN FAVOUR OF THE RESPONDENT BY THE JUDGME NT OF THE SUPREME COURT IN CIT VS. RELIANCE PETROPRODUCTS PVT . LTD. (SUPRA) WHERE THE SUPREME COURT CONSIDERED A SIMILAR SITUAT ION. THE RESPONDENT THEREIN HAD DISCLOSED ALL THE FACTS AND THERE WAS NO CONCEALMENT OF INCOME. THE SUPREME COURT NEGATED AN IDENTICAL SUBMISSION. THE JUDGMENT CONSIDERS AND INTERPRETS T HE JUDGMENT OF THE SUPREME COURT IN UNION OF INDIA & ORS. VS. DHAR AMENDRA TEXTILE PROCESSORS & ORS. (SUPRA). THE SUPREME COUR T AFTER SETTING OUT SECTION 271 (1)(C) IN PARAGRAPH 10 HELD AS UNDE R :- 10. ............................................. .................... A GLANCE AT THIS PROVISION WOULD SUGGEST THAT IN OR DER TO BE COVERED, THERE HAS TO BE CONCEALMENT OF THE PARTICU LARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE 7/11 HTTP://WWW.ITATONLINE.ORG ITXA3899- 10 PARTICULARS OF HIS INCOME. PRESENT IS NOT THE CASE OF CONCEALMENT OF THE INCO ME. THAT IS NOT THE CASE OF THE REVENUE EITHER. HOWEVER , THE LEARNED COUNSEL FOR THE REVENUE SUGGESTED THAT BY MAKING IN CORRECT CLAIM FOR THE EXPENDITURE ON INTEREST, THE ASSESSEE HAS F URNISHED INACCURATE PARTICULARS OF THE INCOME. AS PER LAW LE XICON, THE MEANING OF THE WORD PARTICULAR IS A DETAIL OR DET AILS (IN PLURAL SENSE); THE DETAILS OF A CLAIM, OR THE SEPARATE ITE MS OF AN ACCOUNT. THEREFORE, THE WORD PARTICULARS USED IN SECTION 2 71(1)(C) WOULD EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MAD E. IT IS AN ADMITTED POSITION IN THE PRESENT CASE THAT NO INFOR MATION 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 PART ICULARS. 11. THE LEARNED COUNSEL ARGUED THAT SUBMITTING AN INCORRECT CLAIM IN LAW FOR THE EXPENDITURE ON INTER EST WOULD AMOUNT TO GIVING INACCURATE PARTICULARS OF SUCH INC OME. WE DO NOT THINK THAT SUCH CAN BE THE INTERPRETATION OF TH E WORDS CONCERNED. THE WORDS ARE PLAIN AND SIMPLE. IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE ITA NOS. 5359 TO 5361/M/2014 9 PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CA NNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. IN CIT V. ATUL MOHAN BINDAL (2009) 9 SCC 589, WHERE THIS COURT WAS CONSIDERING THE SAME PROVISION, THE COURT OBSERVED THAT THE ASSESSING OFFICER HAS TO BE SATISFIED THAT A PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME. THIS COURT REFERRED TO ANOTHER DECISIO N OF THIS COURT IN UNION OF INDIA V. DHARAMENDRA TEXTILE PROCESSORS AS ALSO THE DECISION IN UNION OF INDIA V. RAJASTHAN SPG. & WVG. MILLS AND REITERATED IN PARA 13 THAT: (ATUL MOHAN BINDAL CASE , SCC P. 597, PARA 13) 13. IT GOES WITHOUT SAYING THAT FOR APPLICABILITY OF SECTION 271(1)(C), CONDITIONS STATED THEREIN MUST EXIST. 19. IT WAS TRIED TO BE SUGGESTED THAT SECTION 14-A OF THE ACT SPECIFICALLY EXCLUDED THE DEDUCTIONS IN RESPECT OF THE EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHIC H DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. IT WAS FURT HER POINTED OUT THAT THE DIVIDENDS FROM THE SHARES DID NOT FORM PAR T OF THE TOTAL INCOME. IT WAS, THEREFORE, REITERATED BEFORE US THA T THE ASSESSING OFFICER HAD CORRECTLY REACHED THE CONCLUSION THAT S INCE THE ASSESSEE HAD CLAIMED EXCESSIVE DEDUCTIONS KNOWING THAT THEY ARE INCORRECT; IT AMOUNTED TO CONCEALMENT OF INCOME. IT WAS TRIED TO BE ARGUED THAT THE FALSEHOOD IN ACCOUNTS CAN TAKE EITHER OF T HE TWO FORMS; (I) AN ITEM OF RECEIPT MAY BE SUPPRESSED FRAUDULENTLY; (II) AN ITEM OF EXPENDITURE MAY BE FALSELY (OR IN AN EXAGGERATED AM OUNT) 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 INC OME. 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 INACCU RATE 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 NO T. MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLA IM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, IN OUR OPINION, ATTRACT THE PENALTY UNDER SECT ION 271(1) ( C ). IF WE ACCEPT THE CONTENTION OF THE REVENUE THEN IN CAS E OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY THE ASSESSING OFFICER FOR ANY REASON, THE ASSESSEE WILL INVITE PE NALTY UNDER ITA NOS. 5359 TO 5361/M/2014 10 SECTION 271(1)( C). THAT IS CLEARLY NOT THE INTENDM ENT OF THE LEGISLATURE. 21. IN THIS BEHALF THE OBSERVATIONS OF THIS COURT M ADE IN SREE KRISHNA ELECTRICALS V. STATE OF T.N. (2009) 11 SCC 687, AS REGARDS THE PENALTY ARE APPOSITE. IN THE AFOREMENTIONED DEC ISION WHICH PERTAINED TO THE PENALTY PROCEEDINGS IN THE TAMIL N ADU GENERAL SALES TAX ACT, THE COURT HAD FOUND THAT THE AUTHORI TIES BELOW HAD FOUND THAT THERE WERE SOME 9/11 HTTP://WWW.ITATONLI NE.ORG ITXA3899-10 INCORRECT STATEMENTS MADE IN THE RETURN . HOWEVER, THE SAID TRANSACTIONS WERE REFLECTED IN THE ACCOUNTS OF THE ASSESSEE. THIS COURT, THEREFORE, OBSERVED: (SCC P. 688, PARA 7) 7. SO FAR AS THE QUESTION OF PENALTY IS CONCERNED THE ITEMS WHICH WERE NOT INCLUDED IN THE TURNOVER WERE FOUND INCORPORATED IN THE APPELLANT'S ACCOUNTS BOOK S. WHERE CERTAIN ITEMS WHICH ARE NOT INCLUDED IN THE TURNOVER ARE DISCLOSED IN THE DEALER'S OWN ACCOUNT BOOKS AND THE ASSESSING AUTHORITIES INCLUDE THESE ITEMS IN THE DEALER'S TURNOVER DISALLOWING THE EXEMPTION PENALTY CANNOT BE IMPOSED. THE PENALTY LEVIED STANDS SET ASIDE. THE SITUATION IN THE PRESENT CASE IS STILL BETTER A S NO FAULT HAS BEEN FOUND WITH THE PARTICULARS SUBMITTED 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 CO URT OVER-RULED THE EARLIER JUDGMENT OF THE SUPREME COUR T IN DILIP N. SHROFF VS. JT. CIT, (2007) 291 ITR 519. 13. MR.MALHOTRA SUBMITTED THAT EXPLANATION 1(B) TO SECTION 271(1) MANDATES THE LEVY OF PENALTY EVEN WH ERE A CLAIM FOR DEDUCTION IS NOT UPHELD, EVEN THOUGH THE ASSESSEE HAS DISCLOSED ALL MATERIAL FACTS AND HAS NOT SUPPRE SSED ANY MATERIAL FACTS. HE SUBMITTED THAT A VIEW TO THE CON TRARY WOULD RENDER EXPLANATION 1(B) NUGATORY. HIS ONLY RE SPONSE TO THE JUDGMENT OF THE SUPREME COURT IN CIT VS. REL IANCE PETROPRODUCTS PVT. LTD. WAS THAT THE SUPREME 10/11 HTTP://WWW.ITATONLINE.ORG ITXA3899-10 COURT HAD FAI LED TO NOTICE EXPLANATION-1 TO SECTION 271(1). ITA NOS. 5359 TO 5361/M/2014 11 14. WE ARE UNABLE TO AGREE. IN ANY EVENT WE ARE BOUND BY THE JUDGMENT OF THE SUPREME COURT. MERELY BECAUSE THE EXPLANATION WAS NOT REFERRED TO IN THE JUDGMENT OF THE SUPREME COURT IN CIT VS. RELIANCE PETROPRODU CTS PVT. LTD., IT CANNOT BE SAID THAT THE JUDGMENT IS PER-IN CURIAM. THE LEARNED JUDGES HAVING EXPRESSLY CONSIDERED THE VERY SECTION, IT CAN HARDLY BE SUGGESTED THAT THEY DID NOT NOTICE A PART OF THE SECTION AND DELIVERED THE JUDGMENT IN IGNORANCE THEREOF MERELY BECAUSE THAT PART IS NOT IN TERMS NOTED IN T HE JUDGMENT. 11. IN THE CASE OF CIT VS RELIANCE PETROPRODUCTS, THE HONBLE SUPREME COURT HELD AS UNDER: A GLANCE AT THIS PROVISION WOULD SUGGEST THAT IN O RDER TO BE COVERED, THERE HAS TO BE CONCEALMENT OF THE PART ICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE PRESENT IS NOT A CASE OF CONCEALMENT OF THE INCOME. THAT IS NOT TH E CASE OF THE REVENUE EITHER. HOWEVER, THE LEARNED COUNSEL FOR RE VENUE SUGGESTED THAT BY MAKING INCORRECT CLAIM FOR THE EX PENDITURE ON INTEREST, THE ASSESSEE HAS FURNISHED INACCURATE PAR TICULARS OF THE INCOME. AS PER LAW LEXICON, THE MEANING OF THE WORD PARTICULAR' IS A DETAIL OR DETAILS (IN PLURAL SENS E) ; THE DETAILS OF A CLAIM, OR THE SEPARATE ITEMS OF AN ACCOUNT. THEREFO RE, THE WORD 'PARTICULARS' USED IN THE SECTION 271(1)(C) WOULD E MBRACE THE MEANING OF THE DETAILS OF THE CLAIM MADE. IT IS AN ADMITTED POSITION IN THE PRESENT CASE THAT NO INFORMATION GI VEN 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, ATLEAST, PRIMA FACIE, THE ASSESS EE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. 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 S UCH CAN BE THE INTERPRETATION OF THE CONCERNED WORDS. THE WORDS AR E PLAIN AND SIMPLE. IN ORDER TO EXPOSE THE ASSESSEE TO THE PENA LTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENA LTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, M AKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISH ING ITA NOS. 5359 TO 5361/M/2014 12 INACCURATE PARTICULARS. IN CIT V. ATUL MOHAN BINDAL [2009] 9 SCC 5891, WHERE THIS COURT WAS CONSIDERING THE SAME PRO VISION, THE COURT OBSERVED THAT THE ASSESSING OFFICER HAS TO BE SATISFIED THAT A PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOM E OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THIS COURT R EFERRED TO ANOTHER DECISION OF THIS COURT IN UNION OF INDIA V. DHARAMENDRA TEXTILE PROCESSORS [2008J 13 SCC 3692 AS ALSO, THE DECISION IN UNION OF INDIA V. RAJASTHAN SPG. & WVG. MILLS [2009 ] 13 SCC 448 AND REITERATED IN PARAGRAPH 13 THAT (PAGE 13 OF 317 ITR) : IT GOES WITHOUT SAYING THAT FOR APPLICABILITY OF SE C. 271(1)(C), CONDITIONS STATED THEREIN MUST EXISTS. 12. THUS IN VIEW OF THE ABOVE DISCUSSION WE HOLD TH AT ASSESSEE HAS NOT CONCEALED ANY INCOME OR FURNISHED INACCURATE PA RTICULARS OF INCOME. WHAT WE SEE IN THE COMPUTATION, IS ONLY THE COMPUTATIONAL ERRORS COMMITTED BY THE ASSESSEE COMPUTING ITS INCO ME BY MIXING UP UNDER BOTH THE HEADS OF INCOME I.E. BUSINESS AS WEL L AS HOUSE PROPERTY. IN THE CIRCUMSTANCES, WE DELETE THE PENA LTY LEVIED U/S. 271(1)(C) OF THE ACT. 13. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH MAY, 2016. SD/- SD/- (RAMIT KOCHAR) (C.N. PRASAD ) ' / ACCOUNTANT MEMBER $ %' /JUDICIAL MEMBER MUMBAI; (' DATED : 18 TH MAY , 2016 . % . ./ RJ , SR. PS ITA NOS. 5359 TO 5361/M/2014 13 !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. *+ ,%%-. , -.! , / DR, ITAT, MUMBAI 6. , /01 / GUARD FILE. / BY ORDER, *% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI