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2016 (3) TMI 504 - ITAT DELHIPenalty u/s 271(1)(c) - inaccurate particulars of income - contract awarded to the assessee was not for civil construction, erection and plant and machinery and therefore the claim u/s 44BBB of the Act was incorrect and also the fees for supervision of erection, testing and commissioning of material were taxable u/s 44D on gross basis @20% u/s 115A - Held that:- The claim of the assessee has not been accepted because of legal interpretation of provision of statute and resulted into confirmation of additions. Admittedly assessee has placed on record the contract awarded to it of Orissa Hydro Power Corporation Ltd which was also for engineering, designing, supervision, commissioning etc. Therefore it cannot be said that claim of the assessee u/s 44BBB is false or malafide. Merely the claim of the assessee was rejected holding that this contract entered in to by the assessee does not satisfy the conditions u/s 44BBB of the Act, assessee cannot be said to have furnished inaccurate particulars of income. It is simply a matter of interpretation of that contract. It is established principle that merely because of the claim of the assessee did not find favour of the assessing authority , it cannot attract a provision of penalty u/s 271(1)(c) of the Act. Furthermore at the time of filing of return the assessee has put a note along with computation of income which fully disclosed the content of the agreement as well the contention of the assessee. In the note it is contended that the assessee satisfied the conditions laid down u/s 44BBB of the Act. Therefore there is adequate disclosure made by the assessee putting forth its contention. Therefore at the most claim of the assessee can be said to be incorrect but not false. See CIT V Reliance Petro products Private Limited [2010 (3) TMI 80 - SUPREME COURT ] wherein held a mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee.- Decided in favour of assessee
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