2009 (11) TMI 1033 - AT - Income Tax

Summary

Issues:
1. Penalty under section 271(1)(c) of the Income-tax Act, 1961 for claiming inadmissible expenses under the wrong head of income.

Analysis:
The case involved an appeal by the assessee against the penalty levied by the Assessing Officer under section 271(1)(c) of the Income-tax Act, 1961, which was confirmed by the Ld. CIT(A). The assessee had initially declared rental income under the head "Income from Business," which was later changed to "Income from House Property" by the CIT(A). The penalty was imposed for claiming inadmissible expenses like depreciation, repairs, and other expenses under the wrong head of income. The assessee contended that the income was duly disclosed in the books of account and was derived from properties used for business activities. The counsel for the assessee argued that it was not a case of concealment or furnishing inaccurate particulars of income, citing judicial decisions and referring to a specific case where a similar penalty was canceled.

The Tribunal noted that there was a genuine difference of opinion regarding the taxability of the income under a specific head. It was observed that the assessee had made full disclosure of all facts related to the income computation, indicating that it was not a case of non-disclosure. Therefore, the Tribunal concluded that the penalty under section 271(1)(c) was not justified in this situation and canceled the penalty imposed by the CIT(A). The appeal filed by the assessee was allowed, and the decision was pronounced in open court on 18th November 2009.