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TMI Blog2015 (7) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... e W.I.P. of ₹ 9,42,319/-. - Decided against revenue. Penalty u/s.271(1)(c) - penalty has been imposed by the A.O. as the income was assessed by him at ₹ 17,14,395/- as against a loss of ₹ 1,680/- shown in the return of income - Held that:- The appellant had given all the particulars regarding the claim in the return of income and the accounts were also presented before the assessing officer. It was his bonafide belief that the he has not earned any income from the activity. The assessing officer did not accept his claim. The addition made by the assessing officer on the basis of estimate does not make the case fit for imposition of penalty. The appellant did not furnish any inaccurate particulars or misrepresented any fact in his return of income. He furnished the return giving all the facts. Where there is no finding that any details were supplied by the assessee in its return of income found to be incorrect or erroneous or false there was no question of invoking the penalty under section 271(1)(c). Mere making of claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 27/08/2007, thereby the Assessing Officer (AO in short) ITA Nos.2695 2696/Ahd/2011 (By Revenue) and CO Nos.286 287/Ahd/2011 (By Assessee ) respectively determined the net profit at ₹ 17,16,075/- as against the total net loss as per P L account. Against the said assessment order, the assessee filed an appeal before the ld.CIT(A), who after considering the submissions of the assessee, partly allowed the appeal, whereby the ld.CIT(A) restricted the profit rate to 8% as against 15% of the contract receipts. 3. The ld.Sr.DR was supported the order of the AO and submitted that the ld.CIT(A) was not justified in reducing the addition. He submitted that the ld.CIT(A) ought to have confirmed the finding of the AO. 3.1. None appeared on behalf of the assessee, however written submission dated 23/03/15 has been filed. 4. We have heard the ld.Sr.DR, perused the material available on record and gone through the orders of the authorities below. The AO has applied 15% of the contract receipts. However, the ld.CIT(A) has restricted the same to 8%. The AO has not given any finding as to what basis of 15% of contract receipts was taken as the profit. The ld.CIT(A) has decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne in view of Board s Circular . WITHOUT PREJDUICE : 2. That the learned CIT(A)-XIV has grievously erred both in law and on the facts of the case in directing the A.O. to estimate the income by applying profit rate 8% on work in progress. 3. That the learned CIT(A) has further erred in taxing the amount received in advance which is not in the nature of income in view of section 4 and also under principle of mutuality the same is not taxable, which may please be allowed. 4. On the peculiar facts and circumstances of the case of respondent, the appeal filed by the department be dismissed. 5. Your Cross objector craves leave to add, alter or amend any of the Cross Objections till the appeal is finally heard and decided. 7.1. Apropos to ground No.1, the assessee has submitted in its written submission dated 23/03/2015 that the appeal is not maintainable due to low tax effect. However, we find that the AO has enclosed a copy of order dated 20/09/2011 giving effect to the CIT(Appeals) s order. As per this order, the revised income is at ₹ 4,24,131/-. However, the assessee in its submission dated 23/03/2015 at page No.23 of the paperITA Nos.2695 2696 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant believing that there is no income as he was constructing the building for its share holder / members did not show any income from the construction activity. The A.O. after examining the information available in the return of income and books of account held that the appellant s income for the assessment year should be worked out after applying a rate of 15% on the total receipts of the appellant. In my opinion the appellant had given all the particulars regarding the claim in the return of income and the accounts were also presented before the assessing officer. It was his bonafide belief that the he has not earned any income from the activity. The assessing officer did not accept his claim. The addition made by the assessing officer on the basis of estimate does not make the case fit for imposition of penalty. The appellant did not furnish any inaccurate particulars or misrepresented any fact in his return of income. He furnished the return giving all the facts. Therefore, there is no ITA Nos.2695 2696/Ahd/2011 (By Revenue) and CO Nos.286 287/Ahd/2011 (By Assessee ) respectively furnishing of inaccurate particulars on the part of the appellant and in the circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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