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TMI Blog2015 (11) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... within the scope of the deeming provisions of section 2(22)(e) based on the particulars furnished by the assessee. It is not a case where assessee can be said to have concealed or furnished any wrong or false particulars about the transaction. Hon’ble Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd.(2010 (3) TMI 80 - SUPREME COURT) has held that unless there is a finding that any of the details or particulars supplied by the assessee in its return are found to be incorrect or erroneous or false, it would not invite the penalty under section 271(1)(c) of the Act merely because the claim made in the return of income has been found to be unsustainable. In the present case, factually speaking, the situation is of a vary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the assessed income, which has prompted the Assessing Officer to levy penalty under section 271(1)(c) of the Act is a sum of ₹ 7.00 lacs, which has been assessed to tax as deemed dividend under section 2(22)(e) of the Act. In this context, brief facts are that the assessee was found to have received a sum of ₹ 7.00 lacs from M/s. Classic Credit Ltd., which was treated by the Assessing Officer as a deemed dividend within the meaning of section 2(22)(e) of the Act. The said addition made by the Assessing Officer has become final, as stated by the Ld. Representative for the assessee before us. 3.1 Subsequently, vide order dated 28/03/2005, the Assessing Officer treated the assessee guilty of concealing the particulars of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as no deliberate intention to conceal the impugned income, the Ld. Representative for the assessee contended that the assessee and the group companies have declared incomes for assessment year under consideration of substantial amounts and in comparison the impugned sum of ₹ 7.00 lacs was an insignificant figure. Therefore, it could not be said that assessee had had deliberately not treated the impugned sum as an assessable income in the return of income filed. In this context he has also referred to the incomes returned by the assessee in the preceding two assessment years to demonstrate that the taxable incomes have been returned in excess of ₹ 1.00 crore each and, therefore, it could not be alleged that assessee had conscious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 2(22)(e) qua the said transaction is concerned there is no dispute. No doubt, assessee contended before the income-tax authorities that the other concern i.e. M/s. Classic Credit Ltd. was also engaged in the business of dealing in shares and that the said sum was a part of the overall business transactions between the assessee and the said company, and therefore, it was claimed that the provisions of section 2(22)(e) were not attracted. Notably, shorn of other details, for the present, it would suffice to observe that section 2(22)(e) of the Act prescribes that any payment received by way of an advance or loan by a share holder, from a company in which public are not substantially interested shall be construed as deemed divid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not invite the penalty under section 271(1)(c) of the Act merely because the claim made in the return of income has been found to be unsustainable. In the present case, factually speaking, the situation is of a varying perception of the nature of transaction which has resulted in application of section 2(22)(e) of the Act, thereby resulting in a difference between returned and the assessed income. Having regard to the entire conspectus of facts and circumstances of the case, in our view it is not a fit case for levy of penalty under section 271(1)(c) of the Act. Accordingly, we set aside the order of the CIT(A) and direct the Assessing Officer to delete the penalty of ₹ 2,31,000/- imposed under section 271(1)(c) of the Act. 7. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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