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TMI Blog2013 (7) TMI 1149X X X X Extracts X X X X X X X X Extracts X X X X ..... 41,740/- for the assessment year 2002-03. The return filed by the assessee was processed under section 143(1) of the Act and subsequently a survey under section 133A was conducted at the premises of the assessee on 07.02.2005. Consequence to the survey operation, the assessee had filed a revised return restricting 50% of the expenses debited in the income and expenditure account of his original return. 3. During the course of survey, it was found by the survey team that the assessee was carrying professional activities from his residence situated at No. 18, Raghava Veera Avenue, Poes Garden, Chennai. It was found that not even 1/10th of the said property was devoted for professional purposes, no staffs were identifiable or attributable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.: As I have already mentioned though there was no professional activity, to main the continuity there could have been some expenses incurred towards professional income. I strongly feel there may not be more than 50% expenses that could be attributable for personal nature. I undertake to pay the tax liabilities accordingly. You may get some more details in this regard from my employee Sivaramakrishnan. Thereafter, the statement of employee of the assessee was also recorded and relevant portion of the statement given by the employee is reproduced hereunder: Q.No.3 As far as profession is concerned, the receipts are negligible for the Asst. Years 2002-03, 2003-04 and 2004-05, but expenses ranging from 35 to 40 lakhs have been de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivities and other 50% of the expenses incurred for his personal use. The Assessing Officer has further observed that the assessee was given ample opportunity to substantiate his claim of expenses, inspite of that no bills/vouchers or any other evidence is produced before him and observed that the assessee has not taken due care to furnish accurate particulars of his income. Only by a survey operation, the Department could establish the correct income and invoked section 271(1)(c) of the Act and imposed penalty. 5. On being aggrieved, the assessee carried the matter in appeal before the CIT(Appeals). It was submitted before the ld. CIT(Appeals) that penalty was imposed based on the statement given by the assessee and his employee without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. We have heard both sides, perused the records and gone through the orders of authorities below. The assessee is a film actor. The case of the assessee is that he has been carrying his profession from his residential house at Poes Garden and he has claimed various expenses connected to house i.e. electricity, A/C maintenance, repairs, security charges, telephone expenses and the same have been debited into Profit and Loss account. The assessee has also claimed expenses of salaries, allowances, staff welfare, postage, subscription and printing stationery and vehicle maintenance, telephone charges, travel expenses and the assessee was not able to produce any evidence. During the course of survey, when the survey team has questioned the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer is that the assessee has used his house as an office to carry out the professional activity, but he has not used it fully and only used 1/10th. It is difficult for the survey team to come a conclusion that he has used the house only 1/10th and most of the expenditures claimed by the assessee are personal nature. The Assessing Officer imposed penalty under section 271(1)(c) of the Act and confirmed by the ld. CIT(Appeals) only based on the statement recorded during the course of survey and no material was placed on record o show that the assessee has only incurred 50% expenditure. It is only based on mere statement of the assessee and assessee s employee, section 271(1)(c) was invoked. It is difficult to draw a line betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als) stands deleted. I.T.A. No. 66/Mds/2012 [Assessment Year 2004-05] 13. For the assessment year 2004-05, the penalty under section 271(1)(c) of the Act was imposed on account of two grounds viz., one is with regard to excess claim of expenditure, which stood already considered and decided hereinabove in favour of the assessee and so far as another ground is concerned, it is on account of claim of bad debts. At the time of hearing, the ld. Counsel for the assessee has submitted that so far as penalty in respect of bad debt is concerned, the issue is already decided in favour of the assessee by this Tribunal in assessee s own case in quantum appeal in I.T.A. Nos. 1573 to 1576/Mds/2009 for assessment years 2002-03, 2003-04, 2004- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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