ITAT deleted penalty as assessee had disclosed loans and advances
ITAT deleted penalty as assessee had disclosed loans and advances
Assessee declared total income of Rs 16,96,974, from 'salary', 'income from house property' and 'income from other sources'. AO noted that assessee had taken huge loans and advances from various companies, and AO treated them as 'income from other sources' by treating it as 'deemed dividend', u/s 2(22)(e). AO imposed penalty. CIT(A) confirmed penalty. ITAT deleted penalty as assessee had disclosed loans and advances.-500616
1. Assessee had filed its return of income declaring total income of Rs 16,96,974.
2. Assessee has shown income from 'salary', 'income from house property' and 'income from other sources'.
3. AO noted that assessee had a flat but the same was not offered for income as 'deemed rent'.
4. AO adopted value at Rs. 27,500 as ALV.
5. AO noted that assessee had taken huge amount of loans and advances as from various companies.
6. AO treated the loans and advances received of Rs. 4,91,27,237 as 'income from other sources' by treating it as 'deemed dividend', u/s 2(22)(e).
7. AO imposed penalty u/s 271(1)(c).
8. CIT(A) reduced the addition on verification. It confirmed the penalty.
On appeal, the ITAT held as under:
9. Since assessee had disclosed all the loans and advances, then even if the addition has been confirmed by invoking the deeming provision, that too which has verified from assessment stage to appellate stage, we are of the opinion that it does not amount to furnishing of inaccurate particulars so as to attract penalty u/s 271(1)(c).
10. Further, when the addition itself has been made under the deeming provisions and there is no failure on the part of the assessee to furnish all the particulars of income, then in our opinion, penalty cannot be levied u/s 271(1)(c).
11. Accordingly, penalty on account of deemed dividend stands deleted.
Case Reference - Shri Ghansham J Shewakramani Vs ACIT.
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH "G", MUMBAI
BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER
AND SHRI AMIT SHUKLA, JUDICIAL MEMBER
ITA No. : 7507/Mum/2013
(Assessment year :2007-08)
