C.I.T.,Ahmedabad vs Reliance Petroproducts Pvt.Ltd on 17 March, 2010
4. After considering the rival submissions and perusing the relevant material
on record it is observed that the only basis for addition leading to the penalty is
the transfer of rental income from the head `Profits and gains of business or
profession' as declared by the assessee to the `Income from house property' as
held by the Assessing Officer and the resultant disallowance of expenses
claimed by the assessee under the head `Business income' and granting of
eligible expenses under the head `Income from house property'. Apart from that
there is nothing to indicate that there was any variation in the gross amount of
rent received by the assessee and so declared. The assessee canvassed the view
that the rental income was assessable under the head `Profits and gains of
business or profession' as it was being done in the earlier years also, which
position accepted by the Revenue albeit in assessments made u/s 143(1)(a). The
mere fact that in the current year the Assessing Officer shifted the head under
which the rental income was assessable, cannot be considered as a case for
imposition of penalty u/s 271(1)(c). The Hon'ble Supreme Court in the case of
CIT Vs. Reliance Petro Products Pvt. Ltd. [(2010) 322 ITR 158 (SC)] has held
that simply for the reason that the Assessing Officer did not find the claim of the
assessee to be sustainable in law up to a certain extent, it can not be a case for penalty
u/s.271(1)(c) more so when the particulars furnished by the assessee were not
inaccurate. The facts of our case are similar inasmuch as the assessee declared the
rental income under the head `Business income' following the view taken by it in the
earlier years and all the necessary particulars were duly disclosed. Respectfully
following the same, we uphold the impugned order.