Surinco Workwear P. Ltd, Mumbai vs Assessee

M/s. Surinco Workwear Pvt. Income Tax Officer- 8(3)(2), Ltd., Mumbai 36, Marol Co-op. Indl. Estate, Vs. Marol, Andheri (W), Mumbai - 400 059 PAN: AAACS5694K (Appellant) (Respondent)

Assessee by : Ms. Heena Doshi, A.R. Revenue by : Shri Jeetendra Kumar, D.R.

Date of Hearing : 09.02.2015 Date of Pronouncement : 09.02.2015

ORDER

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order dated 16.11.2010 of the Commissioner of Income Tax (Appeals) [(hereinafter referred to as CIT(A)] relevant to assessment year 2003-04 in relation to imposition of penalty under section 271(1)(c) of the Income Tax Act.

2. The brief facts of the case are that the assessee originally filed its return of income declaring inter alia the rental income from the leased premise of warehousing as business income and claimed business expenditure against the said income. The return was processed under section 143(1) of the Act. Later on, the Assessing Officer (hereinafter referred to as the AO) reopened the assessment proceedings under section 147 of the Act and charged the rental ITA No.1213/M/2011 2 M/s. Surinco Workwear Pvt. Ltd.

income under the head "Income from house properties" as against the '"Business income" as claimed by the assessee. The assessee, in view of the law laid down by the Hon'ble Supreme Court in the case of "Shambhu Investments (P.) Ltd." 263 ITR 143 (SC), fairly conceded to said change of head of the income by the AO during the reopened assessment proceedings. The AO initiated penalty proceedings under section 271(1)(c) and levied penalty of Rs.2,98,197/- upon the assessee.

3. The Ld. CIT(A) confirmed the said penalty. The assessee is, thus, in appeal before us.

4. We have heard the rival contentions of the Ld. Representatives of both the parties and have also gone through the records. The Ld. A.R. of the assessee has stated that in the past such rental income from warehousing premises was treated as business income. However, in the reopened assessment proceedings, the assessee fairly conceded to the change of head of income as proposed by the AO. There was neither furnishing of inaccurate particulars of income nor of concealment of income. After hearing the Ld. Representative, we agree with the contention of the assessee that it was not a case of furnishing of inaccurate particulars of income or concealment of income. The assessee even had fairly agreed to the change of head of income during the reassessment proceedings. Every case where the claim of the assessee is not accepted cannot be said to be a case of concealment of income. The addition in this case has been made because of change of head of income and not because of furnishing of inaccurate particulars of income or concealment of income. It is not a case where the assessee had deliberately shown the income under a wrong head but under a bonafide belief that the income of the assessee was assessable as business income. In view of this, we ITA No.1213/M/2011 3 M/s. Surinco Workwear Pvt. Ltd.

do not think it to be a case for levy of penalty under section 271(1)(c) of the Act. The penalty levied by lower authorities is therefore ordered to be deleted.

5. In the result, the appeal of the assessee is hereby allowed.

Order pronounced in the open court on 09.02.2015.

Sd/- Sd/- (R.C. Sharma) (Sanjay Garg) ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated: 09.02.2015. * Kishore, Sr. P.S.

Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// [

By Order

Dy/Asstt. Registrar, ITAT, Mumbai.