Case Law Details
Riyasat Palaces Limited Vs ACIT (ITAT Delhi)
Introduction: In a recent tax dispute case between Riyasat Palaces Limited and the Assistant Commissioner of Income Tax (ACIT), the Income Tax Appellate Tribunal (ITAT) Delhi has ruled in favour of the appellant. The case revolved around the penalty of Rs.2,91,000 imposed under Section 271(1)(c) of the Income-tax Act, 1961, for allegedly furnishing inaccurate particulars of income.
Analysis: The ITAT observed that the assessee, Riyasat Palaces Limited, had disclosed all material facts pertaining to the claim of the interest expense, which the Assessing Officer (AO) did not find to be incorrect. The AO, based on his perspective, rejected the explanation offered by the assessee. The core argument by Riyasat Palaces was that a difference in the perception of viewing a transaction shouldn’t be construed as furnishing of inaccurate particulars of income, thereby invalidating the imposed penalty. The tribunal agreed with the assessee’s arguments, emphasizing that an incorrect claim cannot tantamount to furnishing inaccurate particulars. The tribunal also referred to a previous ruling by the Supreme Court in the case of CIT vs. Reliance Petro Products.
Conclusion: The ITAT, after considering all the presented facts and legal precedents, concluded that a difference in perception in viewing a transaction does not equate to furnishing inaccurate particulars of income. Therefore, the tribunal directed to delete the penalty of Rs.2,91,000 imposed on the assessee, thereby ruling in favour of Riyasat Palaces Limited. This decision not only brings relief to Riyasat Palaces Limited but also sets a crucial precedent for similar disputes in the future.
FULL TEXT OF THE ORDER OF ITAT DELHI
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