TMI Blog2011 (11) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2009 at an income of ₹ 1,84,200/- after disallowance of preliminary expenses written off amounting to ₹ 1,73,337/-. During the course of assessment proceedings, it was noticed by the Assessing Officer that for assessment year 2006-07, the assessment was completed u/s 143(3) after disallowing ROC expenses of ₹ 1,72,983/- u/s 35D of the Act and after capitalizing professional fee of ₹ 23,400/- paid for incorporation of the company. Therefore, in the year under consideration, there was no brought forward losses available to the assessee and ROC expenses of ₹ 1,72,337/- were also required to be added back to the total income. The assessee, however, did not add back the ROC expenses to the total income and the ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ify the same. Therefore, it could not be said that the assessee had voluntarily offered to add back to its income, the excess claim of ROC expenses and brought forward losses. Therefore, penalty u/s 271(1)(c) of the Act was imposable. The CIT(A) accordingly upheld the penalty imposed by the Assessing Officer. 4. Before us, Ld.AR of the assessee submitted that the assessee incurred ROC expenses in respect of increase of authorized share capital during the previous year relevant assessment year 2006-07. The assessee amortized the preliminary expenses and claimed 1/10th of the expenses in assessment year 2006-07. In assessment year 2007-08, assessee also claimed 1/10th of expenses amounting to ₹ 1,72,337/-. The assessee filed return o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had claimed deduction based on various decisions. Likewise, the decision of Hon ble Gujarat High Court in the case of Vidyagauri Natverlal Ors. (supra) was also distinguishable on facts. Ld.AR of the assessee placed reliance on the decision of Delhi High Court in the case of CIT vs. Brahmaputra Consortium Ltd., wherein on identical facts, the penalty u/s 271(1)(c) of the Act was not held to be leviable. Ld.AR of the assessee further submitted that claim of the assessee was bona fide and, therefore, penalty u/s 271(1)(c) of the Act was not imposable. 6. On the other hand, Ld.DR. supported the order of the CIT(A). 7. We have heard both the parties and gone through the material available on record. There is no dispute about the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had revised the computation of income based on the order for assessment year 2006-07 for the year under consideration, in our considered opinion, penalty u/s 271(1)(c) of the Act is not exigible. 8. Assessee s case is covered by the decision of Hon ble Delhi High Court in the case of CIT vs. Brahmaputra Consortium Ltd. in I.T.A. No.1582 of 2010 dated 3.8.2011. In this case, a fee of ₹ 1.59 lakhs was paid to Registrar of Companies for increasing authorized capital. The assessee claimed the same as revenue expenditure. The Assessing Officer disallowed the same following the judgment of Hon ble Supreme Court in the case of PSIDC Ltd. vs. CIT, 225 I.T.R. 792. The Assessing Officer imposed penalty u/s 271(1)(c) of the Act. On a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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