TMI Blog2023 (8) TMI 1256X X X X Extracts X X X X X X X X Extracts X X X X ..... such a claim is made during the course of regular or scrutiny assessment, liberal view is required to be taken as necessarily the claim is bound to be carefully scrutinized both on facts and in law; that full probe and appraisal is natural and normal; that threat of penalty cannot become a gag and/or haunt an assessee for making a claim which may be erroneous or wrong, when it is made during the course of the assessment proceedings; that normally, penalty proceedings in such cases should not be initiated unless there are valid or good grounds to show that factual concealment has been made or inaccurate particulars on facts were provided in the computation. Law does not bar or prohibit a person from making a claim, when he knows the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chips Animation Park Limited (presently known as M/s. Soft Point Technologies Private Limited) ( the assessee ) for the assessment year 2005-06, assessee preferred this appeal. 2. Relevant facts in brief are that in the return of income for the assessment year 2005-06, the assessee debited an amount of Rs. 50 lakhs to the profit and loss account towards decrease in value of inventories. In the order passed under section 143(3) of the Act on 28/12/2007, learned Assessing Officer treated such amount of Rs. 50 lakhs shown under the head decrease in value of investment as capital loss , declined to allow the same and added it back to the income of the assessee. 3. Assessee preferred appeal before the learned CIT(A), but without any suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Assessing Officer nowhere held that the revaluation does not result in reduction of Rs. 50 lakhs; and that the claim to treat the loss as speculation loss was denied and thus the claim of Rs. 50 lakhs was not allowed. 5. Learned CIT(A) after referring to the material and contentions of the parties, observed that various aspects of the claim of the assessee were dealt with by the learned Assessing Officer aptly by referring to the observations of the learned CIT(A) in the quantum appeal and, therefore, there was no need to interfere with the findings of the learned Assessing Officer in the penalty appeal. Consequently, he dismissed the appeal. 6. Assessee, therefore, filed this appeal contending that the authorities below f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in CIT vs. Zoom Communications Private Limited, 327 ITR 510. 8. We have gone through the record in the light of the submissions made on either side. As could be seen from the assessment order, during the course of the assessment proceedings, the assessee company produced the books of accounts which were examined by the learned Assessing Officer. It is only on perusing the profit and loss account, the learned Assessing Officer noticed the debit entry to the tune of Rs. 50 lakhs towards decrease in value of inventories. Observations of the learned Assessing Officer was that since the assessee s main business activity is consultancy, know-how in setting Animation Park Studios, Entertainment Parks etc., and to undertake port-folio services, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t when such a claim is made during the course of regular or scrutiny assessment, liberal view is required to be taken as necessarily the claim is bound to be carefully scrutinized both on facts and in law; that full probe and appraisal is natural and normal; that threat of penalty cannot become a gag and/or haunt an assessee for making a claim which may be erroneous or wrong, when it is made during the course of the assessment proceedings; that normally, penalty proceedings in such cases should not be initiated unless there are valid or good grounds to show that factual concealment has been made or inaccurate particulars on facts were provided in the computation. Law does not bar or prohibit a person from making a claim, when he knows the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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