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2016 (3) TMI 272 - AT - Income TaxPenalty u/s 271(1)(c) - addition on account of cash collateral offered to ICICI Bank - whether assessee’s claim on the amount kept in cash collateral is not permissible as it is mere diversion of income by overriding title - Held that:- Assessee company claims that its case falls in capacity of contractor and the money is retained for a certain period and retention money shall not be taxable until the retention period is over and the assessee relied on the decisions but amount kept in cash collected is not a prudent practice and it should be subjected to tax. In this case the money has been appropriated by ICICI Bank after collection and the assessee has claimed the deficiency in realization as Bad debts. The income of 2% was not considered in profit and loss account by assessee. We are of the opinion that these are incorrect treatment given by the assessee company and have no sanction of law and also not supported by any Accounting standard. The assessee claim is nothing but false claim and furnishing inaccurate particulars of income. The explanations given by the assessee cannot be considered as bonafide and assessee tried to conceal the income by misrepresenting the case by not bringing true income to the books of accounts. We rely on the decision of DCIT vs. Rattha Cidadines Boulevard Chennai (P) Ltd (2015 (11) TMI 991 - ITAT CHENNAI) where it observed that Auditor’s report cannot override provisions of act and, thus, merely because assessee’s false claim for deduction is supported by Chartered Accountant’s opinion, this fact per se cannot absolve assessee from penalty under section 271(1)(c) of the Act. Accordingly, we set aside the order of the Commissioner of Income Tax (Appeals) and restore the order of Assessing Officer confirming penalty - Decided against assessee.
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