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2016 (5) TMI 403 - AT - Income TaxPenalty u/s 271(1)(c) - bogus write off of bad debts and interest claimed as deduction which is attributable towards the interest free loan advanced to sister concern - Held that:- It is apparent from the orders of the Revenue that the assessee has not established the genuiness of its claim of bad debts. If the assessee had genuine debtors arising from the sale of steel, it would have been easy for it to establish so. The assessee has also not made any attempt to prove that its earlier admissions are erroneous. From these facts it is apparent that the assessee’s claim of bad debts has no merits. More so when it is apparent that the assessee during the earlier assessment years has credited in its books of accounts with income stating it to be earned from Aqua culture while as those income related to earnings from unaccounted sale of steel and correspondingly debited the same in fictitious debtors accounts because the assessee in the earlier proceedings has admitted that no expenditure was debited in the books of accounts for earning such income. Hence it is abundantly clear that these debtors are bogus. Further, the assessee has transferred its interest bearing funds to its sister concerns as interest free advances and thereby erroneously absorbed the interest pertaining to that funds in its books of account. This amount of interest can be computed arithmetically with accuracy and cannot be termed as estimation and has been rightly disallowed. Therefore, the reliance placed by the assessee and the learned Commissioner of Income Tax (Appeals) in the decisions of higher judicial are not applicable to the facts of this case. Further the assessee has not succeeded in its quantum appeal on these issues before the appellate authorities as conceded by the learned Assessees Representative. From the above facts and circumstances of the case, it is clearly established that the assessee has concealed its income by furnishing incorrect particulars. Hence, the learned Assessing Officer is justified in levying penalty on the assessee - Decided against assessee.
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