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2016 (6) TMI 847 - BOMBAY HIGH COURTPenalty u/s 271(1)(c) - concealment of income with respect to the addition made u/s 41(1) of the Act on account cessation of liabilities - Held that:- In penalty proceedings all three authorities have concurrently arrived at a finding of fact that the claim made by the assessee with regard to its outstanding liabilities for subject assessment year was false. These findings of fact are not shown to be perverse in any manner. The legal claim made before us that once a liablility is shown in the balance sheet, it must follow that it is bonafide, is not understood. The liability shown in the balance sheet as existing is found to be false. The assessee has to show the reason why he believed at the time he filed his balance sheet, it was true. No such attempt was even made. It was next contended that no claim was made in the return of income and therefore imposition of penalty under Section 271(1)(c) of the Act cannot be sustained. We are unable to appreciate the above submission. The fact is that in terms of Section 139 of the Act a return of income under the Act has to be filed along with the balance sheet and profit and loss account. In its absence the return of income is defective. Thus, same are to be considered as a part of the return of income. Further by showing a non existing liability as an existing liability, in the subject assessment year, the attempt was to escape offering of the ceased liability as income obliged to do under Section 41(1) of the Act. Thus, not offering to tax, the above ceased liabilities would by itself amount to furnishing inaccurate particulars of income leading to escapement of income from tax. - Decided against assessee.
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