TMI Blog2012 (3) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... y Wadhwa, Adv. Revenue by : Shri B.R.R. Kumar, Sr. DR ORDER PER A.D. JAIN: JM This is department s appeal for assessment year 2003-04, challenging the action of the CIT(A) in deleting the penalty of Rs.384757/- imposed by the Assessing Officer u/s 271(1)(c) of the I.T. Act, 1961. 2. The facts are that vide assessment order dated 6.3.06, a loss of Rs.909712/- was determined against the returned loss of Rs.1956670/- shown in the return filed on 02.12.2003. The assessee company had debited filing fee paid to Registrar of Companies (ROC) amounting to Rs.980500/- and stamp duty paid of Rs.66458/-. The Assessing Officer, however, did not allow these two claims of expenditure. It was held that the assessee had not offere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance has been placed on Zoom Communications , 199 Taxman 179 (Del.) and Berger Paints Ltd. vs. CIT , 292 I.T.R. 658 (Del.). 6. Continuing with his arguments, the ld. DR has contended that the assessee cannot seek shelter under the pretext proferred, id est, that there was a legitimate omission; that a Company is entirely responsible for the omissions and commissions of its legal advisers and CAs; and that as available from the copy of form No.3CD, as appearing at pages 14- 22 of the assessee s paper book ( APB , for short), there was a deduction of Rs.89,400/- u/s 35D of the Act and so, the assessee Company was in full knowledge of the actual state of affairs. Reliance was placed on CIT vs. Gurbachan Lal , 250 I.T.R. 157 (Del.) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g fee was paid to the ROC and debited to the P L A/c; that the entire expenditure was shown in the return of income; that the assessee nurtured a bona fide belief that the expenditure was allowable; that there was no reason for the assessee to believe that the expenditure was capital in nature; that it was thus that the assessee rightly took the expenditure to be a revenue expenditure; that disallowance of such expenditure is not envisioned by any provision of law; that the issue of nature of such expenditure has been the subject matter of long drawn fiercely fought litigation; that even the auditors gave no indication in this regard; that the assessee is not a person instructed in law, nor is it expected of any one to know the entire law; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of disallowable expenses, the assessee had committed a conscious concealment by claiming the expenses to be revenue expenses, particularly when the Hon ble Supreme Court in M/s Brooke Bond (India) Ltd. (supra) has held such expenses to be capital expenses. 9. We find that there has been no suppression of facts on behalf of the assessee. Further, on the query of the Assessing Officer, the assessee offered a detailed explanation vide letter dated 31.8.06, as noted by the CIT(A) at page 4, para 14 of the impugned order. A copy thereof is to be found at pages 7-11 of the APB. It would be appropriate to reproduce hereunder the relevant portion of the said reply: 2. Not furnished inaccurate particulars (a) An expenditure which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to substantiate (and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him), then the mount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed. (b) The assessee s act was bonafide and all the facts relating to it were apparently disclosed in the profit and loss account and also furnished before the Ld. Assessing Officer at the time of assessment proceedings. There was no willful negligence on the part of assessee .. 10. The assessee, in its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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