TMI Blog2012 (7) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... in the computation of income which again show that the omission for not adding back the provision this year is not a bonafide mistake - When the assessee in computation of income claim expenses/provisions not allowable as deductions, the assessee is liable to pay penalty - against assessee. - ITA No.4576/Mum/2011 - - - Dated:- 6-6-2012 - Dinesh Kumar Agarwal, N K Billaiya, JJ. For Appellant: Shri Aatiq Ahmed For Respondent: Ms Charul Toprani ORDER Per: N K Billaiya: This appeal by the Revenue is directed against the order of the Ld. CIT(A)-17, Mumbai dated 04.02.2011. 2. The Revenue has raised seven grounds of appeals. The sum and substance of these grounds of appeals is that the Ld. CIT(A) erred in deleting the pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. sought explanation from the assessee company to explain how the provision for this inventory is allowable. In response to this, the assessee company vide letter dated 30.11.2008 submitted as under as regard your query for the provisions made in the books of account on the account of risk inventory there was a mistake in claiming this expenses and is acceptable to us to be disallowed . After considering the explanation, the A.O. disallowed and added back the claim of provision for risk inventory of Rs.21,44,131/- to the total income and initiated the penalty proceedings for furnishing of inaccurate particulars/concealment of income. The penalty proceedings were initiated and a show cause notice was issued to the assessee company asking i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(c) of the Act read with Explanation (1). Relying on the ratio laid down by the Hon'ble Supreme Court in the case of Union of India vs. Dharmendra Textile Processors Ors. reported in 306 ITR 277 levied maximum penalty of Rs.7,87,968/-. The assessee company assailed the order before the Ld. CIT(A). It was argued by the assessee that the claim was in accordance with the accounting policy regularly followed by the appellant. Further the provision for risk inventory had been separately disclosed in the profit and loss account filed along with the return of income. Hence there was no concealment of income in the appellant s case. After considering the submissions of the assessee that the claim was in accordance with the regular method o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l provision at Rs.1,56,885/-. At this stage, the assessee did not add back the provision for risk inventory of Rs.21,44,131/-. During the course of the assessment proceedings also the assessee company did not ask the A.O. to add back the said claim of the provision. When the assessment was subjected to rectification u/s.154 of the Act on 12.12.2007, the assessee did not care to point out for the disallowance of the provision for risk inventory. On receiving the notice u/s.148 and filing the return in response to this notice, the assessee company filed the same return i.e. Rs.7,48,758/- u/s.115JB of the Act and Rs.1,56,885/- under the normal provisions which figures were filed in its revised return on 30.03.2005. It was only when the A.O. po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee did not claim it so the Income-tax Appellate Tribunal cancelled the penalty. The factual matrix as explained above show that the facts of the present case are clearly distinguishable. Our view finds support from the decision in the case of Zoom Communication (P.) Ltd. [2010] 327 ITR 510 in which the Hon'ble Delhi High Court has held that the claim for deduction being not bonafide amounts to concealment of income. When the assessee in computation of income claim expenses/provisions not allowable as deductions, the assessee is liable to pay penalty. As pointed out by us in the factual matrix, the conduct of the assessee shows that it has claimed the provision as expenditure in profit and loss account in spite of the fact that it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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