TMI Blog2012 (8) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been shown as to how claim can be made in this year u/s 35D or u/s 37 when the claim relates to issue of share capital which is of the nature of capital. Further, no material has been placed to substantiate the claim that it has been made on the basis of legal advice. Therefore, Explanation of the assessee on the facts of the case, in our view, cannot be considered as bonafide and penalty u/s 271(1)(c) is leviable - Decided against assessee - ITA No.6790 to 6792 /Mum/2010 - - - Dated:- 13-6-2012 - SHRI B.R. MITTAL, AND SHRI RAJENDRA SINGH, JJ. Appellant by : Shri Mahendra Shah Respondent by : Shri P.K.B. Menon O R D E R PER RAJENDRA SINGH, AM: These appeals by the assessee are directed against different or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The assessee disputed the decision of AO and submitted before CIT(A) that the claim of expenditure pertained to IPO which was covered within the ambit of section 35D and such was expenditure was fully allowable as business expenditure under that section read with section 37. The write-off of the said expenditure in the later year was the decision of the management as per legal advice. The assessee also placed reliance on the judgment of Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd. (322 ITR 158) to argue that penalty under section 271(1)(c) was not leviable. CIT(A) however did not accept the arguments advanced by the assessee. It was observed by him that as per findings given by AO, the company had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the rival contentions carefully. The dispute is regarding levy of penalty for concealment of income under section 271(1)(c) of the Act. The assessee in the return of income had claimed deduction of Rs.6,35,412/- on account of preliminary expenses incurred in relation to the public issue under section 35D of the Act. The authorities below have given a clear finding that the company had been incorporated more than 10 years ago and claim made by the assessee was patently a wrong claim. The addition had been confirmed by the CIT(A) and there is no material placed before us to show that the assessee raised any further dispute in the matter. Nothing has been produced before us to show as to how the claim can be disallowed in this year. 5.1 T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as held that making wrong claim does not amount to furnishing of inaccurate particulars of income. In that case, the issue whether any addition to the total income could be considered as concealment of particulars of income as per Explanation-1 to section 271(1)(c) had not been raised before the Apex Court. In the present case, the AO had initiated penalty under section 271(1)(c) which included both the furnishing of inaccurate particulars of income and concealment of particulars of income. As we have mentioned earlier, in case, explanation of the assessee is not found bonafide, the addition is made is deemed to be concealment of particulars of income as per Explanation-1 to section 271(1)(c) of the Act. Therefore, the judgment of Hon'ble S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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