TMI Blog2013 (6) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... laid down in the Dilip N Sheroff case (2007 (5) TMI 198 - SUPREME Court) as to the meaning of word ‘concealment’ and ‘inaccurate’ continues to be a good law because what was overruled in the Dharmender Textile case [ [2008 (9) TMI 52 - SUPREME COURT ] was only that part in Dilip Sheroff case where it was held that mensrea was a essential requirement of penalty u/s 271(1)(c). The Hon’ble Apex Court also observed that if the contention of the revenue is accepted then in case of every return where the claim is not acceptedby the Assessing Officer for any reason, the assessee will invite the penalty u/s 271(1)(c). This is clearly not the intendment of legislature. Thus the levy of penalty in this case is not justified. In favour of assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty of Rs. 6,19,932/- was imposed. 4. Upon assessee s appeal Ld. Commissioner of Income Tax (A) observed that assessee is in the business of retailing coffee and food items through its coffee bars throughout India. It knew full well that expenditure of Rs. 86,82,514/- was clearly capital expenditure not allowable u/s. 37 of the I.T. Act because it was incurred for the purpose of raising capital during the running of the business (Brooke Bond India Ltd. vs. C.I.T. 225 ITR 798). Therefore, Ld. Commissioner of Income Tax (A) opined that assessee had deliberately made a claim u/s. 35D of the I.T. Act which is palpably a wrong claim because section 35D deals with industrial undertaking. Ld. Commissioner of Income Tax (A) further noted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed u/s. 35D of the I.T. Act. In the opinion of the Assessing Officer this sum of Rs. 1736503/- was not allowable as the entire expenditure in this regard were in capital field. On account of aforesaid disallowance penalty proceedings were also initiated and penalty of Rs. 619932/- was levied. As per the Revenue the amount involved could not have been claimed as Revenue expenses as it was clearly in the capital field and Hon ble Apex Court decision in the case of Brooke India Ltd vs. C.I.T. (Supra) expounded that such expenses should be capitalized. 6.1 As against above, it is the claim of the assessee that assessee had made a full disclosure of the amount of claim and hence, there is no case of concealment or furnishing of inaccurate part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat through a bona fide and inadvertent error, the assessee while submitting its return, failed to add the provision for gratuity to its total income. The assessee should have been careful but the absence of due care, in a case such as the present, did not mean that the assessee was guilty of either furnishing inaccurate particulars or attempting to conceal its income. On the peculiar facts of this case, the imposition of penalty on the assessee was not justified. 6.4 We further draw support from the Hon ble Jurisdictional High Court decision in the case of C.I.T. vs. Societex in I.T.A. No. 1190/2011 vide order dated 19.7.2012. In the said decision the Hon ble Jurisdictional High Court vide para no. 5 6 held as under:- 5. Mr. Mara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given, if the authority finds that the explanation given is not bona fide penalty u/s. 271 would be warranted. Similar observations were made in CIT v. Reliance Petro Products Pvt. Ltd., (2010) 322 ITR 158. In the present case, so far as the question of depreciation is concerned what emerges from the previous discussion is that the CIT(Appeals) had accepted the assessee s claim for depreciation to the extent of 2/3rd in respect of the Bangalore property. It is also the matter of record that the Khan Market property was let out for the first time in the latter part of the concerned assessment year i.e. in August, 1996. In these circumstances, the benefit of inadvertence or mechanical or repetitive claim being made can be given to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act, or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute. 6.6 We further place reliance upon the Hon ble Apex Court decision in the case of CIT vs. Reliance Petro Products Ltd. in Civil Appeal No. 2463 of 2010. In this case vide order dated 17.3.2010 it has been held that the law laid down in the Dilip N Sheroff case 291 ITR 519 (SC) as to the meaning of word concealment and inaccurate continues to be a good law because what was overruled in the Dharmender Textile case was only that part in Dilip Sheroff case where it w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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