TMI Blog2013 (12) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... J. Sudhakar Reddy, AM And Rajpal Yadav, JM,JJ. For the Appellant : Sh. Deepak Sehgal, Sr. D. R. For the Respondent : Sri. Pradeep Dinodia, VP Gupta, Basant Kumar, Adv. ORDER Per J.Sudhakar Reddy, AM This is an appeal filed by the Revenue directed against the order of the Ld.CIT(A)-XVII, New Delhi dt. 23.2.2011 pertaining to the Assessment Year 2006-07. 2. Facts in brief:- The facts of the case are brought out at paras 2 and 2.1 of the Assessing Officer's order which is extracted for ready reference. 2. Brief facts in respect of the claims of Rs.14,24,000/- and of Rs.38,72,000/- with reference to which penalty of Rs. 17,82,634/- has been levied by the Assessing Officer are that the Appellant Company in Assessment Year 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability in A. Yrs.2005-06 and 2006-06 for the interest relatable to the previous years relevant to the above assessment years. The Assessing Officer had disallowed claim in A. Y. 2005-06 also. The appellant claim in this Assessment Year was also disallowed by following the stand taken in A. Yrs. 2004-05 and 2005-06. 2.1. The another point on which penalty has been levied is of Rs.38,72,000/- being the expenses claimed by the company on removal of squatters. In respect of this claim the company has submitted that it had claimed a deduction of Rs.4 crores in A. Y. 2004-05 on accrual basis estimating the expenditure to be incurred in subsequent years. The Assessing Officer in A. Y. 2004-05 had not allowed deduction for the sake holding it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee carried the matter in appeal. The First Appellate Authority considered the detailed submissions of the assessee and held that, on a perusal of the order of the Assessing Officer the additions/disallowances were confirmed as there was a dispute of the year of assessability. He also observed that there was no finding that the claims in question were bogus claims or that the expenses were illegal. The First Appellate Authority further gave a finding that the assessee has claimed the said expenditure, by following its consistent stand taken in earlier years and the AOs in the earlier years, on similar facts levied no penalty. He further recorded that the assessee had made full disclosure in respect of its claims in the replies, returns filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the books of account during this year, the company had also debited/provided amounts of Rs.520.64 lakhs and Rs.251.04 lakhs on account of interest payable to MCD and builder respectively. Keeping in view of the stand of the company, as explained hereinabove, amount debited in books of account has also been added back in this computation." 6. The assessee had made similar claims in the AYs 2004-05, 2005-06 and the Assessing Officer had disallowed the same on the ground that the deduction will be allowed on payment basis and not on accrual basis. The Assessing Officer made the disallowance by holding as follows: "The assessee company following its stand has claimed interest of Rs.14.24 lacs (net of recovery) payable to builder for the y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n no basis have been given for working of this liability, and it is a liability of contingent nature. As mentioned above, an estimated contingent liability cannot be allowed to be deducted from taxable profits. Hence, a deduction of Rs.4 crores claimed for estimated expenses for quarter vacation cannot be allowed. However, the assessee is free to claim this expenses, in the year in which it is actually incurred after furnishing necessary documentary evidence." 9. The CIT(A) had upheld the claim of the assessee for deduction on accrual basis in the year 2004-05. The department carried the matter in appeal before the Tribunal. 10. On these facts we have the considered opinion that there is no concealment nor furnishing of inaccurate parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return are found to be incorrect or erroneous or false there is no question of inviting the penalty under Section 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing of inaccurate particulars. Decision of the Gujarat High Court affirmed." 11. In our considered opinion the First Appellate Authority has rightly deleted the penalty in question for the detailed reasons given in his order which are already extracted above. In the result we dismiss the appeal of the Revenue. 12. In the result the appeal of the Revenue is dismissed. - - TaxTMI - TMITax - Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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