TMI Blog2013 (12) TMI 892X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. Insurance claim, sale of empty gunny bags and crane hire charges, though may be part of the business of the assessee but did not have direct nexus - Decided against assessee. - ITA No.6108/Mum/2010 - - - Dated:- 11-10-2013 - P M Jagtap And Vivek Varma, JJ. ORDER:- PER : Vivek Varma The instant appeal is filed by the assessee against the order of CIT(A) 7, Mumbai, dated 01.02.2010, wherein, the assessee has raised the grounds against levy of penalty u/s 271(1)(c) at Rs. 3,00,823/-. 2. The facts emanating from the orders of the revenue authorities are that, the assessee had claimed deduction u/s 80IA, wherein, the assessee had included insurance claim, crane hire charges and sale of empty gunny bags/drums. 3. In the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts, on the basis of which the penalty has been levied had been supplied by the assessee to the AO during the course of proceedings before him. This was only a case of difference of inferences arrived at by the revenue authorities and the assessee. Hence, penalty is not leviable, because, there was no inaccurate particulars except for the difference in drawing the inferences. The penalty provisions can only be initiated, if there is factum of inaccurate particulars of income supplied by the assessee. The AR submitted that the assessee had made a bona fide claim before the AO, which the AO thought to be otherwise. Hence, the AR submitted that since the facts were before the revenue authorities, which were interpreted otherwise, that by its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the sides and we find that receipts of crane hire charges, sale of empty gunny bags/drums and insurance claim made by the assessee and added to the profits of eligible units to claim a higher deduction u/s 80IA are outside the scope of expression derived from . Here we can take an example of funds placed in the bank in term deposit, under two situations, i.e. to avail bank facilities like L/c or packing credit facility and as a consequence, earning interest on that term deposit and another situation, funds are lying and the funds are placed in term deposit and earning interest thereon. Both these situations are entirely different. First situation can be called as intricately linked to the conduct of business, but the second situation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 217 ITR 465 (Bom); Rajaram and Co. v. CIT [1992] 193 ITR 614 (Guj) and Beena Metals v. CIT [1999] 240 ITR 222 (Ker.) and in 327 ITR 510 (supra), wherein Delhi High Court held that, It was also not the case of the assessee that it was under a bona fide belief that these two amounts could be claimed as revenue expenditure. If the assessee makes a claim which is not only incorrect in law but is also wholly without any basis and the explanation furnished by him for making such a claim is not found to be bona fide, it would be difficult to say that he would still not be liable to penalty under section 271(1)(c) of the Act. If we take the view that a claim which is wholly untenable in law and has absolutely no foundation on which it co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how such deductions could have been left out while computing the income of the assessee-company and how it could also have escaped the attention of the auditors of the company . 13. Thus, from the above two judgments, it can very well be deciphered that the income should inextricably have a direct nexus with the ongoing business of the assessee. Insurance claim, sale of empty gunny bags and crane hire charges, though may be part of the business of the assessee but they cannot by any stretch of imagination could have any direct nexus with the conduct of business. 14. We are, therefore, unable to accept the argument of the assessee that the impugned receipts are part and parcel of the business activity of the assessee and were eligible fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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