TMI Blog2015 (2) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... e disallowed and the penalty was imposed. That was on the satisfaction that the Assessee has furnished inaccurate particulars. The facts material to the computation were, therefore, not produced and in relation to such an act on the part of the Assessee, it is open for the authorities to take assistance of section 271(1)(c) read with explanation 1(B). This was a case where the explanation gave was not sustained. The genuineness of the claim itself was in issue and in our opinion the Tribunal while upholding the order of Commissioner of Income Tax (Appeals) and that of the Assessing Officer partially did not act perversely nor committed an error of law apparent on the face of the record. No substantial question of law - Decided against asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al omitted from consideration relevant material. In that regard, our attention is invited by Mr. Shah to the Annexures to this memo of Appeal. These Annexures, inter alia, are the entries in the profit and loss account and the books which have to be maintained statutorily according to the counsel. The entries in this books have been certified and there are reports of the auditors. The auditors have specifically observed that the expenditure was incurred. That the Research and Development activities carried out by the Assessee required it to maintain complete infrastructure. The expenses have been, therefore, incurred in relation thereto. Merely because the supporting bills could not be produced does not mean that the presumption under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of expenses incurred. It may be that certain expenses have been termed as capital expenditure and, therefore, incurred in relation to the Research and Development wing, hence sustained, but the Assessing Officer, the Commissioner of Income Tax (Appeals) and the Tribunal in Quantum Proceeding as also in Penalty Proceeding concurrently found that there were 9 items of revenue expenditure. In relation to 6 items despite several opportunities being given, the Assessee failed to produce the relevant documents. It is in such circumstances that the Tribunal held that none of the judgments could assist the Assessee. The judgments proceed on the footing that when a claim is raised and it could not be sustained or proved, then, straightway the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings, the Assessing Officer had called for the details addition/deletion of fixed assets with date of purchase, cost of assets, date of the installation along with supporting documents. The Assessee produced only three bills. The Assessing Officer found that even those bills were not evidencing the claim made by the Assessee. The Assessee was given one more chance to prove the claim but it did not avail of the same. The judgments of the Hon'ble Supreme Court and particularly in the case of Reliance Petro (supra) have been referred and distinguished by the Tribunal. The Tribunal held that the claim was made for which no evidence was produced. In relation to Reliance Petro (supra) the argument which was accepted by the Hon'ble Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the reports of the auditor can be said to be material on which reliance could be placed by the Income Tax Authorities. We do not see how such observations would render any assistance because in the present case at all stages, whether in Quantum Proceedings or Penalty Proceedings the materials were the bills which were required to be produced. It was not the case of the Assessee that these have been destroyed or lost. The claim was that there was other material. However, it has been concurrently found that the bills have not been produced. In these circumstances, the expenses were disallowed and the penalty was imposed. That was on the satisfaction that the Assessee has furnished inaccurate particulars. The facts material to the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xercise will be carried out by the Assessing Officer. To our mind, the further observations by the Tribunal were really unnecessary. They are made so as to emphasize the object and purpose of inserting a provision like section 271(1)(c) in the Income Tax Act, 1961. We do not agree with Mr. Shah that audit reports and minutes of meeting were important or brushed aside by the Tribunal. The Tribunal in para 9 held that in the given facts and circumstances these documents were not enough to prove the genuineness of the transactions. This is not a finding running contrary to law much less perverse. 11] For the reasons aforesaid indicated, we do not find that this Appeal raises any substantial question of law. It is, accordingly, dismissed but ..... X X X X Extracts X X X X X X X X Extracts X X X X
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