TMI Blog2011 (1) TMI 1355X X X X Extracts X X X X X X X X Extracts X X X X ..... f ` 10,76,250/- and ` 8,53,711/- levied by the Assessing Officer u/s 271(1) ( c) of the I T Act for the assessment years 2004-05 and 2005-06 respectively. ITA No.4280 /Mum/2009 ( A.Y 2004-05) 3 Facts of the case, in brief, are that the assessee had filed its original return of income disclosing total income of `. 13,25,140/-. A survey u/s 133A was carried out in this case on 20.7.2005. During the course of survey, certain incriminating documents relating to repairs and renovation of the assessee s show room were found. On scrutiny of those expenses, it was found that the expenses were capital expenses but the assessee had debited the same in its P L account as revenue expenses. The assessee agreed that the expense were capital expanse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as it has disclosed all the facts and the issue was debatable i.e capital or revenue; therefore, no penalty should be levied u/s 271(1)( c) of the Act. 4 However, the Assessing Officer was not convinced with the explanation of the assessee. According to him, had there been no survey, the assessee would not have offered the additional income of `s. 30 lacs. Thus, the assessee has concealed particulars of income and also furnished inaccurate particulars of income. Relying on the decision of the Hon ble Supreme Court in the case of K P Madhusudhan vs CIT reported in 251 ITR 66, he held that the assessee concealed particulars and also furnished inaccurate particulars of income. He, therefore, levied penalty of `. 10,76,250/- u/s 271(1)( c) b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed the same as revenue expenditure. Referring to question no.5, as reproduced in the penalty order, he submitted that the assessee in his reply had submitted that an amount of `.22.70 lacs has been spent on repairs in respect of false ceiling, tile, wooden partion, wiring etc., 6.1 Referring to question no.6, he submitted that when the survey party asked the assessee that the expenses mentioned appear to be of capital nature and should have been capitalized, the assessee agreed to the proposition and has submitted that he will file a revised return after capitalizing these expenses and calming due depreciation. 6.2 Referring to question no.7 he submitted that since the assessee was unable to produce all the bills and vouchers in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that in all the above cases there was income outside books of account. However, in the case of the assessee, there is no expenditure outside books of account. 7 We have considered the rival submissions made by both the parties, perused the orders of the authorities below and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. There is no dispute to the fact that the assessee has debited workshop expenses of ` 22,88,732.22 in the P L account as revenue expenditure. There is also no dispute to the fact that during the course of survey, the assessee had stated that some amount has been spent on account of repairs in respect of tiling, false ceiling, and furniture fittings et ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce some of the vouchers on account of various expenses were not available with the assessee and to buy peace with the department, the assessee agreed that such renovation expenditure shall be treated as capital in nature and depreciation be claimed instead of treating such renovation expenses as revenue in nature. Further, on account of non availability of vouchers, it has also agreed for adhoc addition. Thus, there was an increase in the income in the revised return filed amounting to ` 30 lacs. The assessee offered additional income of ` 30 lacs and paid tax thereon and therefore, there is neither concealment of income nor furnishing of inaccurate particulars of income. In our opinion, the facts in the present case do not warrant levy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income on 15.3.2007 declaring total income of ` 47,33,970/- which has been accepted by the Assessing Officer with minor disallowance of rent for non deduction of TDS on rent. The Assessing Officer levied penalty u/s 271(1)(c) on the ground that because of the survey conducted u/s 133A on 19.8.2005 he assessee had agreed to file return of income for Assessment Year 2005-06 declaring minimum income of ` 50 lacs and paid tax thereon. According to the Assessing Officer, had there been no survey, the assessee would not have offered the additional income. Therefore, the declared income of `. 47 lacs, which consists of business income of `. 26.67 lacs and addition accepted during the survey of ` 23.33 lacs less deprecation of `. 3 lacs is due to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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