TMI Blog2009 (8) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... closed all the particulars of income. AO disallowed the expenses claimed on the ground that they were not incurred for the business purpose of the assessee and that they have been claimed against exempted income. Thus, it cannot be held that the assessee has filed inaccurate particulars of income or had concealed its income. Thus, the penalty cannot be levied for this reason also. We also observe that the expenses claimed by the assessee have not been found by the AO as bogus or false. Thus, the genuineness of the expenses incurred by the assessee has not been doubted by the AO and, therefore, the penalty cannot be levied on the assessee still further, the assessee explained that it was due to genuine mistake that it omitted to show t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so, the Assessing Officer also initiated the penalty proceedings against the assessee under Section 271(1)(c) of the Income Tax Act and passed penalty order dated 30th October, 2001. This order was upheld by the C.I.T.(A), however, the Tribunal has set aside the penalty order stating that there was no concealment of income or furnishing of inaccurate particulars. We may note that the three additions which were made by the Assessing Officer were in the following manner: 5. While going through the computation of income it has been noticed that the assessee excluded ₹ 2,69,680/- under the head ?Profit and Sale of Cars? for separate consideration. However, under the head capital gain assessee declared long term capital loss amountin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed and added back to the income of the assessee. 7. The assessee company has debited ₹ 12,26,000/- under the head Advertisement . Since, assessee s source of income is mainly interest on tax free bond, dividend income and rental income assessee was asked to explain why such heavy expenses has been incurred in advertisement and how the expenses is related to the business of the assessee. The assessee vide reply dated 26.09.2000 has submitted that the advertisement expenses have been incurred for the purpose of business promotion . The reply filed by the assessee is vague. Moreover, the assessee has not filed any explanation how the advertisement expenses are related to the business of the assessee. Further, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akhs as the same could not be allowed as deduction against the tax free income of assessee. We also observe that in the assessment order framed the Assessing Officer had not recorded and finding to the effect that the assessee had filed inaccurate particulars of his income or had concealed its income. The Hon ble Delhi High Court in the case of CIT Vs. Ram Commercial Enterprises Ltd., 2/6 ITR 568, in the case of CIT Vs. Super Metal Re-roller, 265 ITR 82, and in the case of CIT Vs. B.R.Sharma, 275 ITR-303, has held that before initiating penalty proceedings, the Assessing Officer must record his satisfaction regarding concealment of income of filing of inaccurate particulars of income by the assessee in the assessment order. We find that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Dy.CIT 93 ITD 422, has hold that the word conceal means to hide or to withhold or not to disclose. This requirement some positive action on the part of the person concerned. Where the assessee had disclosed all the facts before the Assessing Officer and the Assessing Officer, on consideration of the evidence furnished by the assessee, come to the conclusion that the claim has not been substantiated with sufficient evidence, does not automatically result in levy of penalty. Where the assessee has disclosed all material facts in regard to the claim made, the onus placed upon the assessee stood discharged. In the instant case, the assessee had disclosed all the particulars of income. The Assessing Officer disallowed the expenses claim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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