9911796707
TMI Blog2012 (8) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... genuine parties, when assessee had not produced the proof of such expenses. 2. The appellant prays that the order of the Learned CIT(A) on the above grounds be set aside and that of the A.O. is restored. 3. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 2. Assessee-company, engaged in the business of manufacturing pharmaceuticals, filed its return of income on 28.11.2003 declaring total income of Rs. 6,97,43,955/-. Assessment order was passed u/s.143(3) r.w.s.142 (2A) of the Income-tax Act, 1961(Act) on 29.09.2006 determining the total income at Rs. 34.44 Crores. 3. During the assessment proceedings certain disallowances/additions were made by the Assessing Officer (AO). Most of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FAA/ ITAT. Authorised Representative (AR) submitted that in the management of the appellant-company a fraud by way of defalcation was committed by the CA who was in charge of the finance and accounts and was in employment for more than two decades, that fraud was detected in June 2005,that total defalcation was to the extent of Rs. 19.04 Crores, that defalcation had taken place for the period 2001-2007,that various bogus vouchers for purchases as well as expenses were put in the books of accounts and money was withdrawn from the company, that company had lodged a police complaint against its employees, that when assseesee came to know about the fraud it on its own approached the department and informed it about the defalcation, that specia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he non-genuine parties amounting to Rs. 30 lakhs, he submitted that total amount involved was Rs. 2.76 crores, that the CA used to inflate the expenses, that money was transferred from the HSBC account to the account of the CA. He referred to page No.108 of the Paper Book in this regard. With regard to incomes stripping, the AR submitted that details of dividend were filed before the AO. He referred to page No. 6 of the Paper Book. He relied upon the case of Walter Saldhana (26 SOT26/ 9-Mumbai). 5. Un-disputed facts emerging from the material available can be summarised as under: i. Assessee was victim of a fraud ii. Defalcation was committed by the senior officer of the company with the help of his subordinates. iii. Crime was detec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fraud was be detected. So, if wrong claims were made by the assessee-company, on the basis of the material supplied by the employee-CA, penal provisions should not have been invoked. Lodging of a police complaint and subsequent arrest of the ex-employee of the company prove that assessee company had no role in filing inaccurate particulars rather it was a victim of a fraud. Penalties under the Act are imposed for some omissions and commissions. In our opinion, in the case under consideration it cannot held that there was any omission or commission on part of the assessee-company for which it should have been visited by penalty u/s. 271(1)(c) of the Act. 5.2. After deliberating upon the facts and circumstances of the case, we are of the op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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