TMI Blog2016 (3) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... been appropriated by ICICI Bank after collection and the assessee has claimed the deficiency in realization as Bad debts. The income of 2% was not considered in profit and loss account by assessee. We are of the opinion that these are incorrect treatment given by the assessee company and have no sanction of law and also not supported by any Accounting standard. The assessee claim is nothing but false claim and furnishing inaccurate particulars of income. The explanations given by the assessee cannot be considered as bonafide and assessee tried to conceal the income by misrepresenting the case by not bringing true income to the books of accounts. We rely on the decision of DCIT vs. Rattha Cidadines Boulevard Chennai (P) Ltd (2015 (11) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars, relating to revenue recognition were furnished by the assessee and such details were so fundamental to the genuineness and bonafide of the claim that mere furnishing of those particulars made the claim vulnerable, entailing levy of penalty u/s.271 (1)(a) of the I.T. Act, 1961. 2.4 The learned Commissioner of Income Tax (Appeals) ought to have appreciated that making a claim contrary to a statutory provision is a clear case of furnishing inaccurate particulars of income, leading to concealment of income. 2.5 Having regard to the Hon ble Delhi High Court s decision in the case of CIT vs. Zoom Communication (P) LTD 327 ITR 510, the learned Commissioner of Income Tax (Appeals) ought to have upheld the levy of penalty u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of loans granted by its various self help groups to ICICI Bank on the basis of Bilateral Buy Out Basis. A per the terms and conditions of the buyout deal the assessee shall provide cash collateral for the amount equal to 2% of purchase consideration for receivables assigned to ICICI Bank and such collateral is made by way of bank deposits and company shall make a lien in favour of ICICI Bank. The terms being the cash collateral provided shall be utilized by ICICI Bank to cover any shortfall in the repayment of loans by self help groups to ICICI Bank. It was argued and submitted before the ld.Assessing Officer that the assessee being a company registered under Companies Act, 1956 and also comply with Statutory Audit Accounting Standards refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its to cover the probable deficiency occurs to ICICI Bank in case of difference in realization of loans, which takes the characterises of retention money. Further, the assessee is following Auditing and accounting standards of the ICAI which is not disputed. The fact that income recognition of retention money shall be crystallized only after completion of events or expiry of period. The ld. Commissioner of Income Tax (Appeals) has observed at pare 7 at page 3 as under:- The provisions of AS-9 mandated that in case there is any uncertainty relating the ultimate realization of the income, then the recognition of revenue had to be postponed until the uncertainty is resolved. Therefore, to comply with the said Standard, the appellant had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of income or furnishing of inaccurate particulars by assessee in the assessment proceedings or before appellate proceedings and there is no fresh evidence filed before the Commissioner of Income Tax (Appeals). The assessee has explained the system of accounting before the lower authorities and retained the money, to be adjusted by the ICICI Bank for the deficiency in realization of loans which is considered and difference of loan recovery is claimed as Bad Debts. The ld. Commissioner of Income Tax (Appeals) has considered the accounting standards, accounting system and judicial decisions and directed to delete the penalty imposed on assessee in accordance with law and prayed for dismissal of the appeal of the Revenue. 9. We heard the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im and furnishing inaccurate particulars of income. The explanations given by the assessee cannot be considered as bonafide and assessee tried to conceal the income by misrepresenting the case by not bringing true income to the books of accounts. We rely on the decision of DCIT vs. Rattha Cidadines Boulevard Chennai (P) Ltd (2015) 155 ITD 977 where it observed that Auditor s report cannot override provisions of act and, thus, merely because assessee s false claim for deduction is supported by Chartered Accountant s opinion, this fact per se cannot absolve assessee from penalty under section 271(1)(c) of the Act. Accordingly, we set aside the order of the Commissioner of Income Tax (Appeals) and restore the order of Assessing Officer and all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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