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Kunalben N. Shah Versus Asstt. CIT, Circle-1, Bhavnagar

2016 (4) TMI 211 - ITAT AHMEDABAD

Penalty u/s 271(1)(c) - loss on sale of fixed asset in its books of accounts and the same was shown in the audited profit and loss account - Held that:- As during preparing computation of income loss on sale of fixed assed being disallowable expenditure was not added back to the profit as per profit and loss account resulting in showing total income less by ₹ 2,07,551/-. On coming across this fact during assessment proceedings itself assessee accepted the mistake and agreed for adding the .....

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sale of fixed asset and so this transaction certainly has travelled in the books of account and got placed in the audited financial statement and, therefore, there cannot be any concealment of particulars in this case. We also find that Hon’ble Supreme Court in the case of Price Waterhouse Coopers (P) Ltd. vs. CIT (2012 (9) TMI 775 - SUPREME COURT ) has dealt similar issue and while adjudicating the issue provisions towards payment of gratuity which was not allowable expenditure was not added b .....

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ort the Act) was framed on 23.06.2011 by ACIT, Circle-1, Bhavnagar. The assessee has raised following grounds of appeal :- The ld. CIT(A)-XX, Ahmedabad has erred on facts and in law in 1. Confirming the penalty of ₹ 70,550/- which was levied by the ACIT, Cir-1, Bhavnagar under section 271(1)(c) of the Act. Considering the facts of the case and the provisions of law, as interpreted by various courts and Tribunals, he ought to have deleted the same. The appellant craves leave to add, amend, .....

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ings it was observed by the Assessing Officer that assessee has debited an amount of ₹ 2,07,551/- in the P & L a/c under the head loss on sale of assets. However, in the computation of income loss on sales of fixed asset was not added back to the profit because sale of asset is not an allowable expenditure. On being asked to clarify the same, assessee submitted that due to oversight the same was not considered while filing the income-tax return and we agree for the disallowance of loss .....

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erately furnished inaccurate particulars of income by not adding loss on sale of fixed asset of ₹ 2,07,551 to the income and due to this reason assessee was held liable to pay penalty u/s 271(1)(c) of the Act at ₹ 70,550/- 3. Against the penalty order, assessee preferred appeal before ld. CIT(A) and ld. CIT(A) dismissed the appeal of assessee by observing as under :- 3.3 I have given careful consideration to the facts of the case. By not adding back the inadmissible debit to the prof .....

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articulars and on being caught can claim it to be due to inadvertence. Appellant is deriving sizeable income (income admitted for the year under consideration being ₹ 10,49,970/-). Her books of accounts are audited and she is having the services of professional. Therefore, I am not inclined to accept the contentions of the AR. None of the case laws relied on is applicable to the facts of the instant case. I hold that appellant furnished inaccurate particulars of income. Therefore, levy of .....

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ent proceedings itself and there was no mala fide intention of concealment of income in the mind of assessee. During the course of penalty proceedings also the facts of the case were reiterated again to contend that there was no case of either furnishing inaccurate particulars of income or concealment of income. This mistake of not adding loss on sale of fixed asset to the total income was clearly a mistake apparent on record and assessee should not be treated as having furnished inaccurate part .....

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contentions and perused the material on record. The only issue in this appeal is that assessee has shown loss on sale of fixed asset in its books of accounts at ₹ 2,07,551/- and the same was shown in the audited profit and loss account. However, during preparing computation of income loss on sale of fixed assed being disallowable expenditure was not added back to the profit as per profit and loss account resulting in showing total income less by ₹ 2,07,551/-. On coming across this fa .....

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asset at ₹ 2,07,551/- was shown in audited profit and loss account and this impugned loss has been the result of sale of fixed asset and so this transaction certainly has travelled in the books of account and got placed in the audited financial statement and, therefore, there cannot be any concealment of particulars in this case. We also find that Hon ble Supreme Court in the case of Price Waterhouse Coopers (P) Ltd. vs. CIT (supra) has dealt similar issue and while adjudicating the issue .....

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sible that even the assessee could make a "silly" mistake and, indeed this has been acknowledged both by the Tribunal as well as by the High Court 18. The fact that the Tax Audit Report was filed along with the return and that it unequivocally stated that the provision for payment was not allowable under section 40A(7) of the Act indicates that the assessee made a computation error in its return of income. Apart from the fact that the assessee did not notice the error, it was not even .....

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