TMI Blog2010 (6) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer disallowed expenses amounting to ₹ 4722756/- pertaining to pre-commencement period of the business by observing as under:- The assessee company commenced its business from 22/6/2000. On perusal of details filed by the assessee company it has been seen that the expenses pertaining to the pre-commencement period of the business are debited in the P L account. These expenses are not related to the creation of the fixed assets and therefore cannot be capitalized. At the same time, these expenses not being in the nature of preliminary expenses specified u/s 35-D, cannot be amortised also. The expenses claimed as incurred in the pre-commencement period of the business also. The expenses claimed as incurred in the pre- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nduring in nature. Assessing Officer further referred to decision of Hon ble Apex Court in the case of Dharmendra Textiles and Processors 306 ITR 277 and imposed penalty of ₹ 1373261/-. 4. Upon assesses appeal, the Ld. Commissioner of Income Tax (Appeals) observed that assessee was engaged in the business of internet services, ecommerce services, designing, implementing, software and allied services. The penalty has been levied on the additions/disallowance made on account of website development and prior period expenses which were upheld by the Ld. Commissioner of Income Tax (Appeals) and subsequent appeal by the assessee before the ITAT had been dismissed for non-prosecution. The Ld. Commissioner of Income Tax (Appeals) was of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... site development, the Ld. Commissioner of Income Tax (Appeals) himself has deleted the penalty which pertain to the expenditure of ₹ 1623652/- on website development incurred after 22.6.2000. Hence from the same expenditure against a part Ld. Commissioner of Income Tax (Appeals) has deleted the levy of penalty. Hence revenue view is that these expenditures though revenue in nature cannot be allowed as such in as much as they pertain to pre-commencement period. From this it is amply clear that there was two opinion possible on the treatment of the nature of these expenditures. There is no furnishing of inaccurate particulars or concealment by the assessee. In our considered opinion assessee s claim cannot be said to be ex-facie bogus. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act, or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute. 9. Under the circumstances, following the above precedents, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
