TMI Blog2007 (6) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... law:- Whether in the facts and circumstances of the case, the Tribunal had properly exercised its discretion and was right in deleting the penalty imposed u/s 271(1)(c), when clearly the assessee had not included the total brokerage received by it in its profit and loss account? 2. The facts leading to the above substantial question of law are as under: The assessee is a Company incorporated on 28.09.1994 as a 100% subsidiary of M/s. Cholamandalam Investments and Finance Co. Ltd. The company is a member of the Madras Stock Exchange and is doing business as a share broker. The relevant assessment year is 1997-98 and the corresponding accounting year ended on 31.03.1997. The assessee filed Return of income on 01.12.1997 admitting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order has also been accepted by the assessee. During the course of assessment proceedings, the assessee was served with a show cause notice for concealment of brokerage of income. In response to the show cause notice, the assessee filed a letter dated 02.02.2000 and offered an explanation. The Assessing Officer, not satisfied with the explanation offered by the assessee regarding concealment of income earned by way of brokerage income, levied the penalty in dispute. The Assessing Officer levied a penalty of Rs.10 lakhs. Aggrieved by the order the assessee filed an appeal to the Commissioner of Income-tax (Appeals). The C.I.T.(A) allowed the appeal and held that the assessee had not filed any inaccurate particulars of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erage of Rs.19.98 lakhs payable was shown as liability in the balance sheet in Schedule VII. The assessee had filed all the details before the Assessing Officer and also not concealed anything from the Department on the basis of the available record and details furnished by the assessee. It is seen from the record that the assessee has been following the accounting practice of netting the brokerage earned against sub brokerage payable and only the net amount was reflected in the profit and loss account. Since the sub brokerage has not been paid, it was shown as outstanding in the balance sheet. Hence there has been no concealment of income or there is no furnishing of inaccurate particulars of income. The only mistake committed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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