TMI Blog2012 (4) TMI 667X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 6,76,24,864/- (including net long term capital gain of ₹ 36,90,768/-). 3. On 27.2.2004, the Assessing Officer completed the assessment. Computed the total income of the assessee as ₹ 58,32,022/-. Reason for the variation in computation was that the Assessing Officer had disallowed claim of the assessee of bad debts of ₹ 6,14,64,087/- as well as long term capital loss of ₹ 7,19,92,800/-. Along with the assessment order, the Assessing Officer also issued penalty notice u/s 271(1)(c) of Income Tax Act (hereinafter to be referred as the Act). 4. The assessee preferred appeal against the assessment order before the Ld. CIT (A). Vide order dated 23.9.2007, the same was also dismissed. However, the assessee s appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 6,11,69,774/- as bad debts was disallowed and added to the income. 20. From the above facts of the case it is clear that the assessee has tried to claim bad debts which were patently not allowable. In fact, from the circumstances it would be apparent that the assessee was already aware of the fact that the bad debts claimed will not be allowed by the department as it is not trade debts that is why it had restored to bogus sale of shares to offbeat the tax liability it was to incur on the sale of shares of Sunbelt corporation. I am satisfied in the given facts of the case that it is a classic example of wrong claim of bad debts and it was done with purpose and mala fide intention to hoodwink the department. 21. I hold therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. In this regard, he relied on the findings of the Assessing Officer in penalty proceedings. Also referred to sec. 271(1)(c) of the Income Tax Act (hereinafter to be referred to as the Act). Stated that the said provision covers the case of furnishing of inaccurate particulars as well as unsustainable claims. Submitted that wrong explanation in assessment proceedings stands on equal footing alike concealment. Referred to ITAT order dated 24.7.2006 (supra) available at page no. 78 of the paper book wherein it had been observed that loans / advances in question were not incidental to the assessee s business and on the basis of above pleas, learned DR prayed for setting aside the order of Ld. CIT (A). 11. On the other hand, Learned AR has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than the assessee. It was said to have been set up as a small scale industrial undertaking with a view to certain preferential treatment in the excise laws, but whatever it manufactured was bought by the assessee company alone. Camelot did incur the losses but the assessee company extended financial help to Camelot from time to time. This financial help was clearly in assessee s own business interest because, if the assessee company was not to do so, Camelot could not have continued to exist, and all these losses incurred by Camelot were essentially related to doing business with assessee alone, i.e., Camelot s only customer. The loans and advances so given by the assessee were therefore wholly incidental to its business and could not be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served that the assessee had advanced the money for the purpose of strengthening the financial position and working capital of the associate and/or its group concerns and it may be noted that the assessee is not in the business of financing or advancing loans. 14.1. Meaning thereby that once the transactions in question have not been held to be false, the only question remains is allowability of the claim under the provisions of the Act. In respect of such situation, we hold that case law of Hon ble Supreme Court in Reliance Perto Chemicals Pvt. Ltd., duly covers such case wherein it has been held that where information given in return is not found to be incorrect or inaccurate; the assessee cannot be held guilty of furnishing of inac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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