TMI Blog2010 (4) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004 declaring total; loss of Rs.(-) 94,09,975/- and the assessment was completed u/s. 143(3) of the I.T. Act,1961, on 31-01.2006 determining the total income at ₹ 4,61,92,160/-. The A.O. made additions on two accounts. i) ₹ 8,03,80,805/- being 7% of total receipts of ₹ 1,14,82,97,211/- which was not shown this year as receipt as per the agreement /MOU and (ii) ₹ 89,21,135/- being expenses disallowed for want of proof. Penalty proceedings u/s. 271(1) (C) were initiated and show cause notice was issued. Assessee made the submission before the AO in reply to the show cause notice. However, A.O. was not satisfied with the explanation given by the appellant at the time of penalty proceeding. The A.O. obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment order. The minimum penalty was worked out by him at ₹ 2,94,41,040/-. 4. The Ld. C.I.T. (A) confirmed the penalty by observing as under :- The only ground of appeal raised by the appellant relates to levying penalty of ₹ 2,94,50,000/- u/s. 271(1)(c ) of the I.T. Act. In this case Patel Engg. Ltd., and LGE c Indian arm of LGE C Koreea formed a JV for bidding the tender floated by NHAI for Surat Manor National Highway./ JV was entered on 4-10-1999. Thereafter, the two members of the JV entered into an agreement on 16.10.2000 vide which they agreed to share the receipts in the ratio of 75% : 25% which was an internal agreement made by these two parties. During the course of assessment proceedings it was submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arried out by PEL. In this count also the AO established the furnishing of inaccurate particulars by the assessee and hence penalty was levied by the A.O. on the assessee. 5. Before us the Ld .A.R. for the assessee submitted that assessee has not concealed any facts or not filed inaccurate particulars but it genuinely believed that no real income accrued to Joint venture as entire work was transferred to PEL by virtue of agreement dt. 2-9-02 and therefore, no income arising from that work could really belonged to joint venture. There is no allegation that any material, particulars have been concealed by the assessee or any inaccurate particulars have been filed. Merely making a claim in the return of income would not amount to concealm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Fish Company vs. C.I.T. (1999) 238 ITR-63 (A.P.H.C.) 3. C.I.T. vs. Mohd. Bus Sokat Ali (2004) 265 ITR-326 (Raj. H.C.) 4. C.I.T. vs. Bengal Jute Mills Co. Ltd. (1988) 174 ITR-402 (Cal. H.C.) 5. C.I.T. vs. Shishpal (2002) 255 ITR-187 (Raj. H.C.) 6. C.I.T. vs. Sanjiv Kumar (2008) 300 ITR-348 (P H H.C.) Further Hon ble Supreme Court in CIT vs. Reliance Petro Products 322 ITR-158 (SC) held that disallowing claim could not be a case of concealment of income or furnishing of inaccurate particulars of income. It is held that for furnishing inaccurate particulars information given in the return should be incorrect or inaccurate. The words inaccurate particulars mean that the details supplied in the return are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s by the Tribunal vide our order of even date, for the reasons that once volition on the part of LGE C in earning income with PEL ceased to exist, it could not be said that any AOP would still continue to be in existence. Further, such expenditure was not incurred by LGE C for earning any income for itself. Thus, the claim of the Joint venture for allowing this expenditure was not accepted by the Tribunal. But on rejection of the claim of the assessee, joint venture could not invite penalty u/s. 271(1)(c ) as held by Hon ble Supreme Court in Reliance Petro Products case (supra). 8. As a result, penalty so levied by the AO and confirmed by the Ld. CIT(A) is cancelled. Appeal of the assessee is allowed. ITA.773/Ahd/2010 (A./Y.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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