9911796707
TMI Blog2017 (3) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has filed the return for Assessment Year 2007-08 on 30.10.2007 showing loss of Rs. 23,89,63,799/-. The Assessee has claimed Rs. 3,26,25,000/- under the head "Management service chargesto shareholders" under the head "Administrative cost". The Assessing Officer found that assessee has paid above amount for transfer of technical know-how and license to use its intellectual property rights and, therefore, treated the same as capital expenditure. The depreciation was allowed and net addition was made. The assessee went in appeal and CIT (A) has confirmed 25% of Rs. 3,26,25,000/-treating it as a capital expenditure as per the ratio laid down by the Hon'ble Supreme Court in the case of Jonus Woodhead and Sons (India) Pvt. Ltd. vs CIT, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inaccurate particulars so as to levy penalty u/s 271 (1) (c). It has been held in the case of CIT vs. Yahoo India Pvt. Ltd. 216 Taxman 66 (Bom) that no penalty u/s. 271 (1) (c) is liveable when the issue is debatable. I also find that it has been held in the case of Shriram Refrigeration Industries Ltd. vs CIT (127 ITR 746); Glaxo Smithkline Asia (Pvt.) Ltd. vs ACIT (6 SOT 113) (2006) that the management service charges are revenue expenditure. That the disallowance made by the Assessing Officer is debatable one is supported by the partial confirmation of it i.e. 25% by the CIT(A) vide his order dated 28th February, 2011. In view of the above, the penalty of Rs. 23,56,462/- imposed by the Assessing Officer u/s. 271 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Hon'ble Supreme Court that the initial burden of dischargingthe onus of rebuttal is on the assessee. Once the initial burden is discharged, assessee would be out of mischief unless further evidence was adduced. The assessee must give explanation which is bonafide and which is to be accepted, therefore, assessee has furnished inaccurate particulars of income and CIT(A) has wrongly relied upon the decision in Reliance Petroproducts (P) Ltd. (supra) and deleted the addition. 5. On the other hand, Ld. AR has submitted the copy of the decision of Tribunal and submitted that assessee has claimed deduction of Rs. 3,26,25,000/- towards management service fees paid to Modicorp Group. The expenditure has been incurred for technical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Petroproducts (P) Ltd. (supra) we find that for penalty for concealment of income if the assessee has made a claim of expenditure which was not accepted or was not acceptable to revenue by disallow not attract the penalty u/s 271(1)(c) of the Act for imposing the penalty there has to be concealment of particulars of income of the assessee secondly assessee must for furnish inaccurate particulars of this income. It is admitted fact that no information given in the return of assessee was found to be incorrect or inaccurate. The statement given by the assessee was not found to be factually incorrect hence prima facie assessee could not be held guilty for furnishing inaccurate particulars. Therefore, in this case the claim of the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
