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TMI Blog2018 (5) TMI 712X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged in the business of dealing in mobile phones, telecommunication instruments and accessories. For the assessment year under dispute, the assessee filed its return of income on 29.09.2012, declaring 'nil' income after adjusting brought forward losses of earlier years. During the assessment proceedings, the Assessing Officer on verifying the financial statements of the assessee found that a deduction of Rs. 43,36,290/- has been claimed as advertisement expenses. After calling for the details of such expenditure, he found that out of the total advertisement expenditure claimed by the assessee, an amount of Rs. 17,83,183/- was a provision made for expenditure on which the assessee has not deducted tax at source. Being of the view that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f penalty, as aforesaid, assessee preferred appeal before the CIT(A). 3. The learned CIT(A) after considering the submissions of the assessee, though was conscious of the fact that the assessee has accepted the additions made by the Assessing Officer however, he was of the opinion that penalty proceedings u/s. 271(1)(c) of the Act, being independent and separate from assessment proceedings, merely because the additions made by the Assessing Officer have become final, it will not automatically lead to imposition of penalty. The learned CIT(A) observed that in the course of assessment proceedings, the assessee has submitted all relevant information/details in respect of the expenditure claimed and has also explained the reason for claiming d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having furnished inaccurate particulars of income, the Assessing Officer has correctly imposed penalty u/s. 271(1)(c) of the Act. 5. The learned AR supporting the order of the CIT(A) submitted, though the amounts claimed as deduction were shown as provisions however, such expenditure have crystallized during the year and are ascertainable. He submitted, the fact that the assessee has furnished correct particulars of income is evident from the audit report where the auditors have certified the accounts of the assessee to be correct. He submitted, even the Assessing Officer has not found any defect or deficiency in the accounts of the assessee. He submitted the assessee is still showing the disputed amount as a liability. Explaining the rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount and is still showing them as liability. Aforesaid contention of the assessee appears to be correct, considering the fact that while completing the assessment, the Assessing Officer himself has determined the income at 'nil' after allowing set off of brought forward losses. Therefore, there cannot be any reason for the assessee to deliberately claim the expenditure even knowing that it is not allowable. That being the case, the allegation of the department that the assessee has furnished inaccurate particulars of income is not borne out from the record. More so, when the assessee has furnished full particulars of the expenditure claimed and its accounts are audited. Notably, the auditors have also not pointed out that the disputed amou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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