TMI Blog2015 (6) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... claim was not allowable. CIT(A) also observed that disallowance u/s. 43B is merely a technical disallowance and it cannot be inferred that it amounts to furnishing of inaccurate particulars or concealment of income. In our opinion the order passed by CIT(A) is based on cogent material and hence deserves to be accepted. Since explanation given by the assessee is substantiated by furnishing relevant particulars. It is for the Revenue to prove that the explanation furnished by the assessee is false. Whereas in the instant case no such material was furnished by the Revenue - Decided against revenue. - I.T.A. No. 235/Mum/2014 - - - Dated:- 26-6-2015 - Shri D.Manmohan (VP) Shri Sanjay Arora (AM) For the Appellant : None For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. Further the assessee increased the net income by an amount of ₹ 5 lakhs on account of prior period expenditure of Mulund unit whereas in the audit report of the said unit prior period expenditure was reported at ₹ 2.65 crores. Suitable adjustment was made by the Assessing Officer in that regard. The Assessing Officer further noticed that the assessee has not paid statutory liabilities before the due date of filing the return and hence provisions of section 43B are applicable and accordingly the same are added back to the income of the assessee. Consequent to the disallowances made, the net loss was reduced from ₹ 37.05 crores to ₹ 33.02 crores. Penalty proceedings were accordingly initiated by issuing notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e :- Claim of VRS: The assessee had made a mistake by excessively claiming ₹ 131.50 lacs as VRS expenditure. This is fully explained in our written submission at paragraph I of our submissions dated 20th May 2013. This aspect where a mistake made by the assessee is disclosed to the assessing authority before the completion of the assessment is covered by the following High Court decisions: I. CIT Vs. UNION ELECTRIC CORPORATION (2006) 281 ITR 266 (Guj) : In this case the wrong claim for expenditure was disclosed to the Assessing Officer before the completion of the assessment. No revised Return was filed. The Hon'ble Court held that there was no concealment. The case synopsis is enclosed as Annexure VI. II. CIT vs. MILEX ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stating On perusal .income of the assessee . This is stated in paragraph 2 of the penalty order. Thus the order has been passed without application of mind and penalty should be set aside in toto. Further there is no question of concealment as the figures were taken on the basis of data submitted with the Return. No mistake has been pointed in the computation of data of the assessee. The assessee being a Government Company has absolutely no reason for conceal or submit inaccurate particular. Thus no penalty be levied as making error in preparation of Return is not subject to penalty. This was held by the Hon'ble Supreme Court in the case of Price Waterhouse Coopers Pvt Ltd v/s CIT (2012) 348 ITR 306(SC) enclosed as Annexure IX. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed upto the year prior to that. Second one was Prior Period Adjustments which were not reflected in Audit Repot of that unit. Third one was disallowances u/s.43B. The appellant has submitted that the VRS payment claimed excessively came to their notice during the course of scrutiny and hence same was brought to the notice of the Assessing Officer vide their letter dated 16.1.2006, whereas the assessment order was passed on 15.12.2006. I have gone through the penalty order. As it is coming from the same that AO levied penalty for the reason that the assessee did not revise the return. Thus AO failed to appreciate the fact that it was assessee itself which has brought this excess claim to the notice of the AO. Merely non filing of revis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim was not allowable, cannot be basis for levying penalty and hence penalty levied by taking into account disallowances made of an amount of ₹ 2,64,89,175/- as Prior Period expenses, being not sustainable is deleted herewith. Coming to the third amount f or levying penalty u/s 271(1)(c) which are disallowance u/s.43B, again same being a technical disallowance cannot be considered as furnishing of inaccurate particulars or concealment of income. As the A.O. has levied penalty on disallowance of amount of ₹ 1,45,358/- and ₹ 5,11,586/- made u/s 43B , same being not sustainable is deleted herewith. As a result ground No. 7,8 and 9 which are grounds dealing with these three disallowances are allowed. 7. Aggrieved, the R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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