TMI Blog2020 (3) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. In our opinion, there is no doubt that in the return of income particulars filed by the assessee in respect of short-term capital loss, which has been adjusted against the short-term capital gain, are inaccurate. Excess claim of expenses and prepaid expenses - assessee admitted that it has wrongly claimed deduction of the whole of the amount of ₹ 6,73,440/- instead of ₹ 1,12,240/- pertaining to the year under consideration - HELD THAT:- Obviously the assessee has filed inaccurate particulars of income in the return of income filed, though later on assessee has accepted its mistake. AO cannot absolve the assessee for filing inaccurate particulars in the return of income and pardon him, if the assessee except the mistake and pay the tax on the same. This action of the assessee cannot be said to be voluntary. Further, the learned Counsel could not substantiate before us as how two opinion exists on the issue of prepaid expenses of corporate entrance fee disallowed by the learned Assessing Officer. CIT(A) has relied on the decision of Mak Data Ltd. [ 2013 (1) TMI 574 - DELHI HIGH COURT] wherein it is held that the statute does not recognize defences on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 1,20,304/- 3. Disallowance of prepaid expenses ₹ 5,61,200/- 4. Disallowance of excess expenses claimed ₹ 67,500/- (ii) Before the Ld. CIT(A), the assessee cha llenged addition under section 14A of the Act, which was deleted by the Ld. CIT(A) in his order dated 18/02/2013. The assessee had not challenged the other three additions mentioned above before the Ld. CIT(A). (iii) The learned Assessing Officer after providing opportunity of being heard to the assessee, levied penalty under section 271(1)(c) of the Act for default of furnishing inaccurate particulars of its income, in respect of the three additions. (iv) The Ld. CIT(A) upheld the said penalty levied by the Assessing Officer relying on the decision of the Hon ble Delhi High Court in the case of CIT Vs Zoom Communication Private Limited, 372 ITR 510 and decision of the Hon ble Delhi High Court in the case of Mak Data Ltd. ( 31 Taxmann.com 448) . 3. Before us, the learned Counsel of the assessee filed a paperbook containing pages 1 to 50. He referred to page 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this regard. It is apparent from the assessment order that the issue of addition u/s 94(7) of ₹ 1,20,304/- on account of short term capital loss incurred by the appellant has been wrongly claimed and was surrendered before the Assessing Officer during the course of scrutiny proceedings after making specific query by the Assessing Officer regarding adjustment of loss. The Assessing Officer has clearly mentioned in the assessment order that appellant has claimed dividend income of ₹ 73,11,218/- which includes dividend receipts from certain shares, on sale of which losses have been booked by the appellant which is not allowable u/s 94(7) of the Act. The provisions of section 94(7) states as under. Where (a) Any person buys or acquires any securities or unit within a period of 3 months prior to the record date; (b) such persons sells or transfer (i) such securities within a period of 3 months after such date; or (ii) such unit within a period of 9 months after such date; (iii) the dividend or income on such securities or unit received or receivable by such person Then, the loss, if any, arising to him on account of such purchase and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecific query by the Assessing Officer on this issue appellant has surrendered this amount which is disallowable as per the mercantile system of accounting followed by the appellant. During the penalty proceedings before Assessing Officer, appellant vide letter dated 20.04.2012 has claimed that this was due to an oversight and clerical mistake. During the appellate proceedings, the appellant has explained that two views were possible on account of entry fee expense in view of the decision of Gujarat High Court in the case of Gujarat State Export Corporation Ltd. 209 ITR 49 wherein it was held that entry fee is a revenue expenditure and allowable in the year of payment. The reply of the appellant was considered, however, it is found that before the Assessing Officer in the penalty proceedings appellant vide letter dated 20.04.2016 has conceded that this mistake was a clerical mistake before Assessing Officer and due to oversight this was wrongly claimed. However, before me during the course of appellate proceedings the appellant has changed its stand and relied on the above mentioned decision of Hon ble Gujarat High Court and explained that appellant was perfectly correct in claiming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and subscription before submitting the same before Ld. Assessing Officer during the course of assessment proceedings. Plea of the appellant was considered and found not acceptable as when specific query was made to the appellant to produce the details of fee and subscription account, this mistake was corrected and clearly this was not a bonafide correction on its own accord as claimed by the appellant. Hence, there is no merit in the submission of the appellant that the Act was suo-motu. The reliance by the appellant in the case of CIT vs. Reliance PetroProducts (SC) is not applicable on the facts of the case as in this case on Hon'ble Supreme Court has held that It was an admitted position in the instant case that no information given in the return was found to be incorrect or inaccurate. It was not as if any statement made or any details supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee could not be held guilty offunishing inaccurate particulars . In the instant case of the appellant has the addition made by the Assessing Officer was surrendered and there is no dispute on the addition made by Assessing Officer on legal grounds. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e consequence would be that the persons who make claims of this nature, actuated by a malafide intention to evade tax otherwise payable by them would get away without paying the tax legally payable by them, if their cases are. not picked up for scrutiny. This would take away the deterrent effect, which these penalty provisions in the Act have at of the company Hence, it is apparent that the observations of the Hon ble High Court in the above mentioned case is squarely applicable where the appellant was guided by a good team of auditors and has failed to point out who has erred in making such wrong claim in the return of income before Assessing Officer during assessment and penalty proceedings and before me during appellate proceedings. The decision of the case of Zoom Communications is again reiterated by Hon'ble' Delhi High Court in the case of Escort Finance Ltd. (328 ITR 044). Besides this in this very case the appellant has accepted the addition and surrendered the amount once a specific query was made by the Assessing Officer. The ratio of judgment of Hon ble Delhi High Court in the case of Mak Data Ltd. (31 Taxmann.com 448) is fully applicable in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 271(l)(c). The law does not provide that when an assessee makes a voluntary disclosure of his concealed income, he has to be absolved from penalty. [Para 7] Further, Hon'ble' 1TAT Delhi Bench has also given similar view in the case of NG Technologies Ltd. (57 taxmann.com 389) and held that Where against basic principle of; accountancy, assessee claimed capital loss on sale of fixed assets in profit and loss account and had not revised return voluntarily, penalty for concealment of income was justified Hon ble' ITAT in para 20 has held as under- Therefore, it is clear to us that the assessee had not filed revised return voluntarily but had filed the revised return after the Assessing Officer confronted the assessee and they were asked to explain how and why the loss on account of sale of fixed assets was claimed in the profit and loss account. The said loss, capital in nature and could not have been claimed in the profit and loss account . The case of NG Technologies Ltd. is further relied upon by Hon'ble' ITAT Delhi Bench in the case of Tera Construction Pvt. Ltd. (61 taxmann.com 317) It is relevant to point out that Hon'ble' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being pointed out, the assessee admitted that in voucher entry reference No. 6 dated 31/12/2007, the amount of fees and subscription was wrongly calculated at ₹ 63,000/- instead of ₹ 36,000/- and similarly in voucher entry reference No. 7, dated 31/12/2007, the amount of fee and subscription was wrongly calculated at ₹ 57,375/- instead of ₹ 16,875/-. 6.2 Similarly, the Assessing Officer observed one-time payment of ₹ 6,73,440/- on 30/05/2007 to M/s. Jaypee Greens for corporate entrance fee for five years from June, 2007 to May, 2012. The prepaid amount of ₹ 5,61,200/- was not allowable as per the Mercantile system of accounting followed by the assessee. The assessee admitted that it has wrongly claimed deduction of the whole of the amount of ₹ 6,73,440/- instead of ₹ 1,12,240/- pertaining to the year under consideration. 6.3 The contention of the assessee in all the three cases is that, the error was unintentional and was due to calculation error, and tax thereon has been offered voluntarily for taxation. The contention of the Revenue is that, had the mistake not pointed out by the Assessing Officer, the assessee would ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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