9911796707
TMI Blog2021 (5) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... )(c) of the Income Tax Act, 1961 ["Act" in short]. 2. In the grounds of appeal, the assessee has challenged the show-cause notice issued under section 274 r.w.s. 271(1)(c) of the Act by stating that the Assessing Officer had not mentioned the exact charge as to the whether there is concealment of income or furnishing of inaccurate particulars of income and as such the notice issued under section 274 of the Act itself is invalid. 3. Brief facts of the case are that the assessee filed the return of income on 18.09.2013 admitting a loss of Rs..59,43,63,543/-. The assessment was completed under section 143(3) of the Act, by assessing the loss at Rs..49,82,53,477/- after making various disallowances. Accordingly, the Assessing Officer initiate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act 1961, should not be made. We hereby state that we have filed True and correct Return of Income. We have not concealed nor had given any in accurate particulars." 6. At the first instance, while replying to the penalty show-cause notice dated 28.12.2015, the assessee has not protested that the show-cause notice issued by the Department was not proper as there was no basis for issuance of the notice under section 271(1)(c) of the Act and both limbs in the said provision do not get attracted in assessee's case. Whereas, in the case law relied on by the ld. Counsel in the case of Babuji Jacob v. ITO(supra), the assessee has raised a specific plea that there was no concealment of income that he had not furnished inaccurate parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer would have escaped from the tax net. Since the assessee is very well aware of the provisions of the Act that the claim of expenses is not an allowable expense, the assessee has claimed the same in the profit and loss account, the Assessing Officer was of the opinion that the assessee has furnished inaccurate particulars warranting penalty and levied the penalty under section 271(1)(c) of the Act, which was confirmed by the ld. CIT(A). 8. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below including paper book filed by the assessee. The interest payable to Syndicate Bank was not paid by the assessee before the due date for filing of return of income, but, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the company incurred heavy losses from 2012-13 assessment year and the assessed loss for the said assessment is Rs..23,25,69,316. There is no intention to conceal or offer inaccurate particulars to evade tax". It is clear that the assessee has no intention to conceal or furnish inaccurate particulars and the assessee has voluntarily mentioned about the outstanding liability in its financial statements. Therefore, we are of the firm opinion that it is only a bonafide mistake on the part of the assessee. The assessee company has incurred huge loss and the business operations were permanently closed by 2013. Therefore, it does not make any base even if shown in the return of income or not. A mere making of a claim, which is not sustaina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nduring benefit, the Assessing Officer treated the same as capital in nature and brought to tax. Before us, it was the submissions of the ld. Counsel for the assessee that the assessee has claimed the export product development expenses as revenue expenditure only on the ground that the company's business operations were permanently closed since January, 2013. It was further submission that as there was no revival of business, the management of the assessee company decided to charge the same to the revenue account. It was further submission that once the condition of the assessee's business cannot revive anymore, there was no question of enjoying any enduring benefit for which the expenditure was incurred. However, the assessee has agreed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness was closed down permanently, the question of "enduring benefit" does not arise. Whether the expenditure is in the form of capital or revenue in nature are always debatable issue. Therefore, though the assessee has claimed the capital expenditure as revenue expenditure that itself is not sufficient to levy penalty. The non-acceptance of the claim of the assessee cannot tantamount to furnishing of inaccurate particulars warranting levy of penalty as has been held by the Hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts Pvt. Ltd.(supra). Even if the claim of expenditure by the assessee was taken to be wrong claim made, it does not amount to concealment of income or filing of inaccurate particulars and therefore, no penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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