TMI Blog2010 (10) TMI 1216X X X X Extracts X X X X X X X X Extracts X X X X ..... ded on the following two conditions i) adhoc disallowance of expenses ₹ 1,00,000/- ii) disallowance of claim u/s 80HHE ₹ 3,03,370/- 3. The other grounds raised by the assessee are only in the nature of the arguments in support of this ground. 4. Brief facts of the case are that the assessee is a private limited company engaged in the business of trading and exporting the parts of computer and software. The assessee filed return of income declaring NIL income along with the Tax Audit report, Audited Profit and Loss account and form no.10CCAF for claiming the deduction under section 80HHE. The assessee debited the expenditure under various heads to the tune of ₹ 4,11,42,118/- which included expenses on de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished. Therefore, when the expenditure was not found as bogus but the adhoc disallowance is made only because of nonproduction of the complete details then the penalty is not warranted in regard to the said disallowance. As regards the claim of deduction u/s 80HHE, the learned AR has submitted that the claim was made on the basis of Tax Audit Report and it was a bonafide mistake even on the part of the Auditor of the assessee. The assessee has acted in bonafide belief in claiming the said deduction. Thus, the claim u/s 80HHE was disallowed because for the assessment year under consideration, the deduction was not available to the assessee and not because of the assessee was not eligible. He has referred the Form No.10CCAF and submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t report as well as certificate of the auditor being a technical matter. The assessee s claim is only based on the auditor s report . Therefore, it is clear case of bona fide belief of the assessee while making the claim of deduction u/s 80HHE, though the same was not available for the assessment year under consideration as hit by sunset clause of the provisions. It is pertinent to note that the claim of the assessee is not bogus but it was not allowable because the holiday period was over. Even if the claim made by the assessee on bonafide belief is not allowable under law, the same does not constitutes concealment of particulars of income when all the necessary and primary facts have been disclosed by the assessee before the AO and are on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a similar claim was also made for the year ended 31.03.2002 where such expenses amounted to ₹ 2,51,132/-. The Schedule 3 to the Accounts, which is the Fixed Assets Schedule (page 5 of the Paper Book) shows that depreciation of ₹ 9,15,369/- was claimed with reference to the boat and this figure is included in the total depreciation of ₹ 11,60,538/- debited to the Profit and Loss Account. The claim received the attention of the Assessing Officer in the course of the assessment proceedings. The assessee had furnished the amenities and service agreement with both Star India Pvt. Ltd. and Jet Airways India Pvt. Ltd. for the perusal of the Assessing Officer, which did not contain any provision to the effect that the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u (1987) 165 ITR 63 (Mad); and Calcutta High Court in Burmah Shell Oil Storage Distributing Company of India Ltd. (1987) 163 ITR 496 (Cal), where it has been held that by merely making a claim for expenditure the assessee cannot be held to have concealed its income or furnished inaccurate particulars, recently the Supreme Court has taken the view in CIT vs. Reliance Petroproducts Pvt Ltd., cited supra, that the making of an incorrect claim does not amount to concealment of income or furnishing inaccurate particulars thereof if the information given in the return is not found to be incorrect, and in our humble opinion the present case falls within the ratio laid down in all these judgments. As in the case before the Supreme Court, in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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