TMI Blog1999 (8) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 24,59,210. The AO found that the assessee-company wrote back royalty provision amounting to Rs. 38,08,844 in the accounts but it did not consider it as its income for taxation purpose claiming that the liability to pay had not ceased. There was another claim of deduction on account of excise duty to the extent of Rs. 7,73,964 out of which a disallowance was made amounting to Rs. 32,728 as the liability has not been raised during the previous year under consideration. The penalty order dt. 30th Sept., 1992, indicates that the AO considered the claim of royalty amounting to Rs. 19,91,706 and claim of excise duty of Rs. 32,728 as having been concealed by the assessee or in respect of which inaccurate particulars have been furnished by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mental Representative drew support from the order of the AO and stated that the assessee has clearly misrepresented the facts before the AO and the learned CIT(A). He relied on various cases laws in CIT vs. Bennet Colemen Co. Ltd. (1993) 113 CTR (Bom) 391 : (1993) 201 ITR 1021 (Bom), (1994) 211 ITR 9 (sic), CIT vs. Agarpara Co. Ltd. (1985) 49 CTR (Pat) 356 : (1986) 158 ITR 78 (Cal), Swan Mills Ltd. vs. CIT (1995) 126 CTR (Bom) 113 : (1995) 215 ITR 1 (Bom), etc. The learned Departmental Representative further submits that the question whether the assessee's explanation was bona fide or not should be considered against the background of the assessee itself writing back the provision and treating it as income in the books of account, while a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the course of assessment proceedings. Reliance is also placed on the proviso to Expln. 1 to s. 271(1)(c) as well as the Departmental Circular No. 204 dt. 24th July, 1976. Further, the assessee's counsel relied on the following case laws in support of the plea that penalty under s. 271(1)(c) is not leviable merely on disallowance of claim of expenditure: (i) CIT vs. Shivlal Desai Sons 1977 CTR (Bom) 801 : (1978) 114 ITR 377 (Bom); (ii) CIT vs. Nepani Biri Co. Trust (1991) 190 ITR 402 (All); (iii) CIT vs. University Printers (1991) 188 ITR 206 (All); (iv) Narendra Kumar Rejendrakumar Jain vs. CIT (1988) 74 CTR (MP) 124 : (1988) 174 ITR 479 (MP); (v) CIT vs. Anand Water Meter Mfg. Co. (1979) 117 ITR 866 (P H); and (vi) CIT vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or filing up figures and also short answers in words to certain questions. A return form by itself does not clearly reflect the statement of affairs relating to the total income of an assessee unless it is supplemented by supporting statement. When the AO proceeds to make an assessment, he has to consider the return of income not in isolation but it has to be seen along with the statements accompanying the return. In the circumstances, we fully endorse the view taken by the learned CIT(A) that the assessee did not hold back any material fact or information relating to the claim of exemption made by the assessee while filing the return of income. Therefore, the primary ingredient of the alleged default under s. 271(1)(c) is lacking in this c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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