2013 (1) TMI 1010 - AT - Income Tax

Summary

Issues Involved:

1. Deletion of penalty imposed u/s 271(1)(c) of the I.T. Act.
2. Wrong grouping of expenses.
3. Non-payment of entry tax.
4. Provision for unpaid bonus.
5. Short term capital gain.
6. Non-deduction of tax at source on freight payment.
7. Applicability of judicial precedents.

Summary:

1. Deletion of Penalty Imposed u/s 271(1)(c) of the I.T. Act:
The Revenue appealed against the deletion of a Rs. 21 lakh penalty imposed by the Assessing Officer (AO) u/s 271(1)(c) for furnishing inaccurate particulars of income. The CIT(A) had deleted the penalty, concluding that the assessee admitted its liability without objection and agreed to the addition.

2. Wrong Grouping of Expenses:
The assessee admitted to a mistake due to wrong grouping of expenses under "rates and taxes," which led to an oversight in adding back Rs. 24,25,973/- to the income. The AO found that this mistake was detected during assessment proceedings, and the assessee agreed to the addition only after detection.

3. Non-payment of Entry Tax:
The AO found that the assessee did not pay entry tax amounting to Rs. 31,94,466/- and disallowed it u/s 43B. The assessee admitted the liability but claimed it was due to a dispute with the Sales Tax Department.

4. Provision for Unpaid Bonus:
The assessee made a provision for unpaid bonus of Rs. 4,85,000/- but did not pay it by the due date of filing the return. The AO added this amount to the total income as it was not paid within the statutory period u/s 43B read with 36(1)(ii).

5. Short Term Capital Gain:
The AO found discrepancies in the investment details and added Rs. 4,394/- as short term capital gain, which the assessee agreed to after detection.

6. Non-deduction of Tax at Source on Freight Payment:
The assessee admitted to not deducting tax on freight payments, resulting in an addition of Rs. 77,308/-.

7. Applicability of Judicial Precedents:
The CIT(A) relied on decisions in CIT vs. Dharampal Premchand Ltd. and Reliance Petro Products Pvt. Ltd. to delete the penalty. However, the Tribunal found these cases inapplicable as they involved wrong claims rather than furnishing inaccurate particulars. The Tribunal also distinguished the case from Price Water House Coopers Pvt. Ltd., noting that the assessee in the present case did not file a revised return or establish bona fide intentions.

Conclusion:
The Tribunal concluded that the assessee deliberately furnished inaccurate particulars with the intention to conceal income, and the penalty u/s 271(1)(c) was justified. The appeal of the Revenue was allowed, and the cross-objection of the assessee was dismissed as infructuous.