9911796707
TMI Blog1991 (6) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... completed by the IAC (Asst) on 15th March, 1983 on a total income of Rs. 24,02,521. Various additions and disallowances were made which would be examined hereinafter on account of which the penalty proceedings were initiated by the IAC (Asst) under s. 271(1)(c). The appeal against assessment order was decided by the learned AAC vide his dt. 20th Feb., 1984. There was a further appeal to the Tribunal which was disposed of by the Tribunal vide its order dt. 3rd Dec., 1985 in ITA No. 515 and CO Nos. 31, 32 39/Jp/ 84. The IAC (Asst) after considering the assessee's reply to the show cause notice and its written arguments dt. 28th Feb., 1985, took the view that penalty was leviable on the assessee with reference to the amount of Rs. 12,01,102 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned Commissioner(A) took the view that these claims were false in the sense that they were exaggerated. Accordingly, he directed that penalty could be levied with reference to those items. 4. That is how the parties are in cross-appeals. In the cross-objection raised by the assessee, besides saying that no penalty was leviable, it has been said that the appeal filed by the Department was time-barred as it could be filed by 26th March 1987. However, we find from the appeal memos of ITA No. 287/Jp/87 filed by the Department that appeal had been filed on 27th March, 1982, the date of the communication of the order appealed against being 27th Jan., 1987. The appeal was, therefore, filed after 59 days as against 60 days and, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er was leviable under 271(1)(c). On the other hand, Shri S.K. Kundra the learned Sr. Deptl. Representative, relying strongly upon the penalty order passed by the IAC (Asst), submitted that the claims made by the assessee were false and neither debatable nor bona fide. He also submitted that it was not correct to say that all information was given by the assessee in the returns. He submitted that information was given only on the questioning made by the IAC (Asst). According, to him, the claims were unfounded and, therefore, the penalty levied by the IAC (Asst) amounting to Rs. 7,10,150 was entitled to be restored. 6. We have considered the rival submissions as also the decision mentioned above. By now it is well settled that a mere disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. The disallowance was confirmed by the learned Commissioner(A). The claim could not be said to be false. Moreover, there was no such finding in the assessments proceedings. So far as the item of Rs. 5,34,967 out of salaries, wages, and bonus is concerned, the assessee had given information vide letter dt. 17th Oct., 1982. The IAC (Asst) had taken the view that the liability accrued in the asst. yr. 1979-80 and not in the asst. yr. 1980-81. The assessee had explained vide letter dt. 28th Feb., 1985 that the amount was paid during the previous year in question in consequence of the decision of the Supreme Court. This was not followed on the ground that the assessee was following the mercantile system of accounting. It could not be said t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remises for inspection of the cables. This expenditure was treated as of the nature of entertainment and, therefore, disallowance was made under s. 37(2A). Here also the claim could not be said the other than bona fide or debatable. The next item of Rs. 18,592 was added on account of s. 37(3A). The detail were given by the assessee vide letter dt. 17th Oct., 1982. The IAC (Asst) treated it as a case of statutory disallowance. However, there is nothing on the record to show that the claim was false or not arguable. The next item of Rs. 83,900 related to duty drawback written off in 1968-69. The IAC (Asst) found that all draw back records upto 1972 had been destroyed in 1976 and, therefore, the irrecoverability was ascertained and decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounts of expenditure incurred on each of them were detailed. Further details were filed by the assessee vide letters dt. 15th Feb., 1983 and 28th Feb., 1985. The disallowance was made on the basis of the view taken on r.6D. After considering all the facts and the foregoing discussions, it could not be said that the explanations furnished by the assessee were false or that they were not bona fide or that complete facts relating to the computation of the assessee's income had not been furnished. Amounts which were ultimately allowed in the asst. yr. 1981-82, but which were claimed for the asst. yr. 1980-81 were those which were claimed under the bona fide belief that they pertained to the assessments year in question. The expenditure had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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