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TMI Blog2012 (11) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... with due diligence - As in the present case the assessee has furnished all the required details called for from time to time. Assessee had also disclosed material facts before the A.O. The A.O. has not given any finding indicating that the assessee had failed to offer any information or the information provided was false. The assessee has not concealed any material fact and the information given by the assessee has not been found to be incorrect - in favour of assessee. - I.T. A. No.2050/AHD/2008 - - - Dated:- 19-10-2012 - SHRI G.C. GUPTA SHRI ANIL CHATURVEDI, JJ. Appellant by: Mr. S.N. Soparkar, Sr. Adv. Respondent by: Mr. Raj Mehra, Sr. D.R. ORDER PER: SHRI ANIL CHATURVEDI, A.M. This appeal is filed by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nish a copy of the Accountant s report in form 3CEB filed along with the return of income. It is found that in column 12 of the Annexure to the said report, the Chartered Accountant is supposed to give the details of international transactions entered into by the appellant with the Associated Enterprises by way of arrangement for allocation or apportionment of or any contribution to any cost or expense incurred or to be incurred in connection with a benefit, service, or facility provided or to be provided to any one or more of such enterprises. As per Annexure-E to the said clause 12 filed by the Accountant, it is seen that the Accountant has not reported anything about the cost of traveling expenses and legal fees incurred on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definitely charged or recovered the cost of traveling expenses and legal fees from its Associated Enterprises/subsidiary but has decided not to recover the same. The TPO has not allowed the same as business expenditure and has directed for adjustment to be made on account of those expenses to the income of the appellant. The A.R. has submitted that the concept of Transfer Pricing was a new concept and the law was evolving in the year under consideration. But this could not have prevented the appellant from disclosing the other international transactions, and the appellant could have given an explanation or a note saying that the international transactions in respect of traveling expenses and legal fees incurred by the appellant did not cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant. Accordingly, as the appellant has furnished inaccurate particulars of income and it is a deliberate act on the part of the appellant in not disclosing the said particulars of international transactions, in my view the A.O. has rightly levied penalty u/s. 271(1)(c ) of the Act is held to be justified and same is confirmed. 3. Aggrieved by the order of CIT (A), the assessee is now in appeal before us. 4. Before us, the Ld. A.R. submitted that the assessee had international transactions as defined in Sec. 92B of the Act with its associated enterprises. The said international transactions were duly reported in the Accountant s report in form No.3CEB. In order to determine the Arm s length Price for the international trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to exploring the option of incorporating the Belgium subsidiary. The assessee considered it to be genuine business expenditure on its bonafide belief that the expenses were incurred on commercial considerations and there was no intention to gain any tax advantage. It was further submitted that the transfer pricing adjustments were made only in relation to certain activities alleged by TPO to be treated as international transactions. The Ld. A.R. submitted that there is neither concealment of income or a case of furnishing of inaccurate particulars. All the details required were furnished including the transfer pricing study report. It was further submitted that there is no finding indicating that the assessee had failed to offer any info ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) the person offers explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same have been disclosed by him. If the case of an assessee falls in any of these three categories, then according to the deeming provision provided in Explanation1 to Sec. 271(1)(c) the amount added or disallowed in computing the total income shall be considered as the income in respect of which particulars have been concealed, for the purposes of Cl. (c) of Sec. 271(1), and the penalty follows. On the other hand, if the assessee is able to offer an explanation, which is not found by the authorities to be false, and assessee has been able to prove that such explanation is bo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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