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TMI Blog2013 (11) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... cember 14, 2005. M/s. Harvey Heart Hospitals Ltd. is the assessee before us. The assessee, M/s. Harvey Heart Hospitals Ltd., was incorporated in 1996. Dr. M. P. Naresh Kumar, a renowned cardiac surgeon, is the managing director of the company. He was also one of the promoters of the company. The assessee-company has not carried out any business activity in the previous year relevant to the assessment year under appeal. This is because the assessee-company has sold all its fixed assets to M/s. Harvey Health Care Ltd. In the return filed by the assessee for the assessment year 2006-07, no income was disclosed in the accounts of the assessee. At the same time the assessee-company has claimed an expenditure of Rs. 32,99,650. This expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty proceedings under section 271(1)(c). After hearing the assessee, the Assessing Officer found that it is a fit case for levying penalty under section 271(1)(c) for concealment of income and also for filing inaccurate particulars in claiming expenditure to the extent of Rs. 32,99,650. The Assessing Officer levied a penalty of Rs. 11,10,662 under section 271(1)(c) of the Act. The penalty was taken in the first appeal before the Commissioner of Income-tax (Appeals)-I at Chennai. The Commissioner of Income-tax (Appeals) observed that the foundation for levy of penalty in the present case is that no evidences were produced for the claim at any stage. He further observed that the assessee had already incurred losses and only the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see had not carried on any business in the previous year relevant to the assessment year under appeal. This is because all the assets of the assessee-company were sold to M/s. Harvey Health Care Ltd. Obviously, the assessee-company did not show any income for the assessment year under appeal. At the same time, the assessee-company has claimed an expenditure of Rs. 32,99,650 under various heads like salary, wages and bonus, interest and travelling expenses, etc. It is an undisputed fact that the assessee-company could not produce any sort of evidence before any of the authorities to prove and support the incidence of expenditure in the previous year relevant to the assessment year under appeal. This factum has been highlighted by the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled for deduction in computing the taxable income. The assessee had already sold off its assets. It has also discontinued its business. In such circumstances, it cannot be believed that even if the expenses were incurred by the assessee-company, those expenses were incurred for the purpose of carrying on the business of the assessee company. Therefore, in the facts and circumstances of the case we come to the conclusion that the claim of expenditure made by the assessee-company almost amounts to a false claim. Therefore it is a clear case of concealment of income by furnishing of inaccurate particulars. Furnishing of inaccurate particulars is highlighted not only by absence of evidence but also by the stoppage of the business carried ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esearch carried out by the assessee-company. Not only in medicine, in every field of science and technology research and development is an ongoing process. But, that general plea alone is not sufficient for the purpose of income-tax. An assessee has to furnish the details of expenditure and the outline of research and development carried out in the course of carrying on of its business. The Commissioner of Income-tax (Appeals) has relied mainly on the reputation of Dr. M. P. Naresh Kumar and his wife Dr. Mrinalini as leading researchers in their professional field. But, here also the Commissioner of Income-tax (Appeals) does not speak anything about the details furnished before him. Therefore, in the facts and circumstances of the case, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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