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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 ..... penditure showing loss in its books of accounts - levy of penalty confirmed - Decided in favour of Revenue. - ITA No.1397(Mds)/2012 - - - Dated:- 15-11-2012 - Order The order of the Bench was delivered by Dr. O. K. Narayanan (Vice-President).-This appeal is filed by the Revenue. The relevant assessment year is 2006-07. The appeal is directed against the order of the Commissioner of Income-tax (Appeals)-I at Chennai, dated April 2, 2012. The appeal arises out of the penalty order passed under section 271(1)(c) of the Income-tax Act, 1961. A search under section 132 was conducted in the premises of M/s. Harvey Heart Hospitals Ltd. and Dr. M. P. Naresh Kumar on December 14, 2005. M/s. Harvey Heart Hospitals Ltd. is the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee-company. This addition was confirmed by the Commissioner of Income-tax (Appeals) as well as the Appellate Tribunal. The Income-tax Appellate Tribunal, Chennai, in their order dated February 26, 2010, passed in I. T. A. No. 1843(Mds)/2008, confirmed the addition made by the Assessing Officer on the ground that the assessee has not produced any sort of evidence to support its claim of expenditure, before any of the authorities, including the Tribunal. The Tribunal has also made a specific finding that in the absence of any material and evidence it cannot be accepted that the assessee-company has conducted research and development. In the light of the above addition, the Assessing Officer initiated penalty proceedings under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounting to ₹ 11,10,662. 2. The learned Commissioner of Income-tax (Appeals) has failed to note that the addition was upheld by the Income-tax Appellate Tribunal and that the addition was because of the assessee's failure to prove the expenses. 3. The learned Commissioner of Income-tax (Appeals) has failed to note that the assessee has furnished inaccurate particulars of income relating to claim regarding the expenses and that the same was not substantiated by it. We heard Shri Shaji P. Jacob, the learned Commissioner of Income-tax appearing for the Revenue and Shri C. V. Rajan, learned counsel appearing for the respondent-assessee. There is no dispute regarding the fact that the assessee had not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee that in spite of the above, it had carried on research and development activity. Two questions arise out of the above situation. The first question is whether the assessee-company had produced reasonable evidence to support its claim of incurring expenditure to the extent of ₹ 32,99,650. The answer is a categorical no . This position has been upheld even by the Tribunal. The assessee has not produced details or any evidence to support its claim of expenditure to the extent of ₹ 32,99,650. The second question is, if at all such expenses were incurred by the assessee, was it for the purpose of carrying on the business of the assesseecompany ? Any expenditure incurred by the assessee not for carrying on its busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year under appeal. In addition to that, even the claim is not supported by any evidence or material. Therefore, it is not a case where the assessee simply claims some expenditure. It is a case where the assessee is not showing any income, but at the same time claiming huge expenditure, thereby reflecting loss in its profit and loss account. The Commissioner of Income-tax (Appeals) has further considered the professional achievements of Dr. M. P. Naresh Kumar, the director of the assessee-company and the necessity of continuous research in the field of cardiology and cardiac surgery. We have no dispute with the above observation of the Commissioner of Income-tax (Appeals). But what we find from the record is that there are no detai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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