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TMI Blog2014 (8) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ties are referred to as arrayed in I.T.T.A.No.126 of 2001. The respondent filed its returns for the assessment year 1991-92. The Income Tax Officer (I.T.O.) noticed that certain items of income were not shown in the returns. That included Rs. 4,91,805/-, which the respondent treated as written off, on account of the fact that the creditors were not either traceable or that it has become time barred and an amount of Rs. 9,85,988/-, representing the interest, written off by the concerned Bank. Ultimately, those two amounts were brought under the purview of the tax. The I.T.O. initiated proceedings under Section 271(1)(c) of the Income Tax Act, 1961 (for short the Act) proposing to levy penalty in respect of those two amounts. After consideri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so his case that the mere reflection of that amount in the books of account would not absolve the Assessee, of the liability to disclose the amount. He further contends that the appeal preferred by the respondent is bereft of any merit. It is argued that the respondent claimed the benefit of deduction of the second item on the basis of the unilateral declaration that the amounts due to him from various persons became irrecoverable. According to the learned Senior Counsel, the question of amount being written off would arise, if only any Court of law declares the debts as time barred or concerned creditor has expressed his intention to waive the same, and that none of those circumstances exist in the instant case. Sri Y.Ratnakar, learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew that the amount ought to have been shown as income under Section 41 (1) of the Act and accordingly, levied tax. That aspect has assumed finality. Another aspect noticed by the I.T.O. was that the first item representing the written off interest was not shown as an item of income and that also attracts Section 41 (1) of the Act. Having brought both the items under the purview of the tax, the I.T.O proceeded to initiate proceedings for levy of penalty under Section 271 of the Act. Show cause notice was issued and order of penalty was passed. In the appeal, the Commissioner sustained the penalty in respect of the second item and has set aside the one, as regards the first item. The Commissioner took the view that though the addition of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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