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TMI Blog2014 (12) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... stand satisfied or not. Concealment or furnishing inaccurate particulars – Held that:- The assessee has clearly stated to have, as a part of its existing business, also tried to promote young talent in the field of sports, as a separate division, since FY 2000-01, incurring expenditure on salaries, rent, etc. since that year - assessee’s method of accounting, peculiar to its business, stands in fact accepted by the Revenue - there is no question of the assessee having failed to specify any event, which reason prevailed with the AO, so that a claim in its respect would arise only for the year in which the same stood incurred – assessee rightly contended that the fixed assets also includes fixture and fittings, claim qua which may be valid, being in respect of rented premises - the question of the assessee’s explanation being not found to be erroneous or false, in departure of the Revenue’s case, would arise only after the assessee furnishes one – thus, the matter is to be remitted back to the AO – Decided partly in favour of revenue. - I.T.A. No. 3695/Mum/2013 - - - Dated:- 27-11-2014 - Shri Sanjay Arora, AM And Shri Amit Shukla, JM,JJ. For the Appellant : Shri Sachchi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was incurred, so that it was a prior period expense for the current year and, thus, not deductible. The advances were again not shown to be in relation to any specific event. The write off was also not admissible u/s. 36(1)(vii) in-as-much as the requirement of section 36(2) was not met. Disallowance in the sum of ₹ 22.14 lacs was accordingly effected, and penalty proceedings initiated. The assessee s appeal before the first appellate authority could not be proceeded with in the absence of proper verification, i.e., as prescribed by law and, accordingly, dismissed as not maintainable. The assessee failing to respond to the notice u/s.274, penalty was imposed for the same reasons. Even though the bills for the purchase of fixed assets had not been produced, the same, even so, would only be capital expenditure and, as such, not admissible (refer para 2 of the penalty order). In appeal, the assessee found favour with the ld. CIT(A). The A.O s charge was that the expenditure had been incurred in the preceding years and, further, that the details of the capital expenditure had not been filed. The assessee, however, had given the details of the bills relating to the capital expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son of the assessee following, in view of the nature of its business, set off of accumulated balances in the year of revenue generation from a specified/particular event, as contended and sought to be projected before us by the ld. AR. In fact, the A.O. accepts the same, allowing the assessee s claim in respect of a balance, similarly written off, under the head World Open Squash . The prime, if not the sole, basis of the A.O. s denial of the assessee s claim is the non-furnishing of the relevant details, i.e., the events qua which the expenses are stated to have been incurred or accumulated. In the absence thereof, how could it be said that the expenses were incurred therefor and, further, written off due to the non-occurrence or the unlikely-hood of the relevant event taking place. In short, in the absence of the factual basis to the assessee s claim. The ld. CIT(A) s treatment of the assessee s appeal on merits is again cryptic and, in fact, inconsistent with the facts of the case, even as he delineates the issue arising for consideration correctly, i.e., as to whether the assessee could be considered as having concealed or furnished inaccurate particulars of income. He, how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; mens rea or willful neglect being not an essential ingredient thereof. The facts of its claim, per its return, being only in its know, the onus to explain the same is only on the assessee, which he is required to substantiate, further establishing his bona fides, as where there is proper disclosure of all material facts. The failure to do so would attract penalty, as indeed it would where the assessee offers no explanation, or same is found to be false. 3.4 Qua merits, we shall proceed to examine the case for both the disallowances: a) TMA (Rs.18.31 lacs): The A.O. s reason is that the genuineness of the claim has not been established inas- much as the assessee has failed to specify the event/s for which the expenses had been accumulated. Accordingly, its explanation that the balance written off represented revenue expenditure, accumulated for being set off on matching principle, could not be accepted, as was in fact its claim qua (expenses relating to) WOS. In the absence of specification of the events, the admissibility of expenses, where on the revenue account, could only be in the year the same were incurred. In any case, to the extent the expenditure is admittedl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ze, so that the same stood forfeited or represents a loss as the event/s became unlikely, etc. It needs to be appreciated that in the absence of the relevant details, the explanation is no more than a bald assertion, and would thus not even qualify to be an explanation, even as clarified time and again by the honourable courts. The status continues to be so even before the ld. CIT(A). The question of the assessee s explanation being not found to be erroneous or false, as stated by him, in departure of the Revenue s case, would arise only after the assessee furnishes one. There being, however, even as observed earlier, lack of application even by the Revenue authorities, we only consider it fit and proper under the circumstances to restore the matter back to the file of the A.O., who shall decide the matter by issuing definite findings of fact, allowing the assessee a reasonable opportunity to present its case before him, i.e., to substantiate its explanation. We decide accordingly. 4. In the result, the Revenue s appeal is partly allowed and partly allowed for statistical purposes. Order pronounced in the open court on November 20, 2014 at the conclusion of the hearing its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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