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TMI Blog2015 (9) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. Asst. Commissioner of Income Tax, Circle-2, Kota erred in imposing the penalty U/s 271(1)(c) of the Income Tax Act and the ld CIT(A) Kota further erred in partially maintaining the penalty of Rs. 67,46,313/- under the facts and circumstances of the case. Hence the penalty of Rs. 67,46,313 imposed U/s 271(1)(c) of the Income Tax Act should be deleted." Ground of ITA No. 557/JP/2012 "On the facts and in the circumstances of the case, the ld CIT(A), Kota has erred in:- i) reducing penalty from Rs. 88,08,614/- imposed U/s 271(1)(c) of the Act to Rs. 67,46,313/- on the basis of Hon'ble ITAT, Jaipur Bench's order in quantum appeal which has not been accepted by the Department." 2. The sole ground of the assessee's appeal is against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that the assessee's claim as capital expenditure and subsequently abandoned that project (cement project) does not on that score convert what was an expenditure in the nature of capital expenditure into a revenue expenditure. The setting up of new project was clearly in the capital expenses and not revenue expenses. The appellant is engaged in the manufacturing of fertilizers and wanted to add a new project "Cement" and for that purpose, the appellant had incurred capital expenditure, which cannot be allowed in the facts and circumstances as revenue expenditure. The assessee's submission has been considered by the Assessing Officer and observed as under:- * AR's request for keeping the penalty proceedings in abeyance till the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 9 of the penalty appeal order and observed that the Hon'ble ITAT clearly held that expenses of Rs. 43,16,021/- only were revenue in nature and directed the Assessing Officer to allow the capital expenses of Rs. 1,73,53,860/- in A.Y. 2009-10 only if the Assessing Officer came to the conclusion that capital expenses of Rs. 1,73,53,860/- included in the cost of mining right i.e. intangible assets then such cost may be considered to be deducted against the sale of mining rights in A.Y. 2009-10. The ld CIT(A) held that Rs. 1,73,53,860/- were claimed capital expenditure was really revenue expenditure. Thus, the assessee tried to evade payment of taxes on the same. The assessee stated that the Assessing Officer had initiated penalty proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resulted in the creation of an asset or brought an enduring benefit to the assessee. Thus such expenditure cannot be classified as a capital expenditure. For allowability of expenditure in relation to expansion or extension of a new business in the inter-connection, inter-lacing and interdependence from the point of view of finance management and control. So long as there is unity of control, management and finance the two businesses would be treated as part of the same business and any expenditure incurred will have to be allowed as a revenue expense unless specifically capital in nature. He relied on the following case laws:- (i) CIT Vs. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC). (ii) S. A. Builders Ltd. Vs. CIT(A) (2007) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any evidence in support. Since the law that it is inadmissible is well established. The penalty U/s 271(1)(c) is liable to be imposed as held by the Coordinate Bench of Delhi ITAT in the case of Chadda Sugar P. Ltd. Vs. ACIT (2012) 17 ITR (Trib) 316. Similar view has also held by the Hon'ble Delhi High Court in the case of CIT Vs. Zoom Communication Pvt. Ltd. (2010) 327 ITR 510. The assessee offered the explanation but was not bonafide and found false. We have considered view that the appellant had furnished inaccurate particulars of income and concealed the income. The case law relied by the assessee are on mens rea or intention to conceal the particulars of income is to be proved by the revenue. The Hon'ble Supreme Court has held in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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