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TMI Blog2015 (9) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... it was held that the AO did not contradict the plea of the assessee that excess claim was an inadvertent error and the excess claim was not advantageous to the assessee, therefore, deletion of penalty was held as justified. It is clear that the mere making of a claim which is not sustainable in law, by itself will not amount to furnishing inaccurate particulars regarding the income of the assessee and such claim made in the return cannot amount to furnishing of inaccurate particulars. - Decided in favour of assessee. - I.T.A.No. 6460/Del/2013 - - - Dated:- 28-8-2015 - SHRI N.K. SAINI AND SHRI CHANDRA MOHAN GARG, JJ. For The Appellant : Shri K.V.S.R. Krishna, CA For The Respondent : Shri Atiq Ahmad, Sr. DR This appeal by the assessee has been directed against the order of CIT(A)-XVI, Delhi dated 30.09.2013 in Appeal No.43/12-13 for AY 2009-10 by which penalty order dated 30.5.2012 passed u/s 271(1)(c) of the Income Tax Act, 1961 (for short the Act) has been upheld confirming the penalty on the assessee. However, the assessee has raised as many as five grounds in this appeal but the crux of the case is contained in ground no. 1 which reads as under:- 1. The I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the returned income of the assessee. The assessee accepted the assessment order without agitating the issue further before higher forums. 4. Subsequently, the AO issued notice u/s 271(1)(c) of the Act to the assessee and after affording due opportunity of hearing, the AO imposed impugned penalty of ₹ 11,60,011 by holding that it is established beyond doubt that the assessee has furnished inaccurate particulars of income to the extent of ₹ 34,12,800 on account of disallowance of expenses written off u/s 35D of the Act. The assessee carried the matter before the first appellate authority but remained empty handed as the CIT(A) also dismissed explanation and contention of the assessee and upheld the penalty by passing the impugned order. Now, the assessee is before this Tribunal in this second appeal with the main ground as reproduced hereinabove. 5. We have heard arguments of both the sides and carefully perused the relevant material placed on record. Ld. AR submitted that the ld. CIT(A) has erred in confirming the order of the A.O. levying penalty u/s 271(1)(c) of ₹ 11,60,011/-. The appellant contends that there is no concealment of income or furnishing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, it cannot be alleged that either the assessee furnished inaccurate particulars of its income or has concealed particulars of its income in any manner. Ld. AR also pointed out that the claim of the assessee has not been found incorrect or bogus by the authorities below and hence, if part of the claim has been disallowed by the AO, that does not automatically attract penalty u/s 271(1)(c) of the Act. Ld. AR finally prayed that the penalty levied by the AO and upheld by the CIT(A) is bad in law and not sustainable in view of the ratio of the decision of Hon ble Supreme Court in the case of CIT vs Reliance Petroproducts Pvt. Ltd. (supra) and in view of the judgement of Hon ble Jurisdictional High Court in the case of CIT vs Brahmputra Consortium Ltd. (supra). Replying to the above, ld. DR supported the penalty order and the impugned order and submitted that in view of provisions of section 35D of the Act, the entire preliminary expenses are allowable in five equal instalments and the assessee made claim of entire preliminary expenses in the year wherein the assessee started business operations which was the wrong claim, therefore, penalty u/s 271(1)(c) of the Act was imposable on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14A of the Act specifically excluded the deductions in respect of the expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. It was further pointed out that the dividends from the shares did not form the part of the total income. It was, therefore, reiterated before us that the Assessing Officer had correctly reached the conclusion that since the assessee had claimed excessive deductions knowing that they are incorrect; it amounted to concealment of income. It was tried to be argued that the falsehood in accounts can take either of the two forms; (i) an item of receipt may be suppressed fraudulently; (ii) an item of expenditure may be falsely (or in an exaggerated amount) claimed, and both types attempt to reduce the taxable income and, therefore, both types amount to concealment of particulars of one s income as well as furnishing of inaccurate particulars of income. We do not agree, as the assessee had furnished all the details of its expenditure as well as income in its Return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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