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TMI Blog2016 (5) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellant : Shri Vivek Batra For The Respondent : Shri Niraj Sheth ORDER Per Sandeep Gosain, J. M.: The Present Appeal has been filed by the Revenue against the order of Commissioner of Income Tax (Appeals)- 8, dated 04.03.2013 for A.Y. 2003-04 on the following grounds of appeal. 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the penalty levied of ₹ 38,58,750/- u/s.271(1)(c) of the Act, on income for which inaccurate particulars filed resulting in concealment of income. 2. On the facts and in the circumstances of the case, the impugned order of the Ld. CIT(A) is contrary to law and consequently merits to be set aside and that of the Assessing Officer be restored. 3. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. 2. The brief facts of the case are that the return of income was filed on 30.10.2003 by the assessee thereby declaring total loss of ₹ 1,01,43,720/-. The assessment was completed u/s 143(3) of the I.T. Act,1961 on 13/02/2006 determining total income of ₹ 3,56,274/- by making additions of ₹ 1,05,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id payment was made with a view to acquire the rights of distribution of the film in certain territories. Since, the payment was made for acquiring a capital asset therefore the loss on becoming irrecoverable could not be allowed as business loss. It was argued that the assessee has intentionally claimed capital loss as business loss therefore the assessee has furnished inaccurate particulars of its income and reduced the tax liability. Ld. DR further argued that the financing or investing in distribution of film is not connected with the main object of the assessee company. Therefore, as per ld. DR the penalty was rightly levied by the AO. In the last setting aside of CIT(A) order was sought. 5. On the other hand, ld. AR representing the assessee submitted that the assessee has disclosed all the particulars of its income as well as expenditure etc. in its return and mere rejection of legal claim of assessee for taxable of income is not itself sufficient to warrant penalty upon the assessee. Since the assessee has disclosed full particulars therefore the question of concealment or furnishing inaccurate particulars does not arise. Ld. AR further argued that there are no findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being levied for concealment of income or for furnishing of inaccurate particulars of income. In the absence of such finding, the order would be bad in law.-Manu engg. Works 122 ITR 306 (Guj), New Sorathia Engg.Co 282 ITR, 642 (Guj), Padma Ram Bharali 110 ITR 54 (Gau): Thus, basis of satisfaction can not be altered subsequently by IAC.-CITv- Kejriwal Iron Stores 168 ITR 715 (Raj). 2.3(b) At this stage, it is necessary to understand the distinction between the two charges on the basis of which penalty can be levied i.e. (1) concealment of particulars of income and (2) furnishing of inaccurate particulars of income. It is the particulars of income which IS the common subject matter of both the charges which will be discussed later. The word 'conceal' as per Webster's Dictionary means to hide, withdraw, or remove from observation; cover or keep' from sight; to keep secret; to avoid disclosing or divulging. That means non disclosure of particulars of income. On the other hand, where particulars are disclosed but such disclosure is not correct, true or accurate, it would amount to furnishing of inaccurate particulars of income. For example, in case of businessman, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articulars of income. On the other hand, where charge against the 'A' is concealment of particulars of income, the AO has to establish either that 'A' has not disclosed the particulars of income under the main provisions or the case of 'A' falls within the scope of the deeming fictions created under the Explanations. For example, the 'A' might not disclose particular sales or dividend income or income from any source. Such instances would fall under the main provisions itself. In such cases, the burden is on the AO to establish the existence of the charge on the basis of material on record. 2.3(e) Explanation 1 creates a legal fiction and raises a presumption against the 'A . It provides that if in respect of any fact which is material to the computation of total income, 'A' (i) does not offer an explanation or offers an explanation which is found to be false by AO, OR (ii) offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all material facts have been disclosed then, the amount added or disallowed shall be deemed to be income in respect of which particulars are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 1.50 crores. We have also perused the P L A/c at page no. 34 where there is a disclosure by the assessee regarding the loss of film distribution in addition we have also perused page no. 37 of the paper book where schedule E which is part of balance sheet. It has been categorically mentioned there thatcompany entered into a joint venture for distribution of film and since the film could not do well therefore in order to exit from the venture the company had paid ₹ 1.50 crores as termination cost and therefore the same is booked as loss from joint venture. The source of said payment has been categorically shown at page no. 30 of paper book. 8. We have also perused the communications and correspondences between the assessee and M/s. M/s. Hormone Showbiz Pvt. Ltd., which are also part and parcel of paper book and since there arose occur dispute between the parties therefore, the agreement entered between the parties was cancelled by executing the deed of cancellation which is at page no. 74 of the paper book. 9. Now, the important question before us is to analyse as to whether in the present facts and circumstances the provision of section 271(1)(c) are attracted or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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