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TMI Blog2016 (7) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... dited by the well known accountants. The law was laid down much before the return of income was filed. Hence, in our opinion, the assessee now cannot absolve itself from levy of penalty u/s 271(1)(c) in view of explanation 1 to section 271(1)(c) by giving an explanation during the assessment proceedings that it disclosed all particulars before the AO or that the claim made by the assessee was due to bonafide error. Now, assessee cannot argue before us that the Apex Court decision itself can be distinguishable simply because the different High Courts had expressed different opinion. Once, the Hon’ble Apex Court laid down decision, it becomes the ‘law of the land’. Hence, the assessee comes within the purview of the explanation 1 of section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expenses were incurred for enhancement of authorized capital of the assesseecompany. The said amount of ₹ 1,29,48,645/- paid towards ROC fees was debited to the Profit Loss a/c and claimed as Revenue expenditure. Referring to the Apex Court decision rendered in the case of M/s Punjab State Industrial Development Corporation Ltd. Vs. CIT, AO observed that the ROC fees paid towards enhancement of authorized share capital was held to be in the nature of capital expenditure. The same was confronted with the assessee and as the expenditure incurred gives enduring benefit to the assessee, the assessee was asked to explain why the same should not be treated as Capital Expenditure and be disallowed. The AO noted that the assessee neither ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to levy penalty u/s 271(1)(c) for furnishing inaccurate particulars of income and for failure to furnish explanation during the course of assessment proceedings and also for failure to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by it. 3. Aggrieved, the assessee preferred an appeal before the CIT(A) 4. Before the CIT(A), the assessee submitted that it had duly reflected the expenditure in the profit loss account. Further, it was submitted that it is only a difference of opinion and the assessee had no intention of non-disclosure and relied on various case laws. 5. The CIT(A) relying on the decision of the Hon ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and claim of deduction. 4. The CIT(A) ought to have considered a fact that the assessee offered an explanation at the time of appeal which he is not able to substantiate as to how the expenses having enduring benefit on the revenue generating capacity of a concern is a revenue expenditure. 7. The ld. DR submitted that CIT(A) has allowed the assessee s appeal by citing that there is a difference of opinion on the issue whereas the facts are, the assessee claimed ROC fees as revenue expenditure whereas the same was held to be capital in lieu of the decision of the Hon ble Supreme Court in the case of M/s Punjab State Industrial Development Corporation (supra). There is no dispute, the same was confronted with the assessee, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various High Courts, it cannot be said that the claim of the assessee is totally wrong which led to inaccurate claim. 8.1 Ld. AR also submitted that the assessee claimed this expenditure in P L a/c and agreed for addition during the course of assessment proceedings when it is brought to the notice that this issue is settled in favour of revenue. He submitted that merely making a claim in P L account which is disallowable does not lead to concealment of income or filing of inaccurate particulars. 8.2 Ld. AR further submitted that CIT(A) has rightly allowed the assessee s appeal by considering the rationale of the Hon ble Supreme Court in the case of CIT Vs. Reliance Petro Products (P) Ltd. (supra). He also relies on the decision in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment u/s 143(3) of the Act, whereas in the remaining cases the return of income declared by the assessees in their returns accepted u/s 143(1). Therefore, the possibility of assessee filing return of income by intentionally giving wrong particulars/information with a hope that the return of income may not come under scrutiny and return of income may be accepted as filed on the basis of self-assessment cannot be ruled out. 11. Coming to the facts of the present case, we find that the assessee has not explained as to why it made the claim for the expenditure in the return of income when the Hon ble Apex Court laid down the law in the case of Punjab State Industrial Development Corporation Ltd. (supra) wherein the nature of expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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