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TMI Blog2016 (11) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... is no concealment of income thus levy of penalty is wrong. vi. The Commissioner of Income Tax (Appeals) has erred in holding that the appellant had inflated the interest liability. vii. The Commissioner of Income Tax Commissioner of Income Tax (Appeals) has erred in holding that appellant sought to evade tax by making wrong claims. viii. The aforesaid grounds of appeal are independent and without prejudice to one another. The appellant craves leave to add, amend, alter, or vary any of the aforesaid grounds of appeal before or at the time of hearing. 2. The facts in brief are that the assessee filed return of income on 29/10/2001 declaring total loss of Rs. 1,02,604/-. The case was selected for scrutiny and the assessment was completed under section 143(3) of the Income tax-Act, 1961 (in short "the Act") on 30/01/2004 at total loss of Rs. 23,59,37,001/-. In the assessment, the Assessing Officer made addition/disallowances on account of claim of interest to the bank of Rs. 19,71,86,237/-, loss on machinery of Rs. 3,29,27,354/-, bad debts of Rs. 6,20,000/- disallowance under section 28 of Rs. 1,22,67,221/- and loss of stock and machinery Rs. 14,35,85,117/-. Further, the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f disallowance/addition were duly disclosed in the return of income or the financial statement appended to the return of income and additions have been made due to difference of opinion or estimate basis. The assessee also pleaded that the tax sought to be evaded as per Explanation (iv) of section 271(1)(c) of the Act would be the difference between the tax due on income assessed and that the tax that would have been chargeable at such total income been reduced by the amount of concealed income and thus the penalty is levied on the basis of tax on the difference between the income assessed and income returned. The learned Commissioner of Income-tax (Appeals), however, did not accept the contention of the assessee and upheld the penalty levied by the Assessing Officer. Aggrieved, the assessee is in appeal before the Tribunal raising the grounds as reproduced above. 3. The learned counsel of the assessee filed paper book containing pages 1 to 127 and submitted that as against the returned loss of Rs. 1,02,604/-, the income was finally assessed at a loss of Rs. 22,56,51,125/- in the assessment order under section 254/143(3) of the Act dated 24/12/2009 and thus the assessed loss being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the authorities and the assessee is whether the quantification of the interest liability took place during the year or not, but the assessee made entire disclosure in respect of its claim of expenditure and no false or incorrect particulars have been filed by the assessee. The assessee has also filed explanation for the claim made by it and which is not a malafide. Similarly, the assessee furnished all particulars in respect of claim of interest of Rs. 36 lacs related to loan of Rs. 2 crores from the Indian Air Force Benevolent Fund (IAFBF), however, the interest was disallowed due to dispute of the quantification of the amount in the year. In respect of the claim of loss on the sale of the factory shade of Rs. 3,29,27,354/-, we find that it was duly disclosed and appropriate note was given to the notes to the account to balance sheet [note 16 para (a) to (d)]. Similarly, as regard to the loss of Rs. 14,35,85,117/- on account of stock and machinery, the assessee provided complete disclosure in the notes to account to the balance sheet (Schedules 16 - note No. 6) and on the basis of the details/explanations provided during assessment proceeding, the Assessing Officer made disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to the inaccurate particulars. 10. It was tried to be suggested that Section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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