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TMI Blog2007 (12) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... preciation under s. 32 of the Act on the technical know-how by including it in the cost of plant. 3. The depreciation was disallowed by the AO on the opinion that it would amount to double deduction and the assessee is not entitled to double deduction. 4. Consequent to that order, penal proceedings under s. 271(1)(c) of the Act were initiated and penalty was levied, as the assessee had made excess claim, giving inaccurate particulars in order to evade tax. 5. Aggrieved by the order of the imposition of penalty by the AO, the assessee filed appeal before the CIT(A), who held that the assessee was under the bona fide impression that he was entitled to double deduction and claimed the same. He further recorded a factual finding that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court reported in CIT. vs. Hico Products (P) Ltd. (1991) 91 CTR (Bom) 61: (1991) 187 ITR 517(Bom) and the decision of the Supreme Court in Escorts Ltd. Anr. vs. Union of India Ors. (1992) 108 CTR (SC) 275: (1993) 199 ITR 43(SC) (cited supra) delivered by the apex Court on 22nd Oct., 1992, by which the law has been settled to the effect that the benefit of double deduction in respect of the same item was prohibited. 10. From the materials available on record, the Tribunal recorded a finding that it was clear that the assessee company had bona fide belief that it was entitled for two claims in respect of the same item under s. 35AB as well as s. 32 of the Act. The action of the assessee in claiming the benefit under the abovesaid pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; It signifies a deliberate act or omission on the part of the assessee. Such deliberate act must be either for the purpose of concealment of income or furnishing of inaccurate particulars. The term 'inaccurate particulars' is not defined. Furnishing of an assessment of value of the property may not by itself be furnishing of inaccurate particulars. Even if the Explanations are taken recourse to, a finding has to be arrived at having regard to cl. (A) of Expln. 1 that the AO is required to arrive at a finding that the Explanation offered by an assessee, in the event he offers one, was false. He must be found to have failed to prove that such explanation is not only not bona fide but all the facts relating to the same and m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, it would not be as heavy as the prosecution. [See P.N. Krishna Lal vs. Government of Kerala (1995) Supp 2 SCC 187]. The omission of the word 'deliberate', thus, mayor may not be of much significance. Sec. 271(1)(c) remains a penal statute. The rule of strict construction shall apply thereto. The ingredients for imposing penalty remain the same. The purpose of the legislature that it is meant to be a deterrent to tax evasion is evidenced by the increase in the quantum of penalty, from 20 per cent under the 1922 Act to 300 per cent in 1985. 'Concealment of income' and 'furnishing of inaccurate particulars' carry different connotations. Concealment refers to a deliberate act on the part of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as found in Shorter Oxford English Dictionary, Third Edn. Vol. I, is as follows: 'In law, the intentional suppression of truth or fact known, to the injury or prejudice of another.' The word 'concealment' inherently carried with it the element of mens rea. Therefore, the mere fact that some figure or some particulars have been disclosed by itself, even if it takes out the case from the purview of non-disclosure, it cannot by itself take out the case from the purview of furnishing inaccurate particulars. Mere omission from the return of an item of receipt does neither amount to concealment nor deliberate furnishing of inaccurate particulars of income unless and until there is some evidence to show or some circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndment) Act, 1975 w.e.f. 1st April, 1976, the later provisions being applicable to the assessment year in question, are substantially the same except that in place of the word 'income' in sub-cl. (iii) to cl. (c) of s. 271 prior to its amendment by the Taxation Laws (Amendment) Act, 1975, the expression 'amount of tax sought to be evaded' have been substituted. Explanation 4 inserted for the purpose of cl. (iii) where the expression 'the amount of tax sought to be evaded', was inserted had in fact made no difference insofar as the main criteria, namely, absence of tax continued to exist, prior to or after 1st April, 1976, changing only the measure or the scale as to the working of the penalty which earlier was with r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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