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TMI Blog2018 (7) TMI 660X X X X Extracts X X X X X X X X Extracts X X X X ..... of this case, therefore, correctly reached this conclusion. The question of law is answered in favour of the assessee and against the Revenue - ITA 43/2017 - - - Dated:- 9-7-2018 - HON'BLE MR. JUSTICE S. RAVINDRA BHAT And HON'BLE MR. JUSTICE A.K. CHAWLA For the Appellant : Sh. Zoheb Hossain, Sr. Standing Counsel with Sh. Deepak Anand, Jr. Standing Counsel For the Respondent : Ms. Kavita Jha and Sh. Vaibhav Kulkarni, Advocates ORDER Mr. Justice S. Ravindra Bhat 1. The following question of law arises in the revenue‟s appeal, under Section 260A of the Income Tax Act, 1961 (hereafter the Act‟): Did the Income Tax Appellate Tribunal (ITAT) fall into error in holding that the assessee/responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee that the capital work in progress was written off during the year as 'Metal Part Project' had become unviable. The machinery purchased for metal project had not been capitalized and was shown under the head 'Fixed Assets' as capital work in progress. No depreciation was ever claimed. Since the machine was not capitalized and had to be eventually written off, the assessee claimed the loss as a revenue loss. The Assessing Officer (AO) accepted that there was a loss but declined to accept it as a revenue loss. The assessee unsuccessfully approached the Commissioner of Income Tax (CIT) and the Income Tax Appellate Tribunal (ITAT); these appellate authorities declined the assessee s plea that writing off these amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tilized or deployed could not have been permitted. It was argued that Section 271 (1) (c) is not concerned with intention, or mens rea, but rather with the claim, which may be inaccurate and but for scrutiny, could not have been made at all. By putting forward an untenable claim, speculatively, in a manner of speaking, the assessee took a chance. 7. Section 271(1) (c) of the Income Tax Act, 1861 is reproduced below: Section 271 (1) If the Assessing Officer or the Principal Commissioner or Commissioner (Appeals) or the Principal Commissioner or Commissioner in the course of any proceedings under this Act, is satisfied that any person (c) has concealed the particulars of his income or furnished inaccurate particulars of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealed' that there has been a deliberate act on the part of the assessee. The meaning of the word 'concealment' as found in Shorter Oxford English Dictionary, third edition, Volume 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, 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 non-disclosure, it cannot by itself take out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g inaccurate particulars of income was explained by the Supreme Court in the case of Commissioner of Income Tax vs Reliance Petroproducts Pvt Ltd [(2010)322 ITR 158] by bifurcating particulars and inaccurate where particular was explained to include the details of a claim, or the separate items of an account. The word inaccurate was explained as not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript. When these words are read in conjunction with each other then it may seem that the details supplied in the Return are not accurate, not exact or correct, not according to truth or erroneous. No doubt, the effect of that judgment has been explained in a later decision; yet i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing of inaccurate particulars. [Para 7] Similarly, in the present scenario, the assessee cannot be penalized for making a claim which in itself is unsustainable in law. The Supreme Court further held in the Reliance Petrochemicals case that- Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the revenue, that, by itself, would not attract the penalty under section 271(1) (c). If the contention of the revenue was accepted, then in case of every return where the claim made was not accepted by the Assessing Officer for any reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X
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