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TMI Blog2010 (5) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee company had earned a capital gain of ₹ 13,10,272/- on sale of investment against which capital loss of ₹ 8,56,072/- had been adjusted. The loss was claimed on account of sale of a depreciation asset being a portal site (in the block of assets computer and software ) as it was claimed that the portal site having a value of ₹ 11,31,072/- had been sold for a sum of ₹ 2,75,000/-. While completing the assessment,. The Assessing Officer disallowed the loss of ₹ 8,56,072/- by referring to the provisions of section 50(2) of the Act and accordingly initiated and levied penalty for concealment on the said disallowed. 3. Learned counsel for the assessee contends that books of account are awaited and have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e following issues :- (i) assessments are framed on limited simple scrutiny. Therefore the assessee was trying to take a chance with the Department that the mistake goes undetected; and (ii) the details were not furnished suo moto. It was contended that assessee has humbly stated that sample scrutiny norms cannot be known and anticipated by the assessee at the time of filing of return. The assessee cannot be assumed to have hatched out a scheme to avoid an ordinary amount of tax of ₹ 85,000/-. Mistake was inadvertently committed by the chartered accountant as soon as it was noticed during the course of assessment, assessee offered the same for taxation. 4.1 Assessee has been asked to prove as to how the inadvertent mistake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se as per section 50 (2) the claim of set off of loss was not eligible the penalty has been rightly imposed by CIT (A) by following observations : 2.4.1 Similarly, during the present proceedings, the Ld. AR could not adduce any justification as to why the said wrong claim of set off of loss which is not permissible as per law could be made at the time of filing of the return of income and which it was able to detect quite easily for during the course of the assessment proceedings. The AR is not right to say that the set off of claim has been surrendered voluntarily as the same has been done only after the Assessing Officer asked for the justification of the same. This is a case where the facts of the case law of CIT vs. Escorts Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was an inadvertent error, the penalty u/s 271(1)(c) should not be imposed. In Escorts Finance, the assessee claimed in the prospectus issued by it that the claim of the assessee was allowable as advised by chartered accountant. It was not the explanation that the claim was made on the basis of person who prepared the computation and filed the return. Hon'ble Delhi High Court in this case observed as under : 16. Insofar as claim of capital loss is concerned, the assessee is absolved by the authorities below on the ground that it was an inadvertent error which was corrected by the assessee itself by filling revised return and offering the same during the assessment proceedings. Admittedly, it happened while the assessment proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of set off of loss and has right from beginning explaining that the same was due to the inadvertent mistake of tax consultant. Hon'ble Delhi High Court in Escorts Finance Ltd (supra) also has held that where there is an inadvertent mistake penalty u/s 271(1)(c) should not be imposed. In that case, assessee s explanation that mistake was due to advice of chartered accountant published in prospectus about the allowability of claim was found to be not inadvertent. 7.1 The plea of the revenue that there is limited scrutiny in assessment and assessee took a chance cannot be accepted as the assessee cannot before hand at the time of filing return anticipate that his case will not be taken up in scrutiny and the amount of tax involved is l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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