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TMI Blog2019 (1) TMI 1572X X X X Extracts X X X X X X X X Extracts X X X X ..... l statement and also before the revenue authorities. The only difference was that instead amortisation in five equal instalments, the assessee has claimed the entire amount in one year. We find merit in the submissions of AR that this is bonafide and inadvertent mistake on the part of the assessee - penalty has been imposed on a mechanical manner without specifying one of the two limbs on which the penalty was proposed to be levied and similarly in the penalty order both the limbs were specified which reflects a clear cut case of non-application of mind by the AO and mechanical application of law in imposing the penalty on the assessee. The case of the assessee is squarely covered by the decision of Reliance Petroproducts (P) Ltd., [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s.271(1)(c) of the Act. 3. Brief facts of the case are that the assessment was framed u/s.143(3) of the Act vide order dated 03.02.2014 showing total income at ₹ 14,82,53,110/- against the returned income of ₹ 14,71,33,110/-, hereby making addition of ₹ 11,20,000/- on account of disallowance of excess deduction claimed u/s.35DD of the Act. The said expenses claimed by the assessee were comprised of stamp duty and related expenses incurred for increase of authorised capital consequent to allotment of shares to shareholders of the demerged company M/s CMS Computers Ltd. and no new funds have been received by the assessee company and, thus, expenses were related to demerger of the company. As per the AO the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference between the return of income and assessed income represented the income in respect of which particulars have been concealed and, thus, justified in imposition of penalty. Third reason stated by the CIT(A) that the assessee has not disputed the disallowance before the appellate authority in previous as well as in current year and, therefore, it is presumed that the assessee has no objection for disallowance. The operative part of the order of the CIT(A) is reproduced as under :- 5. I have carefully considered the facts of the case and the submissions of the Id.AR. I have also gone through the decisions relied on by the AO and the Id.AR. The only dispute at the time of assessment was whether the expenditure i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction ( 1) under any other provisions of this Act. As there is no ambiguity in the provisions that only one fifth of such expenses are to be allowed, and the appellant has claimed hundred percent of such expenses incurred for increasing the authorised capital, it is evident that there is violation of statutory provisions which clearly attracts penal provisions. Secondly , as per Explanation-1 of section 271(1)(c), any amount added/disavowed in computing the total income when compared to returned income, such an amount should be deemed to represent the income in respect of which particulars have been concealed. In other words penalty u/s 271(1)(c) will attract if there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he revenue authorities. The only difference was that instead amortisation in five equal instalments, the assessee has claimed the entire amount in one year. We find merit in the submissions of ld. AR that this is bonafide and inadvertent mistake on the part of the assessee. Further we find that the penalty has been imposed on a mechanical manner without specifying one of the two limbs on which the penalty was proposed to be levied and similarly in the penalty order both the limbs were specified which reflects a clear cut case of non-application of mind by the AO and mechanical application of law in imposing the penalty on the assessee. The case of the assessee is squarely covered by the decision of the Hon ble Supreme Court in the case of R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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