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TMI Blog2020 (3) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the claim of certain capital loss in view of the clear provisions of section 94(7) of the Act. In our opinion, there is no doubt that in the return of income particulars filed by the assessee in respect of short-term capital loss, which has been adjusted against the short-term capital gain, are inaccurate. Excess claim of expenses and prepaid expenses - assessee admitted that it has wrongly claimed deduction of the whole of the amount of 6,73,440/- instead of 1,12,240/- pertaining to the year under consideration - HELD THAT:- Obviously the assessee has filed inaccurate particulars of income in the return of income filed, though later on assessee has accepted its mistake. AO cannot absolve the assessee for filing inaccurate particulars in the return of income and pardon him, if the assessee except the mistake and pay the tax on the same. This action of the assessee cannot be said to be voluntary. Further, the learned Counsel could not substantiate before us as how two opinion exists on the issue of prepaid expenses of corporate entrance fee disallowed by the learned Assessing Officer. CIT(A) has relied on the decision of Mak Data Ltd. [ 2013 (1) TMI 574 - DELHI HIGH COURT] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- (ii) Before the Ld. CIT(A), the assessee challenged addition under section 14A of the Act, which was deleted by the Ld. CIT(A) in his order dated 18/02/2013. The assessee had not challenged the other three additions mentioned above before the Ld. CIT(A). (iii) The learned Assessing Officer after providing opportunity of being heard to the assessee, levied penalty under section 271(1)(c) of the Act for default of furnishing inaccurate particulars of its income, in respect of the three additions. (iv) The Ld. CIT(A) upheld the said penalty levied by the Assessing Officer relying on the decision of the Hon'ble Delhi High Court in the case of CIT Vs Zoom Communication Private Limited, 372 ITR 510 and decision of the Hon'ble Delhi High Court in the case of Mak Data Ltd. ( 31 Taxmann.com 448) . 3. Before us, the learned Counsel of the assessee filed a paperbook containing pages 1 to 50. He referred to page 14 of the paper-book and submitted that the short-term capital loss was adjusted against the short term capital gains on sale of motor cars by oversight & offered for tax and this being in the nature of mistake, no penalty should be levied. Regarding the penalty on the prepa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings after making specific query by the Assessing Officer regarding adjustment of loss. The Assessing Officer has clearly mentioned in the assessment order that appellant has claimed dividend income of ₹ 73,11,218/- which includes dividend receipts from certain shares, on sale of which losses have been booked by the appellant which is not allowable u/s 94(7) of the Act. The provisions of section 94(7) states as under. "Where (a) Any person buys or acquires any securities or unit within a period of 3 months prior to the record date; (b) such persons sells or transfer (i) such securities within a period of 3 months after such date; or (ii) such unit within a period of 9 months after such date; (iii) the dividend or income on such securities or unit received or receivable by such person Then, the loss, if any, arising to him on account of such purchase and sale of securities or unit, to the extent such loss does not exceed the amount of dividend or income received or receivable on such securities or unit, shall be ignored for the purpose of computing of its income chargeable to tax." From the above, it is apparent that appellant on the one hand has cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssible on account of entry fee expense in view of the decision of Gujarat High Court in the case of Gujarat State Export Corporation Ltd. 209 ITR 49 wherein it was held that entry fee is a revenue expenditure and allowable in the year of payment. The reply of the appellant was considered, however, it is found that before the Assessing Officer in the penalty proceedings appellant vide letter dated 20.04.2016 has conceded that this mistake was a clerical mistake before Assessing Officer and due to oversight this was wrongly claimed. However, before me during the course of appellate proceedings the appellant has changed its stand and relied on the above mentioned decision of Hon'ble Gujarat High Court and explained that appellant was perfectly correct in claiming full amount of entry fee as an expense in the year of payment. However, it did not press for the same as there could have been a dispute on the matter with the department. This clearly shows the conduct of the appellant and the change of stand that even by accepting the addition and claiming it as clerical mistake before Assessing Officer later on during the appellate proceedings appellant has changed its stand and claimed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he submission of the appellant that the Act was suo-motu. The reliance by the appellant in the case of CIT vs. Reliance PetroProducts (SC) is not applicable on the facts of the case as in this case on Hon'ble Supreme Court has held that " It was an admitted position in the instant case that no information given in the return was found to be incorrect or inaccurate. It was not as if any statement made or any details supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee could not be held guilty offunishing inaccurate particulars". In the instant case of the appellant has the addition made by the Assessing Officer was surrendered and there is no dispute on the addition made by Assessing Officer on legal grounds. Besides, this the case of Hon'ble Delhi High Court of Karan Raghav Exports Pvt. Ltd. also is not favorable to the appellant where Hon'ble Delhi High Court has held that when the legal provisions are debatable, penalty should not be imposed. Further in this case the assessee has made a note in the computation of income filed in the Return of income that on the basis of legal advice it had claimed depreciation. Hence, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the above mentioned case is squarely applicable where the appellant was guided by a good team of auditors and has failed to point out who has erred in making such wrong claim in the return of income before Assessing Officer during assessment and penalty proceedings and before me during appellate proceedings. The decision of the case of Zoom Communications is again reiterated by Hon'ble' Delhi High Court in the case of Escort Finance Ltd. (328 ITR 044). Besides this in this very case the appellant has accepted the addition and surrendered the amount once a specific query was made by the Assessing Officer. The ratio of judgment of Hon'ble Delhi High Court in the case of Mak Data Ltd. (31 Taxmann.com 448) is fully applicable in the case of the appellant where Hon'ble' High Court has held as under- There was absolutely no explanation from the assessee in respect of the amount surrendered. When the Assessing Officer called upon the assessee to produce the evidence as to the nature and source of the amount received as share capital, the creditworthiness of the applicants and the genuineness of the transactions, the assessee simply folded up and surrendered a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n voluntarily, penalty for concealment of income was justified Hon'ble' ITAT in para 20 has held as under- "Therefore, it is clear to us that the assessee had not filed revised return voluntarily but had filed the revised return after the Assessing Officer confronted the assessee and they were asked to explain how and why the loss on account of sale of fixed assets was claimed in the profit and loss account. The said loss, capital in nature and could not have been claimed in the profit and loss account". The case of NG Technologies Ltd. is further relied upon by Hon'ble' ITAT Delhi Bench in the case of Tera Construction Pvt. Ltd. (61 taxmann.com 317) It is relevant to point out that Hon'ble' ITAT has confirmed the penalty order even in the case where revised return has been filed by the assessees whereas in the case of the appellant no revised return was filed and the amount was surrendered at the time of assessment proceedings. after specific query made by the Assessing Officer. Hence, 1 find no infirmity in the penalty order of Assessing Officer and penalty imposed by the Assessing Officer is confirmed. {5}. In the result, the appeal is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Jaypee Greens for corporate entrance fee for five years from June, 2007 to May, 2012. The prepaid amount of ₹ 5,61,200/- was not allowable as per the Mercantile system of accounting followed by the assessee. The assessee admitted that it has wrongly claimed deduction of the whole of the amount of ₹ 6,73,440/- instead of ₹ 1,12,240/- pertaining to the year under consideration. 6.3 The contention of the assessee in all the three cases is that, the error was unintentional and was due to calculation error, and tax thereon has been offered voluntarily for taxation. The contention of the Revenue is that, had the mistake not pointed out by the Assessing Officer, the assessee would have taken the benefit. In our opinion, obviously the assessee has filed inaccurate particulars of income in the return of income filed, though later on assessee has accepted its mistake. The Assessing Officer cannot absolve the assessee for filing inaccurate particulars in the return of income and pardon him, if the assessee except the mistake and pay the tax on the same. This action of the assessee cannot be said to be voluntary. Further, the learned Counsel could not substantiate before ..... 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