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TMI Blog2022 (3) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities thought it differently and disallowed the same. Merely because tax authorities has not allowed the expenditure claimed by the assessee it is certainly falls within the category of particulars declared by the assessee and the fact are same to the facts of CIT v. Reliance Petro Products (P) Ltd. [ 2010 (3) TMI 80 - SUPREME COURT ] Therefore, we are in agreement with the finding of the Ld.CIT(A), accordingly, we do not see any infirmity with the decision of the Ld.CIT(A). Accordingly, ground raised by the revenue is dismissed. - ITA NO. 8051/MUM/2019 - - - Dated:- 21-2-2022 - Shri Laliet Kumar, Hon'ble Judicial Member And Shri S. Rifaur Rahman, Hon'ble Accountant Member For the Assessee : Shri R.C. Jain For the Department : Shri Achal Sharma ORDER PER S. RIFAUR RAHMAN (AM) 1. This appeal is filed by the Revenue against order of the Learned Commissioner of Income Tax (Appeals) 17, Mumbai [hereinafter in short Ld.CIT(A) ] dated 24.10.2019 for the 2011-12. 2. Brief facts of the case are that, assessee e-filed its return of income for A.Y.2011-12 on 03.09.2012 declaring total loss of ₹.(-)20,01,24,010/. The return of income was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unication Division Nagpur, Meltron Audio Visual Division Mumbai, strategic Development division Pune, residential Flats situated at Mumbai and plot situated at thane were handed over to Maharashtra Industrial corporation Limited (MIDC) to look after the said assets. The Appellant being corporate entity, has to continue the activities such as maintenance of Office, staff for carrying the legal compliance of Ministry of Company affairs, Income Tax, and other Government Department. To carry out these activities the Directors of the company are taking care. The Board of Directors are appointed by GOM. Shri V. Giriraj ( Sr. IAS Officer) is over all in charge and looking after the business affairs as Director of Company. We respectfully submit that no individual is personally interested in the affairs of the Company. The Accounts of the Appellant Company was audited and singed on 06/02/2012 and ITR was filed on 03/09/2012. The appellant is Government Company and therefore the accounts has to filed with CAG and after resolution of the objection the CAG the accounts are treated as finalized. The appellant has filed return of income declaring loss of ₹ 17,79,28,792/as agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 (Cal.). 3.2 Before Hon. Supreme Court the question arose whether penalty u/s 271(1)(c) for making a Wrong claim was imposable and the dept relied on Dharmendra Textiles Processors 306 ITR 277 (SC) to argue that penalty was automatic for a wrong claim, HELD: (i) The mere fact that an addition is confirmed cannot per se fead to the confirmation of the penalty because quantum and penalty proceedings are independent of each other; (ii) In order for the deeming provision of Explanation 1 to s. 271(1)(c) to apply it must be show either that (a) the assessee fails to offer an explanation, or (b) he offers an explanation which is found to be false, or (c) he offers an explanation which cannot be substantiated or shown to be bona fide. (iii) The judgement of the Supreme Court in Dharmendra extile Processor which holds that penalty u/s.271(1)(c) is a civil liability and that willful concealment and mens rea are not essential ingredients for imposing penalty cannot be read to mean that in all cases where addition is confirmed, penalty shall mechanically follow. In order to attract s. 271 (1) (c), there must be concealment - the fact that the same is willful or unin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d has to be considered as business income as the same is being earned to take care of expenses to the extent possible and this has been so set off against the interest income for Asst Year 2013-14 in the appeal which is a matter of record. f) The losses so claimed would never be set off and the Government has no intention to claim the same as it has no personal interest in other cases. g) Hon'ble Supreme Court in case of CIT vs. Reliance Petro products (P) Ltd. (2010) 322 ITR 158 (SC), has held that merely because the assessee has made a claim of deduction which is otherwise not admissible penalty can not be automatically levied claimed. In view of this claim of deduction of interest expenditure which has not been accepted by the Revenue, penalty under s. 271(1)(c) is not attracted. Mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing in accurate particulars regarding the income of the assessee. Here there is no concealment on part on the appellant. The assessment proceeding and penalty proceeding are two diffident proceedings. If a particular claim made legitimately in the return of Income, and not allowed because of pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of CIT v. S.V. Angidi Chettiar [44 ITR 739]. 7. On the other hand, Ld. AR relied on the order passed by the Ld.CIT(A). 8. Considered the rival submissions and material placed on record, we observe from the record that assessee has wholly owned by the Government of Maharashtra and in view of continues losses and it became sick company under BIFR. The Government of Maharashtra has already taken a decision of winding up as its revival was not feasible. It is fact on record that this company is not wound up and administrative expenditure is to be incurred in order to maintain corporate structure till it is wind up. It is also a fact on record that assessee has borrowed from state Government financial institutions and it has to incur interest expenditure and assessee has huge unabsorbed depreciation as well as depreciation which is legally allowable deductions whether assessee uses or not, the above depreciation is allowable expenditure. We also observed that Ld.CIT(A) has observed in his report that assessee would never be able to set off the losses incurred due to the fact that Government of Maharashtra has no intention to continue the business. 9. On a car ..... X X X X Extracts X X X X X X X X Extracts X X X X
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