TaxTMI 
TaxTMI 
TaxTMI 
2009 (5) TMI 127
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....dings it was noticed by the AO that the assessee had claimed deduction under s. 80HHC at Rs. 1,52,63,904. The AO further noticed that assessee included interest income, miscellaneous income and excess provision written back in the profit without reducing 90 per cent thereof while computing deduction available under s. 80HHC of the Act. However, by applying the Expln. (baa) to s. 80HHC, the AO excluded 90 per cent of the aforesaid income and then worked out the deduction available to the assessee under s. 80HHC at Rs. 1,49,12,573. In other words, the AO allowed deduction under s. 80HHC at Rs. 1,49,12,573 as against Rs. 1,52,63,904 claimed by the assessee. Because of disallowance of deduction under s. 80HHC to the above extent, the AO initiated penalty proceedings under s. 271(1)(c) of the Act. 4. The AO further noticed that the assessee had claimed deduction under s. 80-I by working out the same at Rs. 38,93,476 but restricted the deduction to the available profit. The AO asked the assessee to give details as to when did the assessee start claiming deduction under s. 80-I. The assessee informed the AO that assessee was claiming deduction under s. 80-I since asst. yr. 1989-90. it be....
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....C and 80-I have been shown as Rs. 1.52,63,904 and Rs. 38,93,478 respectively. The total of deduction in column No. 18 is shown as Rs. 1,91,57,380. However, the total income in column No. 17 (code 102) has been shown as nil. In the body of the assessment order dt. 30th March, 2001 para 3, the AO has clearly mentioned that the appellant has claimed deduction under s. 80-I amounting to Rs. 38,93,478 but it has restricted this to available profit. Towards conclusion of the assessment order, para 5, the AO has taken the deduction of the assessment order, para 5, the AO has taken the deduction under s. 80-I as nil and total taxable income at Rs. 6,61,332. Thus, there is a clearly noticeable dichotomy between the assessment and penalty orders as far as the amount of deduction under s. 80-I is concerned. Also there is no justification why an amount should be subjected to penalty which has neither been claimed in the return of income nor has been put to an adverse view by the AO in the body of the assessment order. Hence, the AO is directed to consider the amount of Rs. 6,61,332 only as the concealed income for purposes of levy of penalty under s. 271(1)(c), he should recompute the amount o....
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....acts relating to the same and material to the computation of his total income have been disclosed by him, then the amount added or disallowed in computing the total income of such person as a result thereof shall for the purpose of cl. (c) of sub-s. (1) of s. 271, be deemed to represent the income in respect of which particulars have been concealed. In other words, the necessary elements for attracting Expln. 1 to s. 271(1)(c) may be stated as under: (i) The person fails to offer the explanation, or (ii) He offers the explanation which is found by the AO or the CIT(A) or the CIT to be false, or (iii) The person offers explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same have been disclosed by him. 13. If the case of any assessee falls in any of these three categories, then the deeming provision provided in Expln. 1 to s. 271(1)(c) comes into play, and the amount added or disallowed in computing the total income shall be considered as the income in respect of which particulars have been concealed, for the purposes of cl. (e) of s. 271(1), and the penalty follows. On the other hand, if t....
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....ence of opinion between the assessee and the AO. Simply because the assessee has claimed deduction under s. 80HHC with reference to the interest income and miscellaneous income without reducing 90 per cent thereof from the net profit is by itself cannot be a basis to hold that the assessee has concealed income or has made incorrect claim with a view to evade the payment of taxes. It is not the case of the AO that the interest income and miscellaneous income were not at all earned by the assessee in the course of carrying on its business activities or were patently assessable under the head "Other sources". The deduction has been disallowed by applying the provisions of Expln. (baa) to s. 80HHC without giving any finding that the assessee has failed to disclose all material facts relating to the computation of deduction under s. 80HHC or that the assessee's claim was false. In the light of the discussion made above, we are, therefore, of the considered view that the assessee's claim was bona fide and assessee has disclosed all material facts relating to the computation of deduction under s. 80HHC and, thus, the assessee has been able to discharge his burden that lay upon him under E....
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....he assessee has not explained as to why claim under s. 80-I was made in the return of income when the claim was not available to the assessee after the asst. yr. 1996-97. In the course of hearing of this appeal, the learned counsel for the assessee has submitted that merely because a claim was made but disallowed by the AO is by itself cannot be a basis to say that assessee has actually concealed income so that penalty under s. 271(1)(c) could be levied. However, in the light of the facts and circumstances of the case, we find that it is not a case where the assessee's claim has been disallowed because of any difference of opinion. It is also not the case where assessee has disclosed all papers, documents or basis in support of the claim under s. 80-I of the Act. 18. The decision relied upon by the learned counsel for the assessee are not applicable to the present case in as much as in the present case the assessee's claim under s. 80-I was not at all admissible and no details or particulars have ever been furnished by the assessee in support of the claim under s. 80-I of the Act. The assessee has even failed to furnish any reply to the AO in the course of assessment proceedings a....
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....t.27th March, 2001as to why claim of deduction under s. 80-I be not disallowed. It is thus, not the case where assessee has revised the original return of income voluntarily or has withdrawn the claim made under s. 80-I of the Act after knowing fully well that assessee was not entitled to a deduction under s. 80-I in the present assessment year i.e., asst. yr. 1998-99 in as much as the deduction under s. 80-I was available to the assessee only upto the asst. yr. 1996-97. Thus, this decision relied upon by the assessee's counsel does not support the assessee's case but rather it supports the view that since the assessee has not voluntarily disclosed that the deduction under s. 80-I was not available to it and has not withdrawn the same in the course of assessment proceedings, he is guilty of making a false claim in the return. 19. Next decision relied upon by the learned counsel for the assessee is the decision of the Hon'ble Delhi High Court in the case of CIT vs. Auric Investment & Securities Ltd. (2009) 310 ITR 121 (Del) where penalty under s. 271 (1)(c) was cancelled for the reason that the assessee's claim of business loss was disallowed by the AO by treating the same as specu....