TaxTMI 
TaxTMI 
2011 (12) TMI 286
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...., 225 ITR 798. Thus, the deduction of this amount was denied. Penalty proceedings u/s 271(1)(c) of the Act were also initiated by mentioning that the assessee has concealed the taxable income by claiming excess expenditure. These proceedings were completed on 28.03.2008 by levying the minimum penalty of Rs. 2,86,833/-. It was mentioned that the assessee furnished inaccurate particulars of income and hence it is a fit case for imposition of penalty u/s 271(1)(c). The levy was confirmed by the CIT(Appeals) by relying on the decision in the case of Union of India v. Dharmendra Textile Processors Ltd., [2008] 306 ITR 277 (S.C.) and CIT v. Escorts Finance Ltd., 183 Taxman 453 (Del). The assessee has challenged the levy on the grounds of non-recording of the satisfaction and also on merits. In this regard, five substantive grounds have been taken, which are disposed off on the basis of the submissions made by the rival parties. 2. In respect of challenge on ground of non-recording of satisfaction, the case of the ld. counsel is somewhat different from the ground taken in the appeal. Ground no. 2 states that no satisfaction has been recorded prior to initiation of proceedings u/s 271(1)(....
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....issued only after arriving at the satisfaction during the course of assessment proceedings. In this case, we have already come to the conclusion that the satisfaction has been recorded in the course of assessment proceedings. The only question is-whether, the satisfaction is in respect of concealment of income or furnishing inaccurate particulars of income? The AO has clearly mentioned that the assessee has claimed excessive expenditure of Rs. 7,80,500/- in respect of fees paid to Registrar of Companies for raising authorized capital. This amounts to furnishing inaccurate particulars of income, therefore, the words used "has concealed the taxable income" are inappropriate. However, that does not mean that the charge has not been clearly stated in the assessment order. There is a clear mention of claim of excess expenditure, which is also the basis for levy of penalty. In view thereof, the facts of the case of Ms. Madhushree Gupta (supra) are distinguishable. Since the charge has been clearly laid out in the assessment order, we are not able to persuade ourselves to accept the argument of the ld. counsel that the charge of inaccurate particulars of income has been raised for the fir....
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.... Accordingly, it is argued that the assessee used subterfuge to claim an expenditure which is clearly and prima facie inadmissible in view of two decisions of Hon'ble Supreme Court relied upon by the AO, which were rendered prior to filing the return of income. This is clearly a case of false claim. 4. We have considered the facts of the case and submissions made before us. The facts are that the assessee claimed an expenditure of Rs. 7,80,500/-, being the fees paid to Registrar of Companies for raising authorized capital. It is the admitted position of law that the expenditure is not revenue in nature and, therefore, it is not deductible in computing the total income. It is also the admitted fact that two decisions of the Supreme Court, adverse to the assessee, held field when the return was filed. This means that the claim is patently disallowable. It is also a fact that the claim is not discernible on the face of the record and the details of expenses have to be gone into in order to decipher the claim. The assessee's explanation is that it had taken an expert opinion from M/s Bajaj & Arora, who opined that the expenditure is revenue in nature. The assessee does not have expert....
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....distinguishable. Firstly, the Act makes it obligatory to obtain a certificate from chartered accountant for claiming deduction u/s 80-IB. To this extent, the chartered accountant statutorily assumes the role assigned to him for a particular purpose. No such role could be said to have been assigned to M/s Bajaj & Arora, who in any case had furnished the opinion for a limited purpose of the accounting for of the expenditure. Reliance has also been placed on the decision in the case of CIT v. Deep Tools (P) Ltd., 274 ITR 603. It has been held that there is nothing on record to show that the mistake of the chartered accountant was not bona-fide or it was not in accordance with the provision contained in section 80HHC(4). As in the case of A.B. Movies Pvt. Ltd., the facts of this case are also distinguishable. Reliance has also been placed on the decision in the case of CIT v. S. Dhanabal, 309 ITR 268. In this case the claim u/s 80HHE was based upon the certificate of the chartered accountant, therefore, the position is similar as in the case of A.B. Movies Pvt. Ltd. (supra). 4.3 Reliance has also been placed on the decision in the case of Bijli Investment (P) Ltd. v. ITO, rendered by ....
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....or increasing authorized capital. It is mentioned in the order that it is no doubt true that the claim is not admissible in the light of decision in the case of Brooke Bond India Ltd. (supra), but the fact remains that identical claim was allowed in the immediately preceding year, which would have given bona fide impression to the assessee that the claim is admissible. The facts of this case are also distinguishable because revenue itself had accepted the assessee's claim in the immediately preceding year leading to impression in assessee's mind that it is a deductible expenditure. No such allowance in this case was given in past. 5. On the other hand, the ld. senior DR relied on the decision in the case of CIT v. Escorts Finance Ltd., [2010] 320 ITR 44 (Del). It is mentioned that the court fails to understand as to how the chartered accountant, who is supposed to be expert in tax laws, could give such an opinion having regard to the plain language of section 35D. It is not the case of the assessee that the return was filed claiming the aforesaid deduction on the basis of the said opinion. Its case was that based upon the opinion of chartered accountant, it was mentioned in the pr....