TaxTMI 
TaxTMI 
2012 (11) TMI 9
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....Development (iv) transfer price adjustment. During the appellate proceedings, CIT(A) upheld the additions made by the AO. Assessee preferred an appeal before the ITAT against the order of the CIT(A). Tribunal vide its Order (ITA No. 1227/Mum/2007) dt. 27-10-2010 deleted the addition made on account of depreciation of motor car. Matter regarding Modvat Credit was restored back to the file of AO. 3. Meanwhile the AO initiated proceedings u/s. 271(1)(c) of the Act in respect of the additions/disallowances i.e. item Nos. (i) to (iv) mentioned at paragraph 2. After considering the submissions of the assessee, AO levied the minimum penalty amount to Rs. 65,99,167/- for furnishing inaccurate particulars. In this regard, AO held as under: "The assessee has made claims as the allowable claims by hiding the merits and the bonafides of the case and thereby shown less income for the relevant year under consideration and offered the same for taxation. Thus, the assessee has made non-bona fide claims and thereby filed inaccurate particulars of income and also concealed the particulars of its income and therefore is liable for penalty u/s. 271(1)(c) and therefore penalty u/s. 271(1)(c) is levia....
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....k to the file or the AO by the Tribunal, so we are of the opinion that is a debatable issue. Penalty u/s. 271(1)(c) cannot be imposed for debatable issues. Hence, penalty imposed for unutilised Modvat Credit is also deleted. 7. It leaves us with the R&D expenditure. From the facts available on the file, it transpires that during the assessment proceedings AO had called for the details addition/deletion of fixed assets with date of purchase, cost of assets, date of installation along with supporting documents. Assessee produced only three bills and AO found that even those bills were not evidencing the claim made by the appellant. AO gave more than one chance to the assessee to prove his claim, but assessee did not avail the same for the reasons best known to him. In these circumstances AO levied penalty u/s 271(1)(c) of the Act. 8. Now, we would like to discuss the cases relied upon by the AR. In the case of Reliance Petro Product (P.) Ltd., Hon'ble SC has held as under: "A glance at the provisions of section 271(1)(c) of the Income-tax Act, 1961, suggests that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly, t....
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....amount of expenditure for Rs. 28,77,242/- under section 14A of the Act. By way of response to the show-cause notice regarding the penalty in its reply dated March 22, 2006, the assessee claimed that all the details given in the return were correct, there was no concealment of income, nor were any inaccurate particulars of such income furnished. It was pointed out that the disallowance made by the assessing authority in the assessment order under section 143(3) of the Act was solely on account of different views taken on the same set of facts and, therefore, they could, at the most, be termed as difference of opinion but nothing to do with the concealment of income or furnishing of inaccurate particulars of such income. It was claimed that mere disallowance of the claim in the assessment proceedings could not be the sole basis for levying penalty under section 271(1)(c) of the Act. It was submitted specifically that it was an investment company and in its own case for the assessment year 2000-01 the Commissioner (Appeals) had deleted the disallowance of interest made by the Assessing Officer and the Tribunal has also confirmed the stand of the Commissioner (Appeals) for that year a....
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....must have done so and must have found that the account books supported the claims for deductions, when the deductions were disallowed, by the Income Tax Officer on the ground that details information regarding them was not available, justice was not done to the assessees. It was not possible for the assessee to produce the original account books, which were destroyed in fire. There was however, other material mainly consisting of the auditors' reports from which it could be inferred that the deductions were properly supported by the relevant entries in the account books". In our humble opinion, case of Jay Engg. Works Ltd.'s case (supra) is about alternative material for assessment. In that case, account books were destroyed by the fire and it was impossible for the assessee to produce the same. Law never expects impossible to be performed. Here, assessee never had raised the issue of destruction of the evidences that could support the claim made by him. Neither before the AO nor before the CIT or ITAT, assessee had argued that evidences were destroyed. Not only in quantum proceeding even in the appellate proceedings said argument was not advanced any time. Besides, we have to dec....
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.... giving final opportunity to the assessee on 20.03.2006, the assessee so far, could not file or produce the proof in respect of the aforesaid addition. At that time of hearing on 14.03.2006, the assessee was informed that in case details of additions along with copies of the bills is not filed the same shall be disallowed. ....Under the income tax act, 1961, the onus is on the assessee to justify his claim for deduction/allowances by producing sufficient documentary evidences in support of his claim. It can be seen from the above that sufficient opportunity and time has been given to the assessee and in spite of which the assessee has chosen not to file the detailed in respect of the aforesaid items, and accordingly, I am constrained to disallow the same ...." 10. Deliberating upon the facts and circumstances of the case under consideration, we are of the opinion that the assessee had failed to prove the claim made by him in the return of income so, the AO was justified in levying penalty on him u/s. 271(1)(c) of the Act and that CIT(A) was also justified in upholding the same. We are also of the opinion that amount in question was part of the income of the assessee and that the p....
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....naccurate particulars can be levied. - When a revised return is filed after detection of concealed income and such return shows higher income, imposition of penalty for concealment or filing inaccurate particulars is considered to be proper. - Making a bogus claims of an expenditure/allowance is considered filing inaccurate particulars resulting in imposition of penalty u/s. 271(1)(c). - Withdrawal of a bogus claim for depreciation on non-existing assets in a revised return after search and seizure action is considered to be furnishing of inaccurate particulars. 11. In our humble opinion bogus claim and debatable claim are two different concepts. When an unreal thing or untrue fact is projected or presented as true or genuine same is termed to bogus. Courts are unanimous that for a debatable claim assessee cannot be penalised, but when he make a bogus claim levy of penalty is justified. A claim without supporting evidences like a body without life. Assessee is expected, rather required, not only produces evidence, but to produce positive evidence in respect of a claim made. Onus of proving a claim is always on the assessee and he has to be....