TaxTMI 
TaxTMI 
2012 (11) TMI 17
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.... software development. It filed its return of income on 31-10-2002 disclosing total income at Rs. Nil. The assessment was finalised vide order passed u/s. 143(3) on 28-12-2004 determining the total income at Rs. 6,72,81,044/-. While finalizing the assessment, disallowance of Rs. 3,72,63,859/- was made on account of adjustments in respect of international transactions. Against the order of A.O., the assessee preferred appeal before CIT (A). CIT (A) vide his order dated 24-5-2006 confirmed the disallowance to the extent of Rs.1,38,13,859/-. A.O. initiated penalty proceedings on the additions made and vide order dated 23-3-2007 levied penalty u/s. 271(1) (c) on the aforesaid addition sustained by CIT (A) for the reason that according to the....
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....isclosure has been made in such a manner and it is camouflaged in such a manner that it needed deep scrutiny by the A.O. to find out other international transactions to arrive at the correct determination of income of the appellant as it has been found in this case by the A.O. that the appellant has incurred other international transactions like traveling expenses and legal fees on behalf of the Associated Enterprises. Thus, the disclosure made by the Accountant and the appellant is not true and correct, and not full disclosure and the information regarding all international transactions have not been reported, so it amounts to furnishing of inaccurate particulars of its income. The appellant is advised by a team of legal and professional e....
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....2B if any amount is disallowed or added in computing the total income, the amount added or disallowed shall be deemed to represent the income in respect of which particulars have been concealed or inaccurate particulars of income have been furnished. Provisions of Explanation 7 to section 271(1)(c) are akin to the provisions of Explanation 1 to section 271(1)(c). In both the Explanations, it is for the assessee to prove that the explanation was bona fide and a particular action or omission was in good faith and with due diligence. The burden cast on the appellant is heavy. As per Explanation-7 to section 271(1)(c), the appellant has to prove that the price charged or paid in such transactions was in accordance with the provisions of sect....
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.... HRM Functions 2,34,50,000 Travelling expenses 1,32,52,859 Legal expenses 5,61,000 Total 3,72,63,859 5. CIT (A) vide order dated 24-5-2005 held in favour of assessee with respect to additions made in respect of HRM function. However, the other two adjustments namely on account of traveling and legal expenses were upheld by CIT (A). 6. The Ld. A.R. submitted that the traveling expenses incurred by the assessee relate to the persons seconded to the aforesaid enterprises. A separate recovery was not warranted due to the business rationale namely that the secondment of the person leads to more offshore business for the assessee. The persons seconded get substantial amount of experience and knowledge which enhances t....
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....r hand the Ld. D.R. supported the order of A.O. and CIT (A). 8. We have heard the rival submissions and perused the material on record. It is seen that the A.O. has levied penalty on the adjustments made by the TPO with respect to international transactions. It is an undisputed fact that the international transactions were reported by assessee in Form 3CEB.Transfer Pricing adjustments have been made only in relation to certain activities stated by Transfer Pricing Officer to be of international transactions. The penalty under sec.271(1)(c) of the Act is leviable if the A.O. is satisfied in the course of any proceedings under the Act that any person has concealed the particulars of his income or furnished inaccurate particulars of such in....