TaxTMI 
TaxTMI 
2013 (7) TMI 354
X X X X Extracts X X X X
X X X X Extracts X X X X
....nder Section 43B -- Rs. 1,18,17,103/-. (ii) Disallowance of depreciation on BSE membership rights -- Rs. 7,71,240/- (grounds of appeal). 2. The facts, in brief, are that the assessee is engaged in brokerage business and was holding BSE Card in Mumbai Stock Exchange. In this case, return of income was not filed under Section 139(1) of the Act. A proceeding under Section 147 was initiated vide notice under Section 148 dated 26.07.2006. In response to the said notice, a return of income was filed on 14.08.2006, declaring loss of Rs. 1,73,58,260/- which was duly accompanied by profit and loss (P&L) account and balance sheet. In the P&L account, the assessee had claimed financial cost consisting of bank interest amounting to Rs. 1,18,17,103/- ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by the Assessing Officer, the assessee has disallowed the same in the revised computation. Moreover, the assessee has been incurring huge losses which have not been carried forward and even in this year also, the assessee has incurred huge losses which have not been claimed for set off. Thus, there was no intention of the assessee for evading any tax and disallowance under Section 43B was purely on account of bonafide mistake of the tax consultants. The learned CIT(A) rejected the assessee's explanations and upheld the levy of penalty on such a disallowance. Regarding claim of depreciation on BSE Card also, the levy of penalty was confirmed on the ground that it has been confirmed by the Income-tax Appellate Tribunal, in way that assessee ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d on 31.12.1997 and the Hon'ble Supreme Court in the case of Techno Shares and Stock Ltd. reported in 320 ITR 323 has held that BSE Card is an intangible asset, entitled for depreciation, which has been acquired after 01st April, 1998. Therefore, even though assessee's card was acquired few months earlier, it cannot be held that assessee's claim for depreciation was not bonafide and moreover, it is purely a legal issue. He also relied upon the ITAT, Mumbai Bench decision in the case of M/s V N Private Securities Ltd. wherein it was held that the card acquired prior to 01.04.1998 is also entitled for depreciation and is allowable in the earlier years. Thus, there was one possible view available in favour of the assessee. 6. On the other han....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... peculiar facts of the case. Regarding the learned counsel's contention that there was no tax evasion in this case as the assessee was incurring heavy losses which has not been carried forward or has been claimed for set off, he submitted that for levy of penalty, tax evasion is not necessary, the penalty is levied on account of concealment of income and furnishing of inaccurate particulars. He submitted that even a wrong claim is liable for penalty in view of decision of Delhi High Court in the case of Kanchen-Junga Advertising (P) Ltd. vs. CIT reported in [2012] 340 ITR 595. He also relied upon the Hon'ble Supreme Court decision in the case of K.P. Madhusudhan vs. CIT reported in 251 ITR 99. In this case, he submitted that on both the acc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mendments every year and at times even the tax expert loose track of such amendments and the provisions brought in the statute every year. The assessee has duly disclosed the particulars of interest payable in the balance-sheet, however, it could not disallow the interest payable at the time of computation of income as this was the first year in which such a claim was to be disallowed in view of Section 43B. Under these circumstances it can be held that there was a genuine inadvertent mistake by the tax consultants in this case. The ratio laid down by the Hon'ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd vs. CIT & another (supra) wherein the Hon'ble Supreme Court has concluded that if there is a bonafide and inadvertent....