TaxTMI 
TaxTMI 
2013 (10) TMI 773
X X X X Extracts X X X X
X X X X Extracts X X X X
.... AO disallowed Rs. 11,58,112/- under the head of bad debts, Rs. 4,80,000/- under the head of membership fees and Rs. 2,76,700/- under the head of write back of non moving sundry creditors. The appeal of the assessee before the Ld. CIT(A) was dismissed by the CIT(A). Thereafter, the AO issued notice u/s. 271(1)(c) of the Act requiring the assessee to show cause why penalty should not be levied for concealing of its particulars of income and furnishing of inaccurate particulars of income. 4. In reply to the said notice, the assessee objected to the imposition of penalty on the ground that the AO has not recorded his decision in the top of the order but mentioned in the bottom of the order. The AO has not considered the contention of the as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd the details of which are as follows:- A/c. Year Amount 2001-02 2,27,086/- 2002-03 3,17,982/- Total: 5,45,068/- 7. It was submitted that it has been noticed in the assessment order as well as in the penalty order that goods worth about Rs. 5.45 lacs were received in the preceding two years and goods worth Rs. 4,41,840/- were received in the previous year relevant to the year under appeal i.e. A.Y. 2004-05, the total value of goods received in this year and immediately preceding two years was almost equal to the payments made during the year of Rs. 9,88,409/-. Thus it was reasonable to infer that the said payments were made for the value of goods received in these three consecutive financial years relevant to the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t balances written back meaning thereby the assessee had been itself analyzing the position of such accounts writing them back to the profit and loss account as and when necessary. The AO was not justified in applying his own subjective standards and making the addition which was wholly on the basis of conjectures and surmises. It was mentioned that three of those balances have been written back by the assessee itself in the next year and offered for tax. It was also submitted that the assessee's judgment should be honoured and the AO cannot apply his own subjective views for making an addition on conjectures and surmises. Thus, the addition was wholly unjustified. There is neither any concealment nor any furnishing of inaccurate particular....
X X X X Extracts X X X X
X X X X Extracts X X X X
....008 held by the Department was dismissed which is reported in 308 ITR 14. 10. Ld. CIT(A) after considering the submissions of the assessee deleted the penalty. 11. Ld. DR fully justified the order of AO levying the penalty. He argued that the bad debts claimed by the assessee were not allowable to the assessee as it was only an advance payment by the assessee regarding membership fee. It was submitted that the sum of Rs. 5 lacs was paid by which the assessee for next 25 years entitled to occupy a room in Le Meridian Hotel Sahar Air Port Mumbai or anywhere else in the world at subsidized rates. Thus the assessee got an enduring benefit and was not entitled to deduction of the entire amount and therefore the AO rightly allowed only 1/25....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... liable to penalty is unreasonable and unjustified. c) Complete details and explanation for all the issues related to additions were disclosed in return of income and thereafter during the course of assessment and appellate proceedings. The Ld. CIT(A) dismissed appellant's appeal, but the same is subjected to before Hon, ITAT, hence not final. Considering various case laws as relied on, the appellant cannot be held guilty for furnishing or disclosing true and full particulars and, therefore, not liable to be penalized. d) Considering ratio of various case laws and issue involved in all such additions, multiple interpretation is possible. The appellant considered such interpretation which is favourable to it and, therefore, its bonafid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and therefore by claiming deduction of balance amount of of Rs. 4,80,000/- the assessee is liable for penalty u/s. 271(1)(c) of the Act. Further the Ld. DR contented that in respect of non moving sundry creditors balances was bogus, therefore, the assessee was liable for penalty u/s. 271(1)(c) of the Act. Further in respect of bad debts of Rs. 11,58,112/- claimed by the assessee, Ld. DR submitted that the said amount was advance given by the assessee and therefore writing of the same is not allowable as bad debt to the assessee and as the assessee claimed deduction for the same the assessee was liable for penalty u/s. 271(1)(c) of the Act. We do not find any force in the above arguments of Ld. DR. We find that no specific error in the order....