TaxTMI 
TaxTMI 
TaxTMI 
2014 (1) TMI 489
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....with business objects of hospitality, including managing hotels and restaurants and in furtherance thereof entered into an agreement on 10-10-2005 with AHPL to take over the management of restaurant and bar under the name and style of "Climax". For attraction of customers it was decided to renovate, refurbish and improve the existing set up. As per agreement, assessee incurred an expenditure of Rs. 44,03,606/- on refurbishing, repairs and renovation of these premises and filed the return of income claiming the same as revenue expenditure. The Assessing officer treated this amount as capital expenditure, which was challenged by assessee. The ITAT vide order dated 23-10-2009 upheld the action of assessing officer. Qua this addition, the asses....
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....ary, the word "concealment" means to conceal, a withholding of something, which one knows and which one in duty is bound to reveal. Thus, where a "fact" of certain "details" is/ are in the special knowledge of a particular person and he/ it hides or withholds such fact/ detail from the knowledge of other despite being under the obligation to disclose the same, it can be said that the same have been concealed. Keeping in view the facts and circumstances of the case, it is held that the assessee has deliberately willfully and knowingly furnished inaccurate particulars of its income and provisions contained in section 271(1)(c) along with explanations appended to this section read with section 274 of the I.T. Act 1961 has been violated, theref....
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....6/- occurred due to difference of opinion between the appellant and the AO. Since there is very thin line between the revenue and capital expenditure, the difference in opinion is very much possible. 4.1. I further find that the Ld. AR has placed reliance on the decision of jurisdictional High Court in the case of CIT Vs. HMA Udyog (P) Ltd. (2007) 211 CTR (Del) 543. For the sake of convenience, the relevant portion of finding of Hon'ble High Court is reproduced below: "The assessee was earlier in the business of advertisement activities of various cigarette products and also concealed with garmentmanufacturing and sale. During the previous year relevant to the assessment year in question, the assessee started a business of restaurants and....
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....as, as rightly held by the Tribunal, a debatable issue and would not amount to furnishing of inaccurate particulars so as to attract penalty proceedings. Under the circumstances, we are of the view that no substantial question of law arises for our consideration. Dismissed." 4.2. On going through the findings of Hon'ble Delhi High Court, I find that the facts of t he appellant's case are similar to the case of CIT vs. HMA Udyog (P) Ltd. (supra). In that case also the expenditure was claimed by the assessee as revenue expenditure on account of extensive repairs. However, the AO held the said expenditure as capital expenditure and in appeal the CIT(A) and ITAT upheld the findings of the AO. Later on, the penalty u/s 271(1)(c) was levied aga....
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....separate than quantum proceedings (ii) The assessee is into hospitality business, which includes taking over of hotels, bars, restaurants for management purpose, therefore, when this bar & restaurant was taken on management, the assessee's business starts from that date. Consequently, the day assessee entered into agreement with AHPL, the assessee's business of management started. There is no justification in the assessing officer's holding that the expenditure was capital in nature and assessee's business started only after the refurbishing was complete. The bar & restaurant was already operational, for better commercial exploitation the management contract was given and assessee was obliged to share of the refurbishing expenditure. When ....
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....urnishing of inaccurate particulars or concealment of income. The analogy of this judgment is clearly applicable inasmuch as all the details about the claim were properly disclosed in the return of the assessee. Assessing officer has chosen to treat the expenditure from revenue head to capital head only on his interpretation about the facts. Such debatable interpretation cannot be held to be a reason for imposition of penalty u/s 271(1)(c). Further reliance is placed on the ratio of decisions in the cases of:- CIT v. Manibhai & Bros. (2007) 294 ITR 501 (Guj) CIT v. Auric Investment & Securities Ltd. (2007) 163 Taxman 533 (Del) CIT v. Bhudewal Cooperative Sugar Mills Ltd. (2008) 171 Taxman 173 (P&H) CIT v. Mica Wood (P) Ltd. (2008) 170 T....