2014 (4) TMI 709

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....se of scrutiny assessment, the AO disallowed payment to retiring directors as well as payment made to M/s CHK Germany for providing technology and technical knowhow. The CIT(A) also confirmed the action of the AO with regard to technology knowhow on the plea that same was capital in nature. The disallowance made for technical know-how payment was also confirmed by the CIT(A). On both these disallowances, penalty was imposed under Section 271(1)(c) which was confirmed by the CIT(A) and assessee is in further appeal before us. 3. It was argued by the learned AR that disallowance made on account of payment to the director was deleted by the Tribunal in its quantum appeal vide order dated 11-7-2012 in ITA No.4278/Mum/2006. With regard to the....

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....th the mens rea. However, we have to only see as to whether in this case, as a matter of fact, the assessee has given inaccurate particulars. In Webster's Dictionary, the word & "inaccurate" has been defined as:- "not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript";. We have already seen the meaning of the word "particulars" in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied in the Return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its Return were found to be incorre....

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....on of income, same was claimed as revenue expenditure under Section 37(1), by relying on various judicial pronouncements including the decision of the Hon'ble Supreme Court in the case of CIT Vs. Wavin (India) Ltd. (1999) 236 ITR 314 (SC), Hindustan Ciba Geigy Ltd. Vs. CIT, 152 CTR (Bom) 15 and Kirloskar Pneumatic Co. Ltd. Vs. CIT, 15 Taxman 455 (Bom). Thus, there was no concealment of facts by the assessee in the return of income. We do not find any justification for the imposition of penalty for disallowing the payment claimed under Section 37(1), since there was full disclosure of expenses so incurred for technical knowhow, genuineness of expenses were not doubted, mere disallowance on the plea of expenses being capital in nature, do not....