2014 (7) TMI 134

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....y and rent paid. 3. Rival contentions have been heard and record perused. Facts in brief are that during the course of scrutiny assessment, AO found that the Assessee had debited royalty to Court Receiver of Rs. 42.00 lacs. In this connection it was submitted that the royalty was paid to Court Receiver as per order of Hon'ble Court because there was some dispute between the ex-partners of the Hi-tech Blood Transfusion and Allied Services. On the plea that Assessee has not deducted tax at source u/s. 194J on the payment of royalty by invoking provisions of section 40(a)(ia), AO disallowed payment for non deduction of TDS. Similarly, AO disallowed rent payment of Rs. 3.00 lacs on the plea that eventhough Assessee had deducted tax at source....

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.... for the disallowance made by invoking the provisions of section 40(a)(ia). 6. We have considered the rival contentions, carefully gone through the orders of authorities below and found from record that the Assessee has paid a sum of Rs. 42.00 lacs to Court Receiver as per direction of the High Court for calling bids from the partners for the purpose of fixing royalty and the higher bidder would be appointed agent of Receiver who shall carry on the business of Blood Bank which was being carried on by erstwhile partnership firm. The licence to operate the Blood Bank was obtained by the Assessee in his individual capacity as agent of the Court Receiver and there was no user of such licence of the erstwhile partnership firm by him (Assessee....

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....ble Supreme Court in this case after considering the proposition of law laid down in the case of Dilip N. Shroff 291 ITR 519 (SC) and Dharamendra Textile Processors 306 ITR 277 (SC), held as under:- "A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of assessee. Such claim made in the Return cannot amount to the inaccurate particulars. Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty under Section 271(1)(c). If we accept the contention of the Revenue then in case of every Return where the claim made is not....