TaxTMI 
TaxTMI 
2014 (11) TMI 280
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....eport along with manufacturing and trading account. The assessing officer observed that accounts in respect of paddy were "Paddy Basmati Account" and "Paddy S/Fine Account" and in respect of rice was "Rice Account", reflecting the export and local sales to Basmati and S/Fine. He noted that the closing stock shown in the manufacturing & trading account was under the head "Rice Basmati", "Rice Dubar", "Rice Nakoo" and "Rice S/fine". The assessing officer examined the value of closing stock and noted that the assessee had valued the closing stock of 13598.88 qtl. of "Paddy Basmati" @ Rs. 1841/- per qtl. The assessee submitted that the valuation was done at the market price and filed copies of Form I in respect of purchases made from various parties mentioned in the assessment order to substantiate that the rate adopted by it was proper. The assessing officer, however, noticed from the purchase account and purchase vouchers that the assessee purchased paddy basmati from Panna Lal Rakesh Kumar on 30-3-2007 vide bill no. 14 @ 2138/- per qtl. and, therefore, required the assessee to explain as to why this rate be not adopted for valuation of closing stock. The assessee pointed out that it....
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.... whereas the particulars of transformer purchased from M/s Nand Kishore & Co. was for transformer of 1000 KVA. (iii) The assessee filed copy of ST Form 38 claiming that the S. No. 3748962 of Form 38, was mentioned on the purchase bill no. 964 dated 23-9-2006 and also vice versa, the date of receipt of goods written on form no. 38 was initially 23-10-2006 and it was clearly evident that the date had subsequently changed to 23-9-2006. (iv) The details were submitted to the Sales-tax department vide entry dated 26-10-2006. (v) The assessee did not file any proof to prove that the transformer was actually installed or put to use on or before 30-9-2006. 2.5. Accordingly, assessing officer disallowed 50% of the depreciation claimed by the assessee and made a disallowance of Rs. 60,000/-. 2.6. While partly allowing the assessee's appeal, the Ld. CIT(A) confirmed both the disallowances. 2.7. The assessee did not file any further appeal before the Tribunal. The assessing officer initiated penalty proceedings and levied penalty u/s 271(1)(c), apropos both the additions discussed above. Ld. CIT(A) confirmed the penalty. Being aggrieved with the order of ld. CIT(A), the assessee is i....
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....inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The Learned Counsel argued that "submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income". We do not think that such can be the interpretation of the concerned words. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. In Commissioner of Income Tax, Delhi Vs. Atul Mohan Bindal [2009(9) SCC 589], where this Court was considering the same provision, the Court observed that the Assessing Officer has to be satisfied that a person has concealed the particulars of his income or furnished inaccurate particulars of such income. This Court referred to another decision of this Court in Union of India Vs. Dharamendra Textile Processors [2008(13) SCC 369], as also, the decision....
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....rom page 26 of the PB. However, the explanation of assessee did not find favour with the assessing officer who made the addition on account of non-maintenance of complete stock in regard to Pusa basmati and pure basmati separately. Addition was also confirmed by CIT(A). However, when we have to decide the issue of levy of penalty, we have to find whether the assessee's explanation was bona fide or mala fide. The assessing officer has adopted the rate from the last bill, contained at page 25 of the PB. The assessee's contention is that it is in respect of only one variety of pure basmati and, therefore, could not be taken as the basis for valuing the entire stock, which admittedly included the Pusa basmati. Under such circumstances, keeping in view the fact that purchase bills clearly showed that the assessee was making purchases of Pusa basmati as well as pure basmati, the estimation made by assessee of market rate for valuation of stock, could not be faulted and, therefore, invocation of penal provisions was not justified as the assessee's explanation could not be branded with any mala fide. Relying on the decision of Hon'ble Supreme Court in the case of Reliance P....