2015 (7) TMI 433

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....in the assessment order dated 31.12.2009 made under section 147 r.w.s143(3) of the Act. 3. Prior to this, the original return was filed on 21.10.2005 declaring total income at Rs. 2,71,17,770/- which was processed under section 143(1) of the Act. The said return was re-opened and proceedings under section 147 of the Act were initiated against the assessee. The assessment was reopened because the AO found that the assessee has claimed deduction on account of obsolete store/spares written off/consumed amounting to Rs. 12,75,872/- which according to AO was capital in nature and the second reason for reopening of the assessment was that the AO found that the assessee claimed deduction on account of loss on assets sold/discounted amounting to R....

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....undisputed fact that even in the return filed in response to the notice u/s 148 of the Act, the said deduction was claimed only when the AO pointed out during the course of re-assessment proceedings, the assessee agreed for the disallowance. In the penalty proceedings throughout, the assessee claimed that due to inadvertent, it failed to add back the said amount in its computation of income. For such inadvertence, no penalty should be levied u/s 271(1)(c) of the Act. Reliance is placed on the decision of the Hon'ble Supreme Court in the case of Price Waterhouse Coopers (P.) Ltd. V/s CIT (2012) 25 taxmann.com 400 (SC) and the decision of Hon'ble Jurisdictional High Court in the case of CIT V/s Somany Evergree Knits Ltd. in ITA No.133....