TaxTMI 
TaxTMI 
2007 (6) TMI 139
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....imposed u/s 271(1)(c), when clearly the assessee had not included the total brokerage received by it in its profit and loss account? 2. The facts leading to the above substantial question of law are as under: The assessee is a Company incorporated on 28.09.1994 as a 100% subsidiary of M/s. Cholamandalam Investments and Finance Co. Ltd. The company is a member of the Madras Stock Exchange and is doing business as a share broker. The relevant assessment year is 1997-98 and the corresponding accounting year ended on 31.03.1997. The assessee filed Return of income on 01.12.1997 admitting taxable income at Rs.3,31,710/-. The Return was processed under Section 143(1)(a) of the Income-tax Act ("Act" in short) and thereafter tak....
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.... Rs.19,97,845 (iv) Interest to Cazenove & Co U.K. disallowed u/s.40 Rs.1,79,269 (v) Short admission of interest Rs. 29,307 3. Aggrieved by the order, the assessee filed an appeal to the Com....
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....e present appeal is filed by the Revenue. 4. Learned Standing Counsel appearing for the Revenue submitted that the assessee had not shown the sub-brokerage in the profit and loss account. The assessee had shown only the net-brokerage in the profit and loss account which is against the method of accounting adopted by the assessee. It is further submitted that the Assessing Officer called the details of current liability in Schedule VII of the Balance Sheet. Only after examination, it was found by the Assessing Officer that there was understatement of brokerage receipts and hence the levying of penalty by the Assessing Officer is in conformity with law. 5. Heard the counsel. The assessee is a member of ....
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....in the balance sheet. This is an acceptable system of accounting. The Assessing Officer has found out only from the details available from the accounts furnished. The Tribunal as well as the first appellate authority were of the view that this is not a case where inaccurate particulars of income have been furnished or there is concealment of income by the assessee. Rather, this is a case where a genuine and bona fide mistake of not showing sub brokerage explicitly in the profit and loss account, has been committed, because the assessee was following the netting of brokerage earned. For the purpose of levying penalty, there should be a direct attempt of concealment of items of income or a portion thereof from the know....