TaxTMI 
TaxTMI 
2016 (5) TMI 617
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.... The brief facts of the case are that the return of income was filed on 30.10.2003 by the assessee thereby declaring total loss of Rs. 1,01,43,720/-. The assessment was completed u/s 143(3) of the I.T. Act,1961 on 13/02/2006 determining total income of Rs. 3,56,274/- by making additions of Rs. 1,05,00,000/- During the course of assessment proceedings, the AO observed that the assessee had entered into an agreement with M/s. Harmone Show biz Ltd. on 26/04/2002. As per the terms and conditions of the agreement "the theatrical distribution exhibition and exploitation rights of the film "Danger" for the territories prescribed in the agreement belonged to both the assessee and M/s. Harmone Showbiz Pvt. Ltd., as joint owners. The profit/loss share ratio of both the parties was 60% and 40%. Since it was found that the business was not likely to be profitable the assessee decided to exit from the agreement. As against the settled payment of Rs. 1.50 crores, the appellant paid a total sum of Rs. 1.05 crores and claimed the said amount as business los. The Assessing Officer disallowed this amount as the payment was towards acquisition of capital assets and the cancellation of the same cannot....
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....m of assessee for taxable of income is not itself sufficient to warrant penalty upon the assessee. Since the assessee has disclosed full particulars therefore the question of concealment or furnishing inaccurate particulars does not arise. Ld. AR further argued that there are no findings that any of the details supplied by the assessee in its return are found to be false. The ld. AR also relied upon the judgement rendered by Hon'ble Supreme Court in case of 'CIT vs. Reliance Petroproducts Private Ltd.' 322 ITR 158 SC and case titled 'Kanbay Software India (P) Ltd. vs. DCIT' decided by ITAT Pune Bench. 6. We have heard the counsels for both the parties and we have also perused the material placed on record as well as the orders passed by revenue authorities. Before we come on to the merits of the case it is necessary to evaluate the impugned order passed by CIT(A) and the operative paras are reproduced herein below: 2.3 I have carefully considered the facts of the case and the contention of the appellant. I find that the Assessing Officer levied the penalty on the ground that the appellant in agreement with M/s. Harmone Showiz Pvt. Ltd. was regarding the theatrical distr....
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.... avoid disclosing or divulging. That means non disclosure of particulars of income. On the other hand, where particulars are disclosed but such disclosure is not correct, true or accurate, it would amount to furnishing of inaccurate particulars of income. For example, in case of businessman, if a particular transaction of sale is not shown in the books, it would amount to concealment of particulars of Income while sale is shown but at a lesser value, it would amount to furnishing of inaccurate particulars of income. 2.3(c) It is pertinent to note that thrust of the legislature is upon the particulars of Income which are either concealed or furnished inaccurately by the assessee. Therefore, one must understand the meaning of the words "particulars of income". Recently, the Income tax tribunal had to consider the meaning of the expression "furnishing of inaccurate particulars of income" appearing in section 271 (1)(c) in the case of Kanbay Software India (P) t.td. 122 IT J 721 (Pune). It was held that the expression 'particular' refers to facts, details, specifics or the Information about someone or something. Thus, the details or information about the income would d....
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....s found to be false by AO, OR (ii) offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all material facts have been disclosed then, the amount added or disallowed shall be deemed to be income in respect of which particulars are concealed. It is pertinent to note that this Explanation is restricted to a case where 'A' is unable to offer an explanation or is unable to substantiate the explanation offered by him in respect of factual detail of the income. Therefore, even this Explanation does not and cannot apply to a case where addition/disallowance has been made by mere rejection of legal claim made by AO. This view has also been taken by Pune Bench of the Tribunal in the case Kanbay Software (supra). Therefore bona fide of legal claim is not the subject matter of the Explanation 1. In my view the ratio of the apex court, in the case of Reliance Petroproducts (supra), to the effect that mere rejection of legal claim would not invite the penalty would also apply where the charge against the 'A' is concealment of particulars of income. In the view of the foregoing, the appeal is allowed. In the resul....