TaxTMI 
TaxTMI 
2016 (7) TMI 29
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....lled out from the records are that the assessment u/s 143(3) of the Act for Asst. Year 2007-08 was framed on 24.12.2009 at an assessed loss of Rs. 37,87,178/- after making addition of Rs. 28,76,411 and penalty proceedings u/s 271(1)(c) of the Act were initiated; against which assessee went in appeal before ld. CIT(A) and got part relief vide ld. CIT(A)'s order dated 17.01.2011. 3. Pursuant to the order of ld. CIT(A), ld. Assessing Officer initiated penalty proceedings for imposition of penalty u/s 271(1)(c) of the Act on the addition confirmed by ld. CIT(A) relating to claiming of expenditure of Rs. 959886/- spent on laying of cables for 950 KVA transformer as revenue expenditure which was denied by ld. Assessing Officer by treating the same as capital in nature. Ld. Assessing Officer was not convinced with the reply of assessee and imposed penalty u/s 271(1)(c) of the Act. Penalty was confirmed on another issue also relating to payment of Rs. 93552/- on account of legal and professional charges for non-furnishing of copies of bill(s). 4. On appeal before ld. CIT(A) against the order u/s 271(1)(c) of the Act penalty was confirmed on the disallowance of expenditure of Rs. 959886/-....
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.... cause for not capitalizing the expenditure. The deposit with the electricity board was made in the month of August 2005, the power was connected by the electricity board in the month of October 2005 and the commercial production started in May 2006. The adjustment of the amount of Rs. 9,58,382/- has been made before commencement of production and there is no doubt about it. The claim of the appellant that the journal entry was passed after 6 months of start of production and it resulted in the wrong claim is without any merit as there was no bonafide reason to pass such journal entry so late. No reason have been given by the appellant for the delay. Therefore, the claim of bonafide or the reasonable cause has no merit. The appellant has further relied on certain judgements such as Gujarat Textile Co. P. Ltd. (99 ITR 514) wherein penalty was held to be not imposable on account of expenditure held to be capital nature as against revenue claimed by the assessee. This judgement and the other judgement claimed by the appellant is not applicable to the current facts as there is no dispute about the nature of expenditure in the present case. The expenditure clearly pertains to preoperat....
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.... inaccurate particulars or evidence showing concealment of income at any stage and, therefore, ld. CIT(A) was not correct in confirming the penalty u/s 271(1)(c) of the Act. 7. In support of his submissions, Ld. AR placed reliance on the judgment of Hon. Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd. 322 ITR 158 (SC) and the decision of the coordinate bench in the case of Areez Pirozsha Khambatta vs. ACIT in ITA No.1574/Ahd/2012 for Asst. Year 2006-07 dated 18.07.2014 . 8. On the other hand, ld. DR along with supporting the orders of lower authorities also placed reliance on the decision of Hon. Delhi High Court in the case of CIT vs. Zoom Communication Pvt. Ltd. in ITA No.07/2010 dated 24.05.2010. 9. We have heard the rival contentions and perused the material on record. Through this appeal, assessee is aggrieved with the action of ld. CIT(A) upholding the penalty on the disallowance of Rs. 9,59,886/- being spent on cables on the ground of furnishing inaccurate particulars of income. We observe that assessee company set up a new unit at Vapi -Silvasa Road to manufacture buffered dry powder (injectables) requiring larger quantity of electricity energy whic....
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....f the fact that the assessee is a company which must be having professional assistance in computation of its income, and its accounts are compulsorily1 subjected to audit. In the absence of any details from the assessee, we fail to appreciate how such deductions could have been left out while computing the income of the assessee company and how it could also have escaped the attention of the auditors of the company. 22. The explanation offered by the assessee company was not accepted either by the Assessing Officer or by the Commissioner of Income Tax(Appeals). The view of Income Tax Appellate Tribunal regarding admissibility of the deduction on account of written off of certain assets, under Section of the Act is wholly erroneous. The Tribunal has not recorded a finding that the explanation furnished by the assessee in respect of the deduction due to certain assets being written off was a bonafide explanation. The Tribunal has nowhere held that it was due to oversight that the amount of this deduction could not be added while computing the income of the assessee company. 23. As regards deduction on account of income tax paid by the assessee, the Tribunal felt that since no perso....