TaxTMI 
TaxTMI 
2011 (1) TMI 1469
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....l facts. The assessee is a partnership firm mainly engaged in the business as an interior decorator. In the revised return of income filed by the assessee, the assessee claimed that it's business income of Rs. 23,17,927 is to be set off against business loss brought forward amounting to Rs. 21,68,663. However, when the assessee was required to furnish details of loss carried forward, it was found that business loss brought forward amounted to only Rs. 8,69,166. When the assessee was required to show reasons of this inaccurate claim, it was submitted by the assessee that the mistake was an inadvertent mistake and it had no malafides. It was in this backdrop that the penalty proceedings under section 271(1)(c), for furnishing inaccurate parti....
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....submits that bonafides cannot be inferred or assumed; there has to be material on record to establish the same. In response to bench's requisition to highlight the precise circumstances in which this mistake has occurred, learned counsel has filed an affidavit dated 15th September 2010 which reads as follows : "I Behram Maneck Pardiwala residing at 669, Katrak Road, Wadala, MumbaiITA 400 031 hereby solemnly swear and affirm as under: 1. That I am a practicing Chartered Accountant having membership number 36633. 2. That I inter alia handle the finalization of accounts and income tax return filing work of "Tangram Designs" a partnership firm having its office at 3, Devi Sadan, 209-B, Dr. Ambedkar Road, Matunga (C.R)....
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.... revised return of income filed worked out to `.16,88,853 - a copy each of the revised computation of income and the acknowledgement for the revised return marked 'Appendix- D' is attached herewith. 6. That this error took place because while carrying forward the business loss of the assessment year 2000-2001 to the subsequent assessment years, the amount of `.21,68,663 being the loss as per the original return of income filed for that year was erroneously considered. 7. That further I had also failed to consider that a sum of `.8,19,687 out of the aforesaid sum of `.21,68,663 had already been set off against the income for the assessment year 2003-04. 8. That these errors remained undetected both by me as well as....
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....ecting the explanation that he can proceed to impose the penalty. When examining the explanation of the assessee, we are not to ponder over as to what ought to have been done in the ideal circumstances, but all that we have to see is whether explanation of the assessee is a reasonably valid explanation, does not suffer from any inconsistencies and meets the tests of preponderance of probabilities. It is in this light that we have perused the affidavit filed by the assessee and the accompanying documents. It is not in dispute that the original income tax return filed by the assessee for the assessment year 2000-01 disclosed the returned loss of Rs. 21,68,663, while the finally revised loss worked out to Rs. 16,88,853. This fact, coupled with....