TaxTMI 
TaxTMI 
2016 (10) TMI 43
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....he appellant in his return of income had claimed such expenditure which is not allowable as per the Act. 3. The CIT (A) failed to appreciate and ought to have held that: a. Where claim of the Appellant was based on certain judicial pronouncements or where the issue is debatable or where two views are possible or where adequate disclosure have been made no penalty can be levied; b. A mere making of a claim , which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. 4. of the Act, of Rs. 10,05,115/- be deleted or appropriately reduced. GROUND - II The Appellant craves leave to add to , amends and / or alter the above ground of appeal at the time of hearing. 2. The above grounds appeal are relating to penalty u/s. 271(1)(c) of the IT Act, 1961 of Rs. 10,05,115/- on the basis of two additions made by the Assessing Officer as under: Legal and professional charges Rs.17,36,080/- Cost of investment written off Rs.12,50,000/-. 3. The brief facts of the case are that the primary objects of the company are carrying on the business of an investment company and inter alia to purchase, to inve....
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....s not directly linked to the income component of the assessee. In the computation of income, the assessee has shown income from house property and income from other sources. The income of each head has to be computed separately and expenditure of one head cannot be adjusted against the other heads of income as per IT Act. The assessee company has not carried out the business of purchase and sales of shares during the year. So the expenses cannot be adjusted against other heads and, therefore, disallowed the written off of investment of Rs. 12,50,000/-. Aggrieved by the order of the Assessing Officer, he appealed before the ld. CIT(A) who confirmed the order of the Assessing Officer. Against the order of the ld. CIT(A), the assessee did not prefer any appeal before the Tribunal. 4. On the basis of above disallowances, the Assessing Officer initiated penalty proceedings and imposed penalty of Rs. 10,05,115/- u/s. 271(1)(c) of the Act. Against this order the assessee appealed before the ld. CIT(A) who confirmed the action of the Assessing Officer for filing of inaccurate particulars of concealed income of Rs. 17,38,080/- as legal and professional charges and Rs. 12,50,000/- as invest....
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....Since the factum of investment and its write off was also completely disclosed before the AO in the financial statement furnished, it is not justified to assume that the appellant has concealed the particulars of income or has furnished inaccurate particulars of such income entailing penalty u/s. 271(1)(c) of the Act. It was further submitted that merely because claimed expenditure which was not acceptable to the Revenue, that by itself would not attract penalty. Reliance is placed on the following decisions : (i). CIT vs. Reliance Petroproducts (P) Ltd. , 322 ITR 158 (SC) (ii). Larsen and Tourbro Ltd., 366 ITR 502 (Bom.) It was further submitted that non-filing of quantum appeal against the finding of Assessing Officer does not ipso facto lead to levy of penalty as held in the following decisions : (i). Sir Shadi Lal Sugar & Gen. Mills Ltd. vs. CIT, 168 ITR 705 (SC) (ii). Rai Indl. Power Pvt. Ltd. vs. DCIT(ITA No. 4862/Del./13(Del.Trib) (iii). Rajendra Kumar vs. ITO, 94 TTJ 280 (Jodh. Trib.) For the proposition that no penalty can be levied on a claim on investment written off as a revenue loss allowable as a deduction, the ld. AR relied on the following decisions : ....
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.... submissions and have gone through the entire material available on record. As far as the legal aspect raised by the assessee regarding defect in the notice issued u/s. 271(1)(c) of the Act, which vitiates the entire penalty proceedings, is concerned, the contention of the ld. Counsel for assessee is that the Assessing Officer has issued notice u/s. 271(1)(c) read with Section 274 of the Act in a printed format and the said notice nowhere spells out the specific charge against the assessee as to whether the assessee was guilty of having concealed the particulars of income or of having furnished inaccurate particulars of income. A perusal of record shows that this issue has neither been raised before the first appellate authority nor before us in the grounds raised in the memo of appeal. The assessee has also not bothered even to file any additional ground in appeal raising this issue before us. We are, therefore, unable to adjudicate upon this issue only on the basis of arguments advanced before us when it is neither raised before the CIT(A) nor before us in grounds of appeal or by way of any additional ground. For this lapse on the part of assessee, this issue is observed as non-m....