TaxTMI 
TaxTMI 
2016 (10) TMI 886
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....of demurrage and detention charges in the return of income. The Assessing Officer disallowed the said detention and demurrage charges to the extent of Rs. 16,82,238/- being the provision for expenses for demurrage and detention charges which was payable to Jawaharlal Nehru Port Trust (JNPT) and was outstanding at the year end. The Assessing Officer during the course of assessment proceedings required the details from the assessee qua the said claim and after issuing show cause notice added Rs. 16,82,238/- to the income of the assessee for the reasons that the liability has not crystallized during the year and was merely in the nature of provisions which are not allowable under the Act. Penalty proceedings were also initiated u/s.271(1)(c) read with Explanation 1 of the Income Tax Act for furnishing inaccurate particulars of income. The Assessing Officer after considering reply of the assessee dated 26.12.2012 came to conclusion that the assessee has furnished inaccurate particulars of income and also concealed the particulars of income and therefore, was liable for a penalty u/s.271(1)(c) of the Income Tax Act read with Explanation-I and accordingly imposed a penalty of Rs. 5,19,81....
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....he appellant did not appeal further against the order of CIT(A), proves that the impugned claim of expenditure by the appellant was not bonafide. I further find that the appellant has relied upon various case laws, including the decision of Hon'ble Supreme Court in the case of Reliance Petroproducts P. Ltd. (supra). On going through the ratio of said decisions, I am of the opinion that the penalty u/s.271(1)(c) is not leviable only in such cases where an assessee makes a claim in the return of income, knowing it to be a bonafide claim; however, the assessee cannot take shelter of such case laws to make non-genuine claims of expenditure solely for the purpose of deflating his taxable profits. In the case of Sanghvi Swiss Refills (P.) Ltd. vs. ACIT [2012] 28 taxmann.com 208 (Bom.) relied upon by the AO, the Hon'ble High Court of Bombay, after considering the decision of Hon'ble Supreme Court in the case of Reliance Petroproducts P. Ltd. (supra) held that "Making of a claim on admitted disclosed facts is different from filing false/inaccurate particulars". I find that the appellant had nowhere stated in the return of income that the impugned expenditure claimed of Rs. 16....
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....ayable to Jawaharlal Nehru Port Trust in respect of slabs of marble imported by the assessee and accordingly calculated the said charges by applying the rate charged by the said port authority and provided the same in the books of accounts of the assessee pursuant to mercantile system of accounting. Learned counsel further submitted that assessee-firm had imported marble slabs from Sri Lanka vide bill of entry dated 20th July, 2006, the clearance of which was claimed under public notice no.25(RE-98) dated 1st August, 1998 issued by the Central Government u/s 5 of Foreign Trade [Development of Regulation) Act, 1992. In terms of the said notice, the import of marble slabs from SAARC countries was freely importable. However, ACIT vide order no.22nd November, 2006 rejected the contention of the assessee and confiscated the goods u/s. 111(d) of the Customs Act on the ground that Public Notice No.25(RE-98) dated 1st August, 1998 was not applicable but DGFT notification bearing no. 23/2005 dated 31st August, 2005 read with notification no.26/2005 dated 2nd September, 2005 were applicable. The assessee firm preferred an appeal before Commissioner of Custom (Appeals) who vide order da....
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.... for taxation which was accepted by the Income Tax Authorities in A.Y. 2011-12. 5.2 Learned AR vehemently submitted and argued that since the assessee has fully disclosed the particulars of claim of expenses for detention and demurrage charges in the return filed before the AO which had a reasoned and scientific basis and therefore the penalty has been wrongly levied u/s.271(1)(c) and also confirmed by the CIT(A) which was against the provision of law. In defence of his argument learned AR relied upon the judgement of Hon'ble Apex Court in the case of CIT vs. Reliance Petro Product, 328 ITR 158 (SC) and also relied upon the order of Hon'ble Tribunal, Delhi Bench in the case of ITO vs. SRF Intercontinental Finance Pvt. Ltd., 152 Taxman 55 (Delhi). Finally, the learned AR submited that the assessee had made bona fide claim which was duly disclosed in the return of income filed and therefore the penalty as imposed u/s.271(1)(c) be deleted. 6. Per contra, the learned DR relied heavily upon the orders of the authorities and supported the same with the prayers that the appeal of the assessee be dismissed. 7. We have heard the rival submissions and perused the material available ....