AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 454
X X X X Extracts X X X X
X X X X Extracts X X X X
....ufacture and sale of 'condition monitoring equipment'. It has filed its return of income for the impugned assessment year at Rs. 12,33,192/-. In the scrutiny proceedings completed, Assessing Officer (AO) inter alia disallowed the claim u/s. 80-IA of Rs. 4,04,675/- and also made certain additions pertaining to sale of PCBs of Rs. 30,569/- and also certain closing stock in finished goods Rs. 3,10,802/-. Even though assessee contested the same in the appeal, he withdrew the contentions with reference to additions whereas the Ld.CIT(A) allowed the deduction u/s. 80-IA. In the appeal by Revenue, ITAT vide its order dt. 30-03-2007, reversed the order of the CIT(A) and affirmed action of AO in disallowing the claim u/s. 80-IA. Since proceedings u/....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the DCIT, Circle-3(2) dated 31.12.2007; 3. The Honourable Commissioner of Income Tax (Appeals)-IV erred in passing an order confirming the levy of penalty on the value of closing stock of finished goods said to be undisclosed without considering that the value of work in progress included a value for the same; 4. The Honourable Commissioner of Income Tax (Appeals)-IV erred in passing an order confirming the levy of penalty u/s. 271(1)(c) on the disallowance of deduction u/s. 80(IA) even though it was allowed in appeal by the CIT(A)-V and disregarding the aspect of disallowance being made only on the basis of interpretation of the facts on record pertaining to newly established industrial undertaking in respect of which sum claim was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gs of the ITAT that assessee has purchased second hand machinery and therefore could not have claimed 80-IA. He supported the orders of AO and CIT(A). 7. We have considered the rival contentions and perused the documents on record. As far as two additions are concerned, it is the fact that sales recorded in the next year have been brought to tax during the year based on the entries in the RG1 Register. It is also fact that AO has reduced the same value in AY. 1995-96. 7.1. With reference to three Shock Pulse Analysers, the AO on verification of RG1 Register noticed that they are available in the closing stock, whereas assessee contends that the stock was part of work-in-progress in the books of account. It is interesting to note that Ld.C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of the penalty proceedings, the appellant submitted that they had declared stock as 'part of work-in-progress' in their books, that these products, though manufactured, were awaiting assembling and packing before dispatch and that the disclosure in RG1 register was only made to avoid adverse comments from Excise Depot. 4.3. The Assessing Officer observed that the items under work-inprogress were those items which had not been fully processed or completed and that only finished goods had to be entered in RG1 Register and the appellant had shown these items as 'finished goods' in the RG1 register. The Assessing Officer, therefore, levied penalty on the appellant on this issue'. 7.2. As can be seen from the above, we are unable to under....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 80-IA. This being the third year of the claim, AO analysed that assessee purchased second hand machinery and disallowed the claim. It is to be noted that claim u/s 80-IA was allowed by the Ld.CIT(A) after due examination by him. On further appeal by Revenue, ITAT however, has not allowed the claim. This shows that it is mere rejection of a claim. Mere disallowance of a claim does not come within the purview of 'concealment of income'. It can also do not form under the category of 'furnishing of inaccurate particulars'. Hon'ble Supreme Court in the case of CIT Vs. Reliance Petro Products [322 ITR 158] has held as under: "We have already seen the meaning of the word "particulars" in the earlier part of this judgment. Reading the words....