TaxTMI 
TaxTMI 
2017 (1) TMI 994
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....(1)(c) of the Act, amounting to Rs. 2.5 lakhs.During the assessment proceedings,the AO found that the assessee had acquired machinery worth Rs. 5.85 crores for business expansion.He directed the assessee to produce the copies of the invoices/purchase bills, details regarding sources of funds for acquisition of machinery,evidences showing the date on which the machinery was first put to use,details of bank charges,interest claimed as revenue expenditure along with the declaration as to know portion of the bank charges/interest claimed was liable to be treated as capital expenditure. In response to the said query the assessee, vide his letter dated 05/08/2011 stated that out of the total interest at Rs. 11.23 lakhs claimed as revenue expendit....
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....ish details of bank charges claimed and interest payment certificate along with an explanation as to what proportion of the bank interest and/or bank charges needed to be treated as capital expenditure, that it was only after the issue was raised the assessee accepted the mistake and offered Rs. 10.56 lakhs for taxation, that the admission was not voluntary on part of the assessee, that the assessee had failed to disclose truly and correctly all the particulars of the income while filing his return. The AO referred to the cases of Dharmendra Textile Processors (13SCC 369) and Reliance Petro Products (189 Taxman 322)and held that the assessee had concealed the particulars of income which had been uneathered during the assessment proceedings.....
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....capital expenditure.With regard to case of Nalin P Shah, the FAA observed that assessee had,in its return of income,had filed a note disclosing all the relevant details regarding the loss claimed and carried forward,that the Hon'ble High Court had held that the issue was facts based,that the assessee had made no such disclosure in the return of income, that it was only after the relevant facts were called for and examined,that he admitted the true state of the affairs, that the assessee did not prefer any appeal against the additions made by the AO, that the facts of the case of Reliance Petro Products were distinguishable,that no legal claim had been accepted for which the assessee had disclosed all the facts,that it was not a case of mear....
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....e had made claim for depreciation on account of purchase of machinery,that the AO had directed it to produce various details with regard to the purchase,including the copies of the invoices/ purchase bills, sources of funds,bank charges etc.,that the scrutiny revealed that certain expenses were capital in nature.He called for further explanation from the assessee in that regard. It was only after the inquiry made by the AO,that the assessee admitted that the claim made by it were not as per the provisions of the Act,that he admitted to pay tax on disputed items.It is not a case that the assessee on its own made the offer and had accepted that by mistake it had not paid taxes on the disputed items.Had the case not been selected for scrutiny ....
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....essment under section 143(1) of the Act and even if their case is selected for scrutiny, they can get away merely by paying the tax, which in any case, was payable by them. The consequence would be that the persons who make claims of this nature, actuated by a mala fide intention to evade tax otherwise payable by them would get away without paying the tax legally payable by them,if their cases are not picked up for scrutiny. This would take away the deterrent effect, which these penalty provisions in the Act have. .....We cannot accept the general proposition that no person would ever claim the amount of Income-tax as a deduction with a view to avoid payment of tax. No hard and fast rule in this regard can be laid down and every case will....
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....ed principle of tax-jurisprudence that penalty is levied to compensate the revenue loss suffered by the Department and it is not penal in nature. Unlike the case of Nalin P Shah,the assessee had not filed a note along with the return disclosing all the relevant and necessary details of the transactions. 5.1. We find that in case of Firdaus E. Khatri the issue was about depreciation claimed on motor car against interest income received from firms on his capital balance chargeable as business income u/s. 28 of the Act and the use of the car for personal purposes. In our opinion the case relied upon by the AR is of no held to decide the issue before us. 5.2. We are of the opinion that allowabiltiy of claim of depreciation in subsequent years....