TaxTMI 
TaxTMI 
2018 (4) TMI 1123
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.... India, Trimurthi Holding Corporation, Tortola and Marubeni Corporation, Tokyo. The company is formed for establishing manufacturing facility (project) for production, marketing and selling of Styrene Butadiene Rubber (SBR). During the year under consideration, it has undertaken the said project in Panipat, Haryana. The books of accounts were produced which have been test checked. 3. During the scrutiny of the return of income for the Asstt. Year 2011-12, learned AO found that the incorporation expenses of the company amounting to Rs. 99,61,050/- were debited to the Profit and Loss account u/s 37 of the Incometax Act, 1961 ("the Act") instead of claiming to same u/s 35A of the Act. Holding it to be inadmissible expense, learned AO disallow....
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....see under the provisions of the Companies Act, the assessee has to prepare the accounts as per Accounting Standards, and under Accounting Standards 26 such expenses were debited to the Profit and Loss account. It is submitted that though the expense is not allowed u/s 37 of the Act, there cannot be any doubt that the deduction is allowable otherwise u/s 35 of the Act but laboring under a mistaken impression, the assessee claimed the same u/s 37 without amortizing the expenses. Third submission of the assessee is that no ingredient of Section 271(1)(c) are there in this matter inasmuch as all the relevant information is furnished in the financials of the company more particularly in the financials of the company more particularly in the prof....
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....al. 7. We have gone through the record. At the outset, it must be said that the revenue does not dispute the assessee incurring the expenditure. For that matter, learned CIT(A) vide para 6 observed that instead of claiming deduction u/s 35A, the assessee made a wrong claim u/s 37 of the Act. It is a matter of difference of opinion as to whether Section 37 is attracted to the expenditure or Section 35A of the Act. 8. The profit & loss account for the period 6.7.2010 to 31.3.2011 copy of which is furnished by the assessee at page no.4 of the paper book clearly shows that the assessee revealed this incorporation expenses of Rs. 99,61,050/- and note No.6 of the Notes on accounts reveal that the expenses incurred on incorporation of the compan....
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.... assessee including the judgment relied upon by him in the case of CIT vs Manjunatha Cotton & Ginning Factory, 359 ITR 565 (Kar). Vide paragraph 60, the Hon'ble Karnataka High Court has held as follows :- "60. Clause (c) deals with two specific offences, that is to say, concealing particulars of income or furnishing inaccurate particulars of income. No doubt, the facts of some cases may attract both the offences and in some cases there may be overlapping of the two offences but in such cases the initiation of the penalty proceedings also must be for both the offences. But drawing up penalty proceedings for one offence and finding the assessee guilty of another offence or finding him guilty for either the one or the other cannot be sustain....
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....s SSA's Emerald Meadows (ITA No.380/2015 (kar) the Hon'ble Karnataka High Court Considered the question of law as to,- "Whether, omission if assessing officer to explicitly mention that penalty proceedings are being initiated for furnishing of inaccurate particulars or that for concealment of income makes the penalty order liable for cancellation even when it has been proved beyond reasonable doubt that the assessee had concealed income in the facts and circumstances of the case?" 13. And the Hon'be High Court ruled answered the same in favour of the assessee observing that: "The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with Section 271(1)(c) of the ....