Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty under Section 271(1)(c). If we accept the contention of the Revenue then in case of every return where the claim made is not accepted by the assessing officer for any reason, the assessee will invite penalty under Section 271(1)( c ) .
The assessee’s quantum appeal has been admitted by the High Court. If the assessee succeeds in the quantum proceedings, it would not even be necessary to consider the s. 271(1)(c) penalty proceedings and so no prejudice has been caused to the department qua the penalty proceedings.
When Clause 11 of the instruction No.3/11 dated 09.02.2011 issued by the Board, specifically says that it will be applicable to the cases filed on or after 9.2.2011, the courts holding that it is applicable to the pending cases is against the provision under Section 268A of the Act, Public Interest and the Public Policy.
a. The search commenced on 29.8.1996 and was finally concluded on 30.8.1996. It is impossible for anybody to accurately take stock in a span of just one day and this itself vitiated the entire process of inventorisation followed by the income tax authorities.
The proviso to s. 36(1)(iii) enacts that any amount of the interest paid towards capital borrowed for acquisition of an asset or for extension of existing business regardless of its capitalization in the books or otherwise,
A look at the assessment order, in respect whereof power under section 263 of the Act was exercised, would amply make it clear that the Assessing Authority did not at all make any endeavour to ascertain, whether Rs. 96 and odd crores were received by the assessee for and in respect of services rendered by the assessee or the same was received only by way of sale price of goods/materials sold by the assessee, may be outside India.
In Tax Appeal No. 9 of 2001, in addition to the above two questions with respect to the lease agreement, one more question is raised and that is relating to the allowing of the claim of expenditure on get together, picnic, coffee and tea of the employees and payment Club and expenses incurred for seminar as revenue as revenue expenses for the assessment year 1993-94 amount to Rs. 5,76,330/-which is, according to revenue, was not allowable as expenditure.
In the instant case, ‘R’ has created these trusts and was depositing the amount in cash to be given to the company as loans. He did not produce the trust deeds, the author of the trusts or beneficiaries of the trusts. The method and manner in which the amounts were deposited in the bank accounts of the trusts and was transferring the same on the same day by way of cheques to the company clearly established that he was playing a fraud with the revenue.
The tax audit report filed by the assessee was as per Form No. 3CA which was applicable to the assessees carrying on business or profession. In the audit report, the nature of business was referred to as investment company and the method of valuation of closing stock was stated to be the lower of cost or market value which method is applicable in case of business stock only.
fficers of the Department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the of claiming and securing reliefs and in this regard the officers should take the initiative in guiding a taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit them indicate that some refund or relief is due to him.
