Case Law Details
Case Name : CIT Vs Reliance Petroproducts Pvt. Ltd.
Related Assessment Year :
Courts :
Supreme Court of India
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In the case of CIT Versus Reliance Petroproducts Pvt. Ltd. the issue before the SC was in respect of levy of concealment penalty under the Indian Tax Law (ITL) for dis allowance of interest expense on borrowed funds. The borrowed funds were used for investment in shares which yielded exempt dividend income.
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The real truth about concealment is that an amount not properly disclosed in income or claim of false expenditure only. Also no where in the provisions of section 271(1)(c) of the Act define the word concealment it talks about conceal the particulars of income or furnish inaccurate particulars of income only. Disallowance of expenses can not be concealment to levy penalty. In 80% cases after asessment the department officials misuse their discretionary powers and harass the assessee who pay the taxes properly.
Undoubtedly, there is going shortly to be an amendment to nulliufy the impact and benefit of this judgement, in keeping with the culture of the department.