Case Law Details
There is hardly any dispute about the settled law that quantum and penalty proceedings are altogether different and each and every disallowance/addition made in the course of former proceedings does not ipso facto attract the latter penal action as per hon’ble apex decision in CIT vs. Reliance Petroproducts Pvt. Ltd. 322 ITR 158 (SC). Viewed from the said contour of settled law, it is apparent from the facts of the instant case that so far as assessee’s former two claims of bad debts written off and foreign travel expenditure (supra) are concerned, there is hardly any issue that the relevant amounts in question have been found to be otherwise correct. The mere failure on assessee’s part is on account of proving a nexus with its business purposes qua the former issue and in producing the relevant details qua expenses incurred on one Mr. Vineet Menon’s visit (supra).
It is therefore evident that the assessee has not been able to prove its two claims by way of producing necessary supportive details. The same can hardly be termed as an instance of altogether a false claim inviting penal action. We thus quote hon’ble apex court’s above stated decision to hold that assessee’s two deductions claim do not amount to either an instance of concealment or furnishing of inaccurate particulars of income.
This leaves us with the third remaining issue of disallowance of loss (supra). The assessee has debited a sum of Rs.13,33,814/- pertaining to discarded and sold assets. It added back a sum of Rs.5,00,264/- only thereby excluding the remaining amount of Rs.8,33,576/-. It claimed the same as a capital loss. The Assessing Officer was of the view that the said loss arising from sale of discarded assets deserved to be treated as capital in nature. In view of Section 43(6)(c) r.w.s. 50 of the Act. This interpretation held ground right upto the above stated co-ordinate bench decision. The same indicates that there was no issue so far as assessee’s claim on facts was concerned.
It is rather assessee’s case that it had filed all necessary particulars as per its books of accounts leading to rejection of its claim on legal interpretation of the relevant statutory provision. Learned Departmental Representative is unable to dispute this background of facts. We thus conclude that this third disallowance/addition issue does not amount to either of the two limbs of concealment as well as furnishing of inaccurate particulars of income u/s.271(1)(c) of the Act. The assessee’s argument on this third aspect is also accepted. We direct the Assessing Officer to delete the impugned penalty accordingly.
