penalty U/s 271(1)(c)

This query is : Resolved

CA Gunjan Kedia (Querist)
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01 September 2009 Assessee incurred repairs expense of Rs.120000 in 2004-05 & 2005-06 totalling Rs.240000. The assesee by mistake does not debit the expense in P/L for both the years, rather he debits the party's A/c.In 2006-07 he realises his mistake & rectifies the same.
The AO says that u have concealed your income & I will levy 300% penalty.

N.B.: Please also mention relevant case laws in the reply.

Late CA Sampat Jain

Late CA Sampat Jain (Expert)
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02 September 2009 Disallowance of expenses will not per se amount to furnishing inaccurate particulars of income - Merely because certain exÂpenses claimed by the assessee are disallowed by an authority it cannot mean that the particulars furnished by the assessee are wrong. Disallowance of an expense per se cannot mean that the assessee has furnished incorrect particulars of its income. Concealment involves penal action. It has to be proved as a conscious act. It is true that direct evidence may not be availÂable in every case. Yet, it must be proved as a necessary corolÂlary from the facts and circumstances established on the record - CIT v. Ajaib Singh & Co. [2002] 253 ITR 630 (Punj. & Har.).