Shriram Properties & Construction, ... vs Department Of Income Tax on 12 March, 2012
10. We considered the matter in detail. The details of the three
items considered by the assessing authority in his penalty
proposition were properly disclosed in the statement of accounts
filed by the assessee. The question of addition made in respect of
writing off of sundry balances has already become an academic
issue in the light of the order passed in the quantum appeal filed by
the assessee. The two issues considered by the Assessing Officer
to levy penalty are ` 3 crores as contribution to trust fund and
` 3 crores as provision for diminution in value of investments.
Regarding the contribution to trust fund, the assessee was of the
view that it could be a payment deductible in computing the taxable
income, as the contribution was made by the assessee in the
interests of business carried on by it. The assessee has explained
that, de facto speaking, the contribution was made in the light of
commercial expediency and the assessee claimed it as a deduction
:- 8 -: ITA 1296/11
in the light of the decision of the Hon'ble Supreme Court in the case
of SA Builders vs. CIT (288 ITR 1). Regarding the provision for
diminution in value of investments also the assessee has furnished
all the details including its business with Millennium Business
Solutions Ltd. Therefore, there is no case of non-furnishing of
particulars or furnishing of inaccurate particulars. Although the
claims of deductions made by the assessee may not be admissible,
but that does not make the particulars furnished by the assessee
as "inaccurate particulars". So as to qualify the particulars as
"inaccurate", the particulars furnished by the assessee must be
some way distant from the actual position. Here, the position has
been correctly explained by the assessee. The dispute was only
on the question, whether the deductions could be allowed or not.