Param Jewellers Pvt.Ltd., Ahmedabad V. The Income tax Officer,Ward-5(2), Ahmedabad

ITA 2595/AHD/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9387 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 25-11-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 01-09-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Wrong claim; Revenue expenditure; Capital expenditure
• Section: 143(3); 32; 147

Judgement Text

FIT FOR PUBLICATION IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH AHMEDABAD (BEFORE SHRI BBAVNESH SAINI, JUDICIAL MEMBER) ITA NO.2595/AHD/2010 A. Y.: 2003-04 PARAM JEWELLS PVT. LTD., C/O. R. B. RATHI & CO., 35, NEW CLOTH MARKET, AHMEDABAD VS INCOME TAX OFFICER, WARD -5(2), AHMEDABAD PA NO. AABCP 3048 H (APPELLANT) (RESPONDENT) APPELLANT BY SHRI R. B. RATHI, AR RESPONDENT BY SMT. SHAILJA RAI, DR O R D E R PER BHAVNESH SAINI, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF THE CIT(A)- XI, AHMEDABAD DATED 25-06-2010 FOR ASSESSMENT YEAR 2003-04, CHALLENGING THE LEVY OF PENALTY U/S 271 (1) ( C ) OF THE IT ACT. 2. I HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIAL AVAILABLE ON RECORD. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT IN THIS CASE, ASSESSMENT U/S 143(3) READ WITH SECTION 147 OF THE IT ACT WAS COMP LETED ON 20-07-2009 DETERMINING THE TOTAL INCOME AT RS.2,64,690/- AS AG AINST RETURNED INCOME OF RS.91,750/- AFTER MAKING ADDITION ON ACCO UNT OF DISALLOWANCE OF CAPITAL EXPENDITURE. PENALTY PROCEEDINGS WERE AL SO INITIATED. THE ASSESSEE SUBMITTED BEFORE THE AO AT THE ASSESSMENT STAGE THAT THE ASSESSEE HAS RAISED THE SHARE CAPITAL DURING THE YE AR AND HAS PAID STAMP DUTY EXPENSES OF RS.1,73,040/- TO THE REGISTR AR OF COMPANIES, GUJARAT. THE ASSESSEE ALSO STATED THAT IT HAS NO OB JECTION TO THE PROPOSED DISALLOWANCE OF THE SAID EXPENDITURE. THE AO ACCORD INGLY DISALLOWED ITA NO. 2595/AHD/2010 PARAM JEWELLS PVT. LTD. VS ITO W-5(2), AHMEDABAD 2 RS.1,73,040/- AND ON THE SAME MATTER PENALTY PROCEE DINGS WERE INITIATED. THE AO ALSO NOTED THAT THE ASSESSEE HAS NOT FILED ANY APPEAL AGAINST THE ADDITION ON MERIT. THE AO NOTED IN THE PENALTY ORDER THAT THE PARTICULARS FURNISHED BY THE ASSESSEE WAS FACTUALLY INCORRECT AND ALSO WAS NOT BONA FIDE, THEREFORE, PENALTY WAS LEVIABLE. THE AO ALSO NOTED IN THE PENALTY ORDER THAT CONCEALMENT OF INCOME CAN TA KE PLACE IN TWO WAYS, EITHER AN ITEM OF RECEIPT MAY BE SUPPRESSED FRAUDUL ENTLY OR AN ITEM OF EXPENDITURE MAY BE FALSELY CLAIMED. IN BOTH TYPES, ATTEMPTS ARE MADE TO REDUCE TAXABLE INCOME. THE AO ACCORDINGLY NOTED THA T IN THE PRESENT CASE THE ASSESSEE HAS CONCEALED TAXABLE INCOME BY W AY OF WRONG CLAIM OF EXPENDITURE WHICH WAS NOT IN ACCORDANCE WITH THE IT ACT. THE AO ACCORDINGLY IMPOSED PENALTY U/S 271 (1) (C) OF THE IT ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE PENALTY ORDER WAS CHALLENGED BEFORE THE LEARNED CIT(A) AND WRITTEN SUBMISSION WA S FILED WHICH IS INCORPORATED BY THE LEARNED CIT(A) IN THE IMPUGNED ORDER. IT WAS BRIEFLY EXPLAINED BEFORE THE LEARNED CIT(A) THAT THE ASSESS EE DID NOT FILE APPEAL BECAUSE HE DOES NOT WANT ANY LITIGATION ON THE SAID AMOUNT AND THAT THE ASSESSEE HAS DECLARED THE ABOVE EXPENDITURE IN THE PROFIT & LOSS ACCOUNT AND THAT IN THE EARLIER ASSESSMENT ORDER U/S 143(3) OF THE IT ACT DATED 21-02-2006 THE AO DID NOT MAKE ANY ADDITION OF THE AFORESAID AMOUNT. THE LEARNED CIT(A) HOWEVER, CONSIDERING THE FACTS O F THE CASE CONFIRMED THE PENALTY AND DISMISSED THE APPEAL OF THE ASSESSE E. HIS FINDINGS IN PARA 2.2 TO PARA 3 ARE REPRODUCED AS UNDER: 2.2 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE A. R. OF THE APPELLANT AND THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE PENALTY ORDER. BRIEFLY STATED, THE F ACTS ARE AS FOLLOW. APPELLANT DEBITED RS.13,86,500/- TO P & L A /C. UNDER THE HEAD ADMINISTRATIVE & SELLING EXPENSES. AS SE EN FROM SCHEDULE-14, THE SAID EXPENSES INCLUDED STAMP DUTY PAID OF RS.1,73,040/-. IN THE ORDER DATED 20-07-2009 U/S . 143(3) R. W. S. 147, A. O. OBSERVED AS UNDER: - ITA NO. 2595/AHD/2010 PARAM JEWELLS PVT. LTD. VS ITO W-5(2), AHMEDABAD 3 IN RESPONSE TO THE NOTICE ISSUED U/S. 148 OF THE ACT, THE ASSESSEE VIDE LETTER FILED ON 04-09-2008, HAS REQUESTED TO TREAT THE ORIGINAL RETURN FILED ON 29-10-2003 AS FILED IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT. THE REASONS RECORDED FOR RE-OPENING THE CASE WAS SUPPLIED TO THE ASSESSEE VIDE THIS OFFICE LETTE R DATED 01-07-2009. THEREAFTER, A FRESH OPPORTUNITY O F BEING HEARD WAS GRANTED TO THE ASSESSEE VIDE THIS O FFICE NOTICE U/S. 143(2) OF THE ACT DATED 06-07-2009. IN RESPONSE TO THE NOTICES ISSUED, SHRI R. B. RATHI, ADVOCATE DULY AUTHORIZED BY THE ASSESSEE COMPANY, ATTENDED AND THE CASE WAS DISCUSSED WITH HIM. THE ASSESSEE COMPANY HAS ALSO FILED A SUBMISSION DATED 06-07-2009, STATING THAT THE ASSESSEE HAS RAISED TH E SHARE CAPITAL DURING THE YEAR AND HAS PAID STAMP DU TY EXPENSES OF RS.1,73,040/- TO THE REGISTRAR OF COMPANIES, GUJARAT. THE ASSESSEE HAS FURTHER STATED IT HAS NO OBJECTION TO THE PROPOSED DISALLOWANCE OF TH E SAID EXPENDITURE. ALSO ON BEING ASKED, VIDE ORDER S HEET ENTRY DATED 20-07-2009 TO SHOW CAUSE AS TO WHY THE ABOVE EXPENDITURE SHOULD NOT BE DISALLOWED, THE AR OF THE ASSESSEE HAS ALSO AGREED TO TREAT THE ABOVE EXPENDITURE AS CAPITAL EXPENDITURE. THUS THE UNLAWFUL CLAIM OF THE APPELLANT WAS DETECT ED BY THE A. O. AND THE APPELLANT HAD NO EXPLANATION TO OFFER AND AGREED FOR THE DISALLOWANCE. THE SAID DISALLOWANCE WAS NOT APPEALED AGAINST. 2.2.1 THE APEX COURT IN THE CASE OF PUNJAB STATE INDUSTRIAL CORPORATION VS. CIT (225 ITR 792) AND BR OOKE BOND INDIA LTD. VS. CIT (225 ITR 798) HELD THAT EXPENDIT URE INCURRED IN CONNECTION WITH INCREASING SHARE CAPITAL BY A CO MPANY WOULD NOT BE ALLOWABLE AS REVENUE EXPENDITURE. THES E DECISIONS DATE BACK TO THE YEAR 1997. 2.2.2 THEREFORE, IN VIEW OF THE LONG-SETTLED LEGAL POSITION, APPELLANT HAD NO JUSTIFIABLE REASON TO CL AIM THE IMPUGNED EXPENSES. THEY HAD NO EXPLANATION TO OFFER IN THE ASSESSMENT OR APPELLATE PROCEEDINGS. 2.2.3 IN VIEW OF THE ABOVE DISCUSSION, APPELLANTS BLATANTLY INADMISSIBLE CLAIM RESULTED IN FURNISHING PARTICULARS OF INCOME. HENCE, A.OS ACTION IN LEVYING PENALTY I S UPHELD. PENALTY ORDER IS CONFIRMED. ITA NO. 2595/AHD/2010 PARAM JEWELLS PVT. LTD. VS ITO W-5(2), AHMEDABAD 4 3. ACCORDINGLY, APPEAL IS DISMISSED. 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SAME SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT THE ASSESSEE DISCLOSED THE AMOUNT IN QUESTION IN THE PR OFIT & LOSS ACCOUNT UNDER THE HEAD ADMINISTRATIVE AND SELLING EXPENSES AND THAT IN THE EARLIER ORDER U/S 143(3) OF THE IT ACT NO ADDITION HAS BEEN MADE. THEREFORE, IT CANNOT BE BELIEVED THAT THE ASSESSEE HAS MADE A FALSE OR BOGUS CLAIM OF THE EXPENDITURE. HE HAS RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS RELIANC E PETROPRODUCTS PVT. LTD. 322 ITR 158 IN WHICH IT WAS HELD THAT WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RE TURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE, THERE IS NO QUE STION OF INVITING PENALTY U/S 271 (1) ( C ) OF THE IT ACT. 5. ON THE OTHER HAND, THE LEARNED DR RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ISSUE ON M ERIT HAS ALREADY REACHED FINALITY BECAUSE THE STAMP DUTY EXPENSES WE RE MADE FOR RAISING THE SHARE CAPITAL AND PAID TO THE REGISTRAR OF COMP ANIES AND THE ASSESSEE ADMITTED THE ADDITION BEFORE THE AO AND NO APPEAL IS PREFERRED. THE LEARNED DR SUBMITTED THAT THE LAW IS SETTLED TH AT SUCH EXPENDITURE CANNOT BE ALLOWED AS REVENUE EXPENDITURE IN VIEW OF THE DECISIONS OF THE HONBLE SUPREME COURT IN THE CASES OF PUNJAB STATE INDUSTRIAL CORPORATION VS. CIT 225 ITR 792 AND BROOKE BOND IND IA LTD. VS. CIT 225 ITR 798. THE LEARNED DR FURTHER SUBMITTED THAT THE AO HAS NOTED IN THE PENALTY ORDER THAT THE PARTICULARS FURNISHED BY THE ASSESSEE ARE FACTUALLY INCORRECT AND ARE ALSO NOT BONA FIDE AND THAT THE A SSESSEE HAS MADE FRAUDULENT AND FALSE CLAIM IN THE RETURN OF INCOME, THEREFORE, PENALTY WAS RIGHTLY IMPOSED. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MATE RIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS INCREASED ITS SHARE ITA NO. 2595/AHD/2010 PARAM JEWELLS PVT. LTD. VS ITO W-5(2), AHMEDABAD 5 CAPITAL DURING THE YEAR UNDER CONSIDERATION AND INC URRED THE ABOVE EXPENDITURE OF RS.1,73,040/- ON ACCOUNT OF STAMP DU TY. THE PROCEEDINGS U/S 147 OF THE IT ACT WAS INITIATED BY RE-OPENING T HE ASSESSMENT. THE ASSESSEE ACCEPTED BEFORE THE AO AT THE ASSESSMENT S TAGE THAT ABOVE STAMP DUTY EXPENSES WAS PAID TO THE REGISTRAR OF CO MPANIES AND AGREED TO THE PROPOSED ADDITION. THE ADDITION WAS NOT CHAL LENGED IN FURTHER APPEAL. THEREFORE, IT IS UNDISPUTED FACT THAT THE A DDITION REMAINED CONFIRMED. THE AO ACCORDINGLY NOTED IN THE PENALTY ORDER THAT THE ASSESSEE HAS FURNISHED PARTICULARS WHICH WERE FACTU ALLY INCORRECT AND NOT BONA FIDE FOR WHICH PENALTY WAS LEVIABLE. THE A O ALSO NOTED IN THE PENALTY ORDER THAT CONCEALMENT CAN TAKE PLACE BY WA Y OF ANY ITEM OF RECEIPT SUPPRESSED FRAUDULENTLY OR AN ITEM OF EXPEN DITURE WHICH MAY BE FALSELY CLAIMED. THE AO, THEREFORE, NOTED THAT THE ASSESSEE HAS MADE FALSE AND WRONG CLAIM OF EXPENDITURE IN THE RETURN OF INCOME WHICH WAS NOT IN ACCORDANCE WITH INCOME TAX ACT. THE ACTION O F THE ASSESSEE WAS FOUND TO BE FURNISHING INACCURATE PARTICULARS OF IN COME AND, THEREFORE, CONCEALED THE TAXABLE INCOME. IT IS ALSO ADMITTED F ACT THAT THE ASSESSEE HAS MADE A WRONG AND BOGUS CLAIM OF DEDUCTION OF EX PENDITURE IN THE PROFIT & LOSS ACCOUNT ON ACCOUNT OF DEDUCTION ON AC COUNT OF STAMP DUTY PAID. THE CLAIM OF THE ASSESSEE WAS CLEARLY HIT BY THE DECISIONS OF THE HONBLE SUPREME COURT IN THE CASE OF PUNJAB STATE I NDUSTRIAL CORPORATION VS. CIT AND BROOKE BOND INDIA LTD. VS. CIT (SUPRA) AS NOTED ABOVE BY THE LEARNED CIT(A) IN HIS FINDINGS IN WHIC H THE HONBLE SUPREME COURT HELD THAT THE EXPENDITURE INCURRED IN CONNECTION WITH INCREASING SHARE CAPITAL BY A COMPANY WOULD NOT BE ALLOWABLE AS REVENUE EXPENDITURE. THESE DECISIONS WERE RENDERED BY THE HONBLE SUPREME COURT WAY BACK IN THE YEAR 1997. THEREFORE, IT IS SETTLED LEGAL PROPOSITION THAT THE EXPENDITURE INCURRED IN CONNEC TION WITH INCREASING SHARE CAPITAL CANNOT BE ALLOWED AS REVENUE EXPENDIT URE. THE PROFIT & LOSS ACCOUNT AND BALANCE SHEET IS PREPARED BY CHARTERED ACCOUNTANT AND IT IS HIGHLY UNBELIEVABLE THAT TAX PROFESSIONAL WOULD NOT BE AWARE OF THE ABOVE ITA NO. 2595/AHD/2010 PARAM JEWELLS PVT. LTD. VS ITO W-5(2), AHMEDABAD 6 SETTLED LEGAL POSITION BY THE HONBLE SUPREME COURT . THUS, THE ASSESSEE MADE A WRONG AND BOGUS CLAIM OF DEDUCTION OF THE EX PENDITURE ON ACCOUNT OF STAMP DUTY IN THE PROFIT & LOSS ACCOUNT. THE ATTEMPT OF THE ASSESSEE TO CLAIM THE SAME AS REVENUE EXPENDITURE I N THE PROFIT & LOSS ACCOUNT IS, THEREFORE, CLEARLY HIT BY THE PROVISION S OF THE INCOME TAX ACT AND THE JUDGMENTS OF THE HONBLE SUPREME COURT. IT WOULD, THEREFORE, SUPPORT THE FINDINGS OF THE AO THAT THE ASSESSEE HA S FURNISHED THE PARTICULARS OF INCOME WHICH ARE FACTUALLY INCORRECT AND ARE ALSO NOT BONA FIDE. THE ASSESSEE HAS MADE FALSE CLAIM OF THE DEDU CTION OF THE EXPENDITURE ON THIS ACCOUNT AND ALSO MADE WRONG CLA IM WHICH WAS NOT IN ACCORDANCE WITH LAW. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS ZOOM COMMUNICATION PVT. LTD. 327 ITR 510 CONSIDERIN G THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE P ETROPRODUCTS PVT. LTD. (SUPRA) RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE DISTINGUISHED THE SAME IN THE ORDER AND HAS HELD AS UNDER: HELD, THAT ADMITTEDLY, IN VIEW OF THE PROVISIONS CONTAINED IN SECTION 40(A) (II) OF THE ACT, THE AMO UNT OF INCOME-TAX COULD NOT HAVE BEEN CLAIMED AS A DEDUCTI ON WHILE COMPUTING INCOME OF THE ASSESSEE. AS REGARDS THE AMOUNT CLAIMED ON ACCOUNT OF UNUSABLE AND DISCARDED ASSETS, THE TRIBUNAL, WAS ENTIRELY INCORRECT IN TAK ING THE VIEW THAT THE DEDUCTION CLAIMED BY THE ASSESSEE WAS ADMISSIBLE TO IT UNDER SECTION 32(1) (III). CLA USE (I) OF SUB-SECTION (1) OF SECTION 32 RELATES TO ASSETS OF AN UNDERTAKING ENGAGED IN GENERATION AND/OR DISTRIBUTI ON OF POWER. ADMITTEDLY, THE ASSESSEE-COMPANY WAS NOT ENGAGED IN GENERATION AND FOR DISTRIBUTION OF POWER , DURING THE RELEVANT YEAR. THUS, THE PROVISIONS OF C LAUSE (I) OF SUB-SECTION (1) OF SECTION 32 WOULD NOT APPL Y IN RESPECT OF THE ASSETS CLAIMED TO HAVE BECOME UNUSAB LE AND WRITTEN OFF. THEREFORE, THE ASSESSEE HAD NO JUSTIFICATION TO CLAIM THIS AMOUNT OF RS.13,24,539 AS A REVENUE EXPENDITURE. IN FACT, THE ASSESSEE DID NOT CLAIM, EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE COMMISSIONER (APPEALS) THAT SUCH A DEDUCTION WAS PERMISSIBLE UNDER SECTION 32(1) (II). IT WAS ALSO N OT THE CASE OF THE ASSESSEE THAT IT WAS UNDER A BONA FIDE BELIEF ITA NO. 2595/AHD/2010 PARAM JEWELLS PVT. LTD. VS ITO W-5(2), AHMEDABAD 7 THAT THESE TWO AMOUNTS COULD BE CLAIMED AS REVENUE EXPENDITURE. THE ASSESSEE WAS A COMPANY WHICH MUST BE HAVING PROFESSIONAL ASSISTANCE IN COMPUTATION OF ITS INCOME, AND ITS ACCOUNTS WERE COMPULSORILY SUBJECTE D TO AUDIT. THE TRIBUNAL ERRED IN LAW IN DELETING THE PE NALTY IN RESPECT OF THE AMOUNT OF RS. 1 LAKH CLAIMED AS DEDUCTION ON ACCOUNT OF PAYMENT OF INCOME-TAX AND T HE AMOUNT OF RS.13,24,539 DEBITED UNDER THE HEAD EQUIPMENT WRITTEN OFF, IN THE PROFIT AND LOSS ACC OUNT OF THE ASSESSEE. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS ESCORTS FINANCE LTD. 328 ITR 44 HELD AS UNDER: (II) THAT THE ASSESSEE HAD NOWHERE PLEADED THAT TH E RETURN WAS FILED CLAIMING BENEFIT OF SECTION 35D OF THE ACT ON THE BASIS OF THE OPINION OF THE CHARTERED ACCOUNTANTS. MERELY BECAUSE INFORMATION WAS AVAILAB LE IN THE TAX AUDIT REPORT, THAT WOULD NOT ABSOLVE THE ASSESSEE. EVEN IF THERE WAS NO CONCEALMENT OF INCOM E OR FURNISHING OF INACCURATE PARTICULARS, BUT ON THE BA SIS THEREOF THE CLAIM WHICH WAS MADE WAS EX FACIE BOGUS , IT COULD ATTRACT PENALTY PROVISION. IT WAS NOT A CA SE WHERE TWO OPINIONS ABOUT THE APPLICABILITY OF SECTI ON 35D WERE POSSIBLE. THEREFORE, IT COULD NOT BE A CAS E OF BONA FIDE ERROR ON THE PART OF THE ASSESSEE. THE RE LIEF UNDER SECTION 35D OF THE ACT WAS CONFINED ONLY TO A N EXISTING INDUSTRIAL UNDERTAKING FOR EXTENSION OR FO R SETTING UP A NEW INDUSTRIAL UNIT. IT WAS, THUS, NOT A WRONG CLAIM PREFERRED BY THE ASSESSEE, BUT WAS A CLEAR CASE OF FALSE CLAIM. THE MATTER WAS REMITTE D BACK TO THE ASSESSING OFFICER FOR DETERMINING THE PENALTY AFRESH ATTRIBUTING THE CONDUCT RELATING TO CLAIM UNDER SECTION 35D OF THE ACT ONLY AS ATTRACTING PEN ALTY PROCEEDINGS. 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT IN THE ORIGINAL ASSESSMENT ORDER DATED 21-02-2006 NO ADDITION WAS M ADE BY THE AO. THIS IS NO GROUND TO DELETE THE PENALTY, RATHER IT WOULD SUPPORT THE FINDINGS OF THE AO THAT THE ASSESSEE MADE FACTUALLY INCORRECT, WRONG AND BOGUS CLAIM IN THE RETURN OF INCOME. WHEN THE ABOVE FACT WAS DETECTED BY THE AO THAT THE ASSESSEE MADE WRONG CLAIM IN THE ORIGINAL RETURN OF ITA NO. 2595/AHD/2010 PARAM JEWELLS PVT. LTD. VS ITO W-5(2), AHMEDABAD 8 INCOME, PROCEEDINGS U/S 147 OF THE IT ACT WERE INIT IATED BY REOPENING SUCH ASSESSMENT. THE ASSESSEE INSTEAD OF DISCLOSING THE SAME AMOUNT IN THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S 147/ 148 OF THE IT ACT REQUESTED THE AO TO TREAT THE ORIGINAL RETURN AS FI LED IN RESPONSE TO THE NOTICE U/S 148 OF THE IT ACT. EVEN AT THAT TIME, TH E ASSESSEE DID NOT DISCLOSE THE CORRECT FACTS BEFORE THE AO IN RESPONS E TO REASSESSMENT NOTICE. THE ABOVE FACTS WOULD PROVE THAT THE ASSESS EE HAS DELIBERATELY RAISED FALSE AND BOGUS CLAIM OF DEDUCTION OF EXPEND ITURE WHICH WAS CLEARLY CAPITAL IN NATURE. IT IS SETTLED LAW THAT F INDINGS GIVEN IN THE ASSESSMENT ORDER ARE RELEVANT AND HAVE PROBATIVE VA LUE. WHEN THE ASSESSEE PRODUCES NO FRESH EVIDENCE OR PRESENTS ANY ADDITIONAL OR FRESH CIRCUMSTANCES IN THE PENALTY PROCEEDINGS, HE WOULD BE DEEMED TO HAVE FAILED TO DISCHARGE THE ONUS PLACED ON HIM AND LEVY OF PENALTY WOULD BE JUSTIFIED. I RELY UPON THE RECENT DECISION OF THE H ONBLE DELHI HIGH COURT IN THE CASE OF CIT VS HARPRASAD & CO. LTD. 328 ITR 53. 8. CONSIDERING THE ABOVE DISCUSSIONS IT IS CLEAR TH AT MERELY BECAUSE THE ASSESSEE MADE A CLAIM IN PROFIT & LOSS ACCOUNT OF THE DEDUCTION WOULD NOT ABSOLVE THE ASSESSEE FROM LEVY OF PENALTY BECAUSE THE CLAIM OF THE ASSESSEE WAS NOT BONA FIDE AND THAT THE ASSESSE E HAD MADE A FALSE AND WRONG CLAIM OF DEDUCTION OF THE EXPENDITURE IN THE PROFIT & LOSS ACCOUNT AGAINST SETTLED LEGAL PROPOSITION. SINCE TH E ASSESSEE HAS MADE FALSE AND WRONG CLAIM IN THE RETURN OF INCOME OF DE DUCTION OF THE CAPITAL EXPENDITURE, THEREFORE, THE AUTHORITIES BELOW HAVE RIGHTLY LEVIED AND CONFIRMED THE PENALTY IN THE MATTER. ACCORDINGLY, T HE DECISION IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) IS CLEA RLY DISTINGUISHABLE FROM THE FACTS OF THE CASE. CONSIDERING THE ABOVE DISCUS SIONS, I DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE. THE SAME IS AC CORDINGLY DISMISSED. ITA NO. 2595/AHD/2010 PARAM JEWELLS PVT. LTD. VS ITO W-5(2), AHMEDABAD 9 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25-11-2010 SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 25-11-2010 LAKSHMIKANT/- FIT FOR PUBLICATION IN I.T.D. J. M. ITA NO. 2595/AHD/2010 PARAM JEWELLS PVT. LTD. VS ITO W-5(2), AHMEDABAD 10 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A)- CONCERNED 5. THE DR, ITAT, CONCERNED 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD