Law:

Section:

Section 256, read with section 271(1)(c) of the Income-tax Act, 1961 - Reference - Question of fact - Whether where Tribunal records a finding of fact for not imposing a penalty under section 271(1)(c), it is a finding of fact and no referable question of law arises therefrom - Held, yes FACTS One M, the managing partner of the assessee-firm, made two foreign tours in the previous year relevant to the assessment year 1975-76. On one of the tours M's wife accompanied him and on the other tour the daughter of M accompanied him. The assessee claimed the expenditure on the said foreign tours as allowable expenditure. The ITO was, however, of the view that so far as the first tour was concerned, the tour was merely undertaken for medical purposes. The assessee contended that during his stay in the foreign country, M contacted various parties dealing in jewellery trade for the purpose of business of the assessee. Three-fourth of the expenses relating to the first trip were disallowed by the ITO and only one-fourth of the expenses were allowed as business expenditure. Regarding the second tour, in the report submitted to the Reserve Bank, regarding export promotion tour abroad undertaken by M, it had been submitted by the assessee that the daughter of M accompanied him on the tour and she was admitted in a hospital there. The ITO disallowed one-fourth of expenditure incurred on the second tour as the expenditure incurred was for private purposes. On appeal, the Tribunal also upheld the ITO's order. Thereafter, the ITO imposed penalty under section 271(1)(c) holding that the assessee had furnished inaccurate particulars of income inasmuch as the expenses of the partner and his relatives, to the extent they were disallowed, were claimed as business expenses. On appeal, the Tribunal, however, set aside the order imposing the said penalty and inter alia,observed that the impugned expenditure was incurred by the assessee for the purpose of earning income under the bona fide belief that the entire expenditure incurred on foreign tours would be allowed by the revenue. The Tribunal also rejected the revenue's application for reference under section 256(1) stating that its…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492