Page 16 - DTPA Journal December 21

e Journal
eJournal

Nov. - Dec., 2021

a sum equal to the aggregate amount of such false the broker as because the entries in their
or omitted entry. respective books were in the nature of
accommodation and a false one.
Explanation. — For the purposes of this section,
“false entry” includes use or intention to use — Further, Penalty u/s 270A of Income Tax Act,
1961 may also be imposed on both assessee and
(a) forged or falsified documents such as a false
the broker for misreporting of income.
invoice or, in general, a false piece of documentary
evidence; or Conclusion
(b) invoice in respect of supply or receipt of goods In the faceless era of assessment, we shall witness
or services or both issued by the person or any such additions more frequently as time passes by.
other person without actual supply or receipt of Transient of information from one officer to
such goods or services or both; or another officer or assessment unit is now more
likely than earlier. In time to come, it will be more
(c) invoice in respect of supply or receipt of goods
difficult for the tax practitioners to handle
or services or both to or from a person who does
faceless assessment where such additions and
not exist.]”
disallowances will be common. Apart from
The above section penalises all the false entries section 37(1), there are other sections in Income
found in the books of accounts of an assessee and Tax Act which prohibits an expenditure for
the amount of such penalty shall be less than equal deduction against income either fully, partly or not
to the total value of the entries which are found to during the relevant financial year in which such
be false/bogus. Hence, it is stated in context to the expenses were incurred. To name a few, section
aforesaid illustration, that not only the provisions 43B, Section 40(2)A, Section 40(a)(ia)of Income
of section 115 BBE will be attracted, the AO may Tax Act, 1961. However, section 37(1)of Income
also invoke section 271AADof Income Tax Act, Tax Act, 1961 is basic test for allowability of
1961and impose 100% penalty on the total amount business expenditure against business income of
of brokerage expense claimed by the assessee and the assessee.
total amount of income from brokerage claimed by

12

e-JOURNAL
e-JOURNAL