TMI Blog2015 (5) TMI 1146X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of the expenditure even though it was not acceptable to the revenue, would not lead to inference that assessee has concealed the particulars of income or filed inaccurate particulars of income. Nothing is brought on record if claim of assessee was incorrect in law or was malafide. - Decided in favour of assessee - ITA No. 972/CHD/2013 - - - Dated:- 19-5-2015 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER Appellant by : Shri Manjit Singh, DR Respondent by : Shri Parikshit Aggarwal O R D E R PER BHAVNESH SAINI,JM This appeal by revenue is directed against the order of ld. CIT(Appeals) Chandigarh dated 01.07.2013 for assessment year 2006-07 challenging the cancellation of pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (l)(c) of the Act after discussing all the above issues and has mentioned as under on the last page of the penalty order: On account of above, I am satisfied that the assessee has furnished inaccurate particulars of income by claiming wrong deduction willfully. Assessee even did-not file the appeal on this issue. Assessee was aware that it had not deducted tax at source and therefore the expense was not admissible to it as per the provisions of section 40(a)(ia) of the Income Tax Act, 1961. Still the assessee willfully claimed the expense in its profit loss account and thereby furnished inaccurate particulars of income which is liable to penal action u/s 271(l)(c) of the Income Tax Act Therefore penalty u/s 271(1 )(c) is imposed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation 1.-Where in respect of any facts material to the computation of the total income of any person under this Act, - (A) such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be false, or (B) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bonafide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 From a perusal of the last para of the penalty order (reproduced in para 3.1 above), it is evident that the Assessing Officer intended to levy penalty for concealment only in respect of disallowance u/s 40(a)(ia), but has computed the penalty on the entire addition confirmed by Hon'ble ITAT. Hence, the penalty levied on additions other than u/s 40(a)(ia) also deserves to be cancelled 5.3 In view of the above discussion, the penalty for concealment levied in this case is cancelled. All the grounds taken by the appellant are allowed. 6. In the result, the appeal is allowed. 6. The ld. DR relied upon order of the Assessing Officer and submitted that if the case of the assessee would not have been taken up for scrutiny, no addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made a claim of deduction in the return of income and explained the facts but the same were not accepted by the authorities below and additions have been confirmed. Therefore, it is a case of mere disallowance of expenditure without bringing any adequate material against assessee to prove that assessee has concealed the particulars of income or has furnished inaccurate particulars of income. The appeal of the assessee on substantial question of law with regard to disallowance under the provisions had been admitted by Hon'ble Punjab Haryana High Court. The Hon'ble Punjab Haryana High Court in the case of CIT Vs Haryana Warehousing Corporation 314 ITR 215 held as under : Held, dismissing the appeal, that the deduction claime ..... X X X X Extracts X X X X X X X X Extracts X X X X
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