TMI Blog2018 (7) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... ame as expenses. We are of the view that the purchase of software does not attract any TDS provision. Disallowance of business promotion expenses for non-presentation of vouchers is for the reason that the amount paid on tea, coffee etc. on clients is due to smallness of denomination of payments and bills and vouchers could not be preserved. Accordingly, in our view this has not a case of furnishing of inaccurate particulars of income because the assessee has filed all the particulars of income before the AO during the assessment proceedings or in the return of income. This may be a case of disallowance of expenses but it is not a case of furnishing of inaccurate particulars of income. It cannot be said that the assessee has concealed the income by furnishing of inaccurate particulars of income. Accordingly, we delete the penalty and allow the appeal of the assessee. - ITA No. 660/Mum/2017 - - - Dated:- 29-6-2018 - Sri Mahavir Singh, JM And Sri G Manjunatha, AM Appellant by : Ms. Neha Paranjpe, AR Respondent by : Ms. Pooja Swaroop, DR ORDER Per Mahavir Singh, JM This appeals by the assessee is arising out of the order of Commissioner of Income Tax (Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me. The assessee has not challenged these disallowances and accepted the additions for the reason that the assessee is a 78-year-old cancer patient. The AO started penalty proceedings under section 271(1)(c) of the Act on these three disallowances and assessee explained each of the item. But the AO levied the penalty on these three items as the assessee could not furnish any satisfactory explanation/ details / submissions during the assessment proceedings so as to enable the AO to verify the veracity of the expenses claimed on the exempt income, TDS not deducted on payment made for purchase of software and business promotion expense. Even the AO noted that in penalty hearing the assessee has not presented any satisfactory evidences which can justify that the added income has not been deliberately concealed. For this, the AO recorded the following facts: - During penalty hearing too, the assessee has not presented any satisfactory evidence which can justify that the added income had not been deliberately concealed. Mere claims of non-keeping of vouchers and payment for purchase of software of life of one year or less have been quoted, without any supporting evidence proving the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the quantum addition, the penalty under section 271(1)(c) of the Act cannot be levied for furnishing of inaccurate particulars of income. 6. As regards to the second item of disallowance due to non-compliance of TDS provisions for non-deduction of TDS. She stated that the assessee has made payment for purchase of software which has been treated as having a life of one year or less and has been written off and claimed the same as an expense. According to her, there is no provision that purchase of software attracts TDS. Hence, the disallowance itself is bad and the penalty at all cannot be levied on these disallowances. As regards to the disallowance of business expenses, she stated that assessee incurred expenses on tea, coffee, etc. on clients and in proportion to total receipts of ₹ 1,68,58,578/-, the expenses of ₹ 54,334 which is minuscule percentage of the total receipts and this is bare minimum expense on tea, coffee, etc. According to her, these are business expenses necessary for business expediency and these are to be incurred in regular course of business. However, she admitted that due to petty amounts on tea, coffee paid to tea boys, vouchers could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and vouchers could not be preserved. Accordingly, in our view this has not a case of furnishing of inaccurate particulars of income because the assessee has filed all the particulars of income before the AO during the assessment proceedings or in the return of income. This may be a case of disallowance of expenses but it is not a case of furnishing of inaccurate particulars of income. In view of the decision of Hon ble Supreme Court in the case of T. Ashok Pai vs CIT (2007) 292 ITR 11 (SC), wherein Hon ble supreme Court has made a distinction between furnishing of inaccurate particulars of income. Hon ble Supreme Court observed as under: - 16. The term 'inaccurate particulars' is not defined. Furnishing of an assessment of value of the property may not by itself be furnishing of inaccurate particulars. Even if the explanations are taken recourse to, a finding has to be arrived at having regard clause (a) of Explanation 1 that the Assessing Officer is required to arrive at a finding that the explanation offered by an assessee, in the event, he offers one was false. He must be found to have failed to prove that such explanation is not only not bona fide but all the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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