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TMI Blog2011 (4) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... he penalty levied in this regard. disallowance u/s 14A - As this issue has been set aside in the quantum appeal and the addition no longer stands, set aside the levy of penalty also. Donation u/s 80G - appellant has submitted that disallowance of deduction on account of non production of receipts cannot be considered as concealment of income or furnishing of inaccurate particulars of income - The receipt has not been made available before more than one authority and before us and also before the authorities in the penalty proceedings - Hence we confirm the penalty on this issue. Deduction u/s.80HHC - The Apex Court in the case of CIT vs Reliance Petroproducts Pvt. Ltd. [2010 -TMI - 75701 - SUPREME COURT ], held that as long as the assessee had not given any information in the return which is incorrect, making an incorrect claim in law will not tantamount to furnishing inaccurate particulars and penalty u/s 271(1)(c) is not attracted - Hence penalty was not leviable - Delete the penalty levied in respect of disallowance u/s 80HHC. X X X X Extracts X X X X X X X X Extracts X X X X ..... The CIT(A) rejected the Assessee's plea observing as under:- "I have considered the facts of the case and submissions of the AR/Appellant. The above explanation of the appellant is not tenable Provisions of sec. 94 are very much clear and it cannot be said that there is any ambiguity in the provisions and therefore, appellant should not have claimed the aforesaid loss knowing fully well that the provisions of sec. 94 are applicable to such transactions. Appellant has adjusted the aforesaid loss against the profit on sale of short term capital gains which is illegal. Appellant being a reputed company, advised by reputed and learned counsels for the past many years cannot be said to be not aware of the said provisions of the Act. For the above reasons, appellant's submissions on this issue are rejected and it is held that AO is right in levying penalty u/s 271(1)(c) and holding that the appellant has furnished inaccurate particulars of its income. Accordingly, levy of penalty is justified." 7. The learned Counsel for the assessee Ms. Arati Vissanji reiterated the submissions made before the Ld. CIT(A).The learned Counsel argued that the very heading of sec. 94(7) is avoidance. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l proceedings against the assessment order, while upholding the aforesaid disallowances CIT(A) asked the appellant to clarify to which specific asset the aforesaid expenses related to. However, appellant could not offer any satisfactory explanation and stated that such capitalized expenses should be treated as related to computer/software expenses. However CIT(A) was no satisfied with the above explanation of the appellant. CIT(A) for the following reasons dismissed the appellant's appeal:- "I do not find any irregularity in the AO's action in disallowing these expenses during this year as the SAP project commenced only next year. Since legal/professional expenses were not related to any specific depreciable asset which was put on operation during this current assessment year, no depreciation can be allowed during the current year. Allowing the claim as revenue expenditure in next year is also rejected as the appellant has not been able to establish that this is revenue in nature. However, the AO will have to establish during the next assessment year whether the amount disallowed are connected with any specific depreciable asset and if it is so, only then the question of allowing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowed a sum of Rs. 42,002/- and subsequently levied penalty on the same. The Ld.CIT(A) has confirmed the levy of penalty on the ground that the onus is on the assessee to prove the claim for deduction. 17. The Ld. CIT(A) held as follows:- "On levy of penalty on the same, appellant has submitted that disallowance of deduction on account of non production of receipts cannot be considered as concealment of income or furnishing of inaccurate particulars of income. However, the contentions are not acceptable. Appellant has made a claim of deduction and the onus is on the appeallant to furnish necessary evidence to substantiate that the aforesaid claim is genuine. In the absence of proper receipts, Assessing Officer rightly disallowed the same. Therefore, in my opinion, Assessing Officer is right in levying penalty u/s. 271(1)(c) on the same. Accordingly, the penalty levied is upheld." 18. We find no infirmity in the order of the Ld. CIT(A). The receipt has not been made available before more than one authority i.e. before the Assessing officer, CIT(A) and before us and also before the authorities in the penalty proceedings. This only shows that there is a clear violation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been contested by the appellant before the CIT(A). in any case, assessee filed appeal before the CIT(A), who has partly allowed the appeal on this issue. Assessing Officer has levied penalty on the excess deduction claimed u/s.80HHC of the Act. Objecting to the levy of penalty, appellant had submitted that indirect cost of trading export has been computed by the appellant on estimate basis and available data. Assessing Officer has computed indirect cost taking into consideration the entire direct costs. Similarly, items of other income which have been claimed as part of business profits and excluded by the Assessing Officer are not to be excluded based on various judicial pronouncements including those in the case of appellant's own case. As regards excluding other income from the profit of business appellant has further, stated that if any particular item is taxed as part of the business profits and arises out of business, the nomenclature shall not decide whether it has to be excluded from the business profit or not or business u/s. 80HHC. Appellant had also relied upon the decisions in the following cases:- I) Commissioner of Income Tax vs. Bangalore Clothing Co. (260 ITR 37 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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