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TMI Blog2012 (10) TMI 665X X X X Extracts X X X X X X X X Extracts X X X X ..... n view of the assessee holding physical stock of the said purchases. Similarly, part sustenance of expenditure disallowed under the various heads as Business promotion, depreciation cannot be a ground for levy of penalty u/s. 271(1)(c). Simply because a part of expenditure is unacceptable for deduction forming part of whole of the expenditure otherwise allowable clearly indicates that it was not a matter of concealment of income or for that matter furnishing of inaccurate particulars. Therefore, on this score, the penalty so levied u/s. 271(1)(c) does not have any legs to stand on.The said penalty of Rs.26,853 sustained by the learned CIT(A) is cancelled and the appeal of the assessee is allowed. - I.T.A.No. 209/CTK/2012 - - - Dated:- 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was not to be considered in view of the provisions of Section 145A as claimed by the assessee dismissed the assessee s contention praying for deletion of the addition. However, the learned CIT(A) gave part relief when the total disallowance of other expenditure amounting to Rs.20,205 was reduced to Rs.9,000 sustained. There was no second appeal by the assessee. 3. The Assessing Officer on the basis of order passed pursuant to the appellate order proceeded to levy penalty u/s. 271(1)(c) when the total amount for the purpose of quantum of tax sough to be evaded was considered at Rs.26,853. The Assessing Officer, however, levied penalty of Rs.35,000 which was appealed against before the learned CIT(A) who has reduced the levy of penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excess purchase by the Assessing Officer to be added in the hands of the assessee. The learned CIT(A) confirmed this addition on the criteria that TCS is not an allowable expenditure rather leans in favour of the assessee to the extent that there was neither any concealment of income nor furnishing of inaccurate particulars insofar as the error on the part of the deductor could not be held against the assessee. For this proposition, he has filed the balance sheet for the impugned Assessment Year along with the details which clearly indicate that there was no violation under the provisions of Section 145A. The auditors have verified the creditors therefore were supported by holding the closing stock in the audited balance sheet more that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) be deleted. 5. The learned DR supported the orders of the authorities below. He submitted that the assessee has not been able to establish as to how the amount of Rs.68,508 was purchases noted by him in the books of account were not recorded sale by the OSBCL. It is an afterthought for holding the same as technical error being reconciliation of the TCS which has been concluded acceptable to the OSBCL in the Assessment Year 2007-08. The learned CIT(A) therefore rightly considered confirming the penalty so levied at 100% of the tax sought to be evaded as against higher amount levied by the Assessing Officer. 6. We have heard the rival contentions of the parties and perused the material available on record. Considering the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue for claiming expenditure of income tax collected by the seller of liquor. Therefore, we are of the considered view that neither there was a case of concealment of income insofar as the nomenclature excess purchase had been balanced by stock held by the assessee against which no controversy has been reported either by the Assessing Officer or the learned CIT(A). The purported income had been rendered to tax by the assessee itself. In other words, the claim of TCS as held by the authorities below was a mere withholding of tax in which the deductor had committed error stood reconciled by indicating the purchases which was not an expenditure to be disallowed in view of the assessee holding physical stock of the said purchases. Similarl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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