9911796707
TMI Blog2012 (11) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ome at Rs. Nil. The assessment was finalised vide order passed u/s. 143(3) on 28-12-2004 determining the total income at Rs. 6,72,81,044/-. While finalizing the assessment, disallowance of Rs. 3,72,63,859/- was made on account of adjustments in respect of international transactions. Against the order of A.O., the assessee preferred appeal before CIT (A). CIT (A) vide his order dated 24-5-2006 confirmed the disallowance to the extent of Rs.1,38,13,859/-. A.O. initiated penalty proceedings on the additions made and vide order dated 23-3-2007 levied penalty u/s. 271(1) (c) on the aforesaid addition sustained by CIT (A) for the reason that according to the A.O. the assessee had concealed income to the extent of Rs.1,38,13,859/- by claiming exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded deep scrutiny by the A.O. to find out other international transactions to arrive at the correct determination of income of the appellant as it has been found in this case by the A.O. that the appellant has incurred other international transactions like traveling expenses and legal fees on behalf of the Associated Enterprises. Thus, the disclosure made by the Accountant and the appellant is not true and correct, and not full disclosure and the information regarding all international transactions have not been reported, so it amounts to furnishing of inaccurate particulars of its income. The appellant is advised by a team of legal and professional experts and for non-reporting of the said transactions, it can definitely be said that it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowed shall be deemed to represent the income in respect of which particulars have been concealed or inaccurate particulars of income have been furnished. Provisions of Explanation 7 to section 271(1)(c) are akin to the provisions of Explanation 1 to section 271(1)(c). In both the Explanations, it is for the assessee to prove that the explanation was bona fide and a particular action or omission was in good faith and with due diligence. The burden cast on the appellant is heavy. As per Explanation-7 to section 271(1)(c), the appellant has to prove that the price charged or paid in such transactions was in accordance with the provisions of section 92 C in good faith and with due diligence. As the appellant has not been able to discharge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 59 5. CIT (A) vide order dated 24-5-2005 held in favour of assessee with respect to additions made in respect of HRM function. However, the other two adjustments namely on account of traveling and legal expenses were upheld by CIT (A). 6. The Ld. A.R. submitted that the traveling expenses incurred by the assessee relate to the persons seconded to the aforesaid enterprises. A separate recovery was not warranted due to the business rationale namely that the secondment of the person leads to more offshore business for the assessee. The persons seconded get substantial amount of experience and knowledge which enhances their skill and efficiency and on their return the upgraded skills and experience helps the assessee to use them on high end j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n record. It is seen that the A.O. has levied penalty on the adjustments made by the TPO with respect to international transactions. It is an undisputed fact that the international transactions were reported by assessee in Form 3CEB.Transfer Pricing adjustments have been made only in relation to certain activities stated by Transfer Pricing Officer to be of international transactions. The penalty under sec.271(1)(c) of the Act is leviable if the A.O. is satisfied in the course of any proceedings under the Act that any person has concealed the particulars of his income or furnished inaccurate particulars of such income. It is well settled that assessment proceedings and penalty proceedings are separate and distinct and the finding in the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case the assessee has furnished all the required details called for from time to time. Assessee had also disclosed material facts before the A.O. The A.O. has not given any finding indicating that the assessee had failed to offer any information or the information provided was false. The assessee has not concealed any material fact and the information given by the assessee has not been found to be incorrect. The claim of the assessee was reduced by CIT (A). In view of the totality of the aforesaid we are of the view that no penalty can be levied in the present case. We therefore, direct the deletion of penalty. Thus the ground of the assessee is allowed.
9. Thus the appeal of the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X
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