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TMI Blog2012 (11) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... ness promotion expenses without appreciating the all the details and particular were filed before the Assessing Officer, therefore, there was no concealment or furnishing of inaccurate particulars of income, the penalty may be deleted. ii) The penalty order has been passed by the Assessing Officer on 30.1.2009 more so when the CIT(A) order in quantum proceeding was passed on 17.12.2004, therefore, the penalty order is passed much beyond the time limit prescribed under the provision of sec. 275(1) of the Act." 3. At the time of hearing, the ld AR of the assessee has submitted that the assessee does not press ground no.2 regarding limitation of penalty order and the same may be dismissed. The ld DR has no objection, if the ground n o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other companies for the business purpose of the group companies and which do not relate to the business of the assessee company. The assessee company is separately assessed to tax from the group companies of the group. In these facts of the case, we hold that there is no mistake in the order of the CIT(A) in holding that since the assessee has not been able to prove that these expenses have been incurred wholly and exclusively for the purpose of business of the assessee for the Assessment Year under consideration and therefore, the disallowance made by the Assessing Officer can not be interfered with. Accordingly, order of the CIT(A) is confirmed and the ground of appeal of the assessee is dismissed." 6.1 In the meantime, the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in 322 ITR 158 as well as the decision of the Tribunal in the case of Hindalco Industries Ltd vs ACIT reported in 41 SOT 254(Mum ). 7.2 On the other hand, the ld DR has submitted that this is a case of diversion of expenditure not related to the assessee; therefore, it is a clear case of furnishing inaccurate particulars of income whereby the assessee has avoided the tax. The ld DR has further submitted that the claim was found as wrong on facts because the expenditure was not incurred for the purpose of the business of the assessee but for the business purpose of the sister concern. He has further pointed out that the Assessing Officer has given a finding of fact in para 3 & 3.2 of the penalty order that the expenditure booked under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee vide its letter dated 3.3.2003 submitted that most of the trips have been undertaken on behalf of the group companies and gave many major reasons for the same. 3.2 Further, the assessee has debited a sum of Rs.7,83,116/- to its P & L A/c under the head Business promotion expenses. The assessee was asked to furnish the details of the same along with the vouchers and establish the business purpose of these expenses. The assessee filed the details vide letter dated 3.3.2003 and submitted that most of the expenses are in connection with travelling specified above such as Hotel Bills for food, accommodation, meeting with various peoples, etc. Payments are made through credit cards of the Directors and we are also producing requisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l relied upon by the assessee are not applicable as has been held by the Hon'ble Delhi High Court in the case of Commissioner of Income-tax v. Zoom Communication P. Ltd., reported in 327 ITR 510 as under: "In the case of Reliance Petroproducts P. Ltd. [2010] 322 ITR 158 (SC), the addition made by the Assessing Officer in respect of the interest claimed as a deduction under section 36(1)(iii) of the Act was deleted by the Commissioner of Income-tax (Appeals) though it was later restored, by the Tribunal, to the Assessing Officer. The appeal filed by the assessee against the order of the Tribunal was admitted by the High Court. It was, in these circumstances, that the Tribunal came to the conclusion that the assessee had neither concealed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd unsustainable claims without there being any basis for making them, in the hope that their return would not be picked up for scrutiny and they would be assessed on the basis of self-assessment under section 143(1) of the Act and even if their case is selected for scrutiny, they can get away merely by paying the tax, which in any case, was payable by them. The consequence would be that the persons who make claims of this nature, actuated by a mala fide intention to evade tax otherwise payable by them would get away without paying the tax legally payable by them, if their cases are not picked up for scrutiny. This would take away the deterrent effect, which these penalty provisions in the Act have. We find that the assessee before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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