9911796707
TMI Blog2014 (5) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... cord are as under. 3. Assessee is a company engaged in the business of manufacturing and processing of textile goods. Assessee electronically filed its return of income for AY 2007-08 on 31.10.2007 declaring total income of Rs 2,96,20,960/-. The case was selected for scrutiny and thereafter the assessment was framed u/s 143(3) vide order dated 22.10.2009 and the total income was determined at Rs 3,00,61,030/-. Aggrieved by the order of AO, Assessee carried the matter before CIT(A). CIT(A) vide order dated 3.1.2011 partly allowed the appeal of the assessee. Aggrieved by the order of CIT(A), Assessee is now in appeal before us and has raised the following grounds:- 1. The Id. CIT(A) XI Ahmedabad has erred in law and on facts in passing appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y exports and no income has been earned by making such expenditure. Appellant has not been able to controvert the findings ofA.O. No evidence has been furnished to show that the expenses were wholly in connection with business. Therefore, A.O's action is upheld. These grounds of appeal are dismissed. 5. Aggrieved by the order of CIT(A), Assessee is now in appeal before us. 6. Before us, the Ld A.R. reiterated the submissions made before CIT(A) and also submitted that similar disallowance was made in the case of Assessee in AY 1995-96 which was deleted by Hon'ble Tribunal. He placed on record the copy of the decision reported in (2008) 115 TTJ (Ahd) 716 and pointed to the relevant para placed at page 8 of the paper book. He further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also a fact that while disallowing the expenses, the AO had not doubted the expenditure nor pointed out any specific instance of personal expenses. At the same time, CIT(A) has upheld the disallowance by noting that Assessee could not controvert the findings of Assessing Officer and has held the part of the expenses to be personal in nature. It is also a fact that each assessment year is a separate unit and the principle of res judicata is not applicable to income tax assessments. Considering the aforesaid facts, we are of the view that the ends of justice shall be met if the disallowance is restricted to Rs 1 lac as against Rs 3,80,477/- made by the AO. We thus direct accordingly. Thus this ground of the Assessee is partly allowed. 2nd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the outset, Id A.R. fairly conceded and submitted that the issue of employees contribution has been decided against the assessee by the decision of jurisdictional High Court in the case of CIT vs Gujarat State Road Transport Corporation (tax appeal No 637 of 2013 order dated 26.12.2013) and therefore the issue is covered against Assessee. 11. We have heard the rival submissions and perused the material on record. It is an undisputed fact that Assessee had deposited employees contribution of ESIC and PF for various months after the due dates prescribed under the Act (as listed at page 4 of the assessment order). Hon'ble Gujarat High Court in the case Gujarat State Road Transport Corporation (supra) has held that "any sum with respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs 4,56,000/- u/s 271(l)(c) of the Act. Aggrieved by the order of AO, Assessee carried the matter before CIT(A). CIT(A) deleted the penalty by holding as under:- 3.7.2. It is settled law that penalty proceedings are distinct from assessment proceedings. Disallowance of employees contribution is subject-matter of divergent judicial opinion. In view of the Apex Court decision in the case of Reliance Petro products [ 322ITR 158(SC)] mere rejection of claim made does not attract penalty u/s. 271(l)(c). In the instant case A.O. has not made out any case that the appellant concealed income or furnished inaccurate particulars thereof. Hence, the impugned penalty levied is cancelled. These grounds of appeal are allowed. 15. Aggrieved by the or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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