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TMI Blog2015 (11) TMI 1366X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 64,77,790/-, Assessing Officer has already allowed the claim of commission of ₹ 61,77,790/- and nothing contrary to the type of services and payment to the agent has been brought before us and therefore, in these circumstances, we do not find any reason to sustain the penalty imposed u/s.271(1)(c) of the Act at ₹ 1,07,100/- on the assessee and therefore, we delete the same and allow the ground of assessee. - Decided in favour of assessee. - ITA No. 1582/Ahd/2012 - - - Dated:- 2-11-2015 - Shri Rajpal Yadav, Judicial Member And Shri Manish Borad, Accountant Member For the Petitioner : Shri Sunil Talati, A.R. For the Respondent : Shri Dipak Sutaria, Sr. D.R. ORDER Per : Manish Borad, Accountant Member This appeal of the assessee is directed against the order of CIT(A)-IV, Baroda, dated 07.05.2012. Order u/s.271(1)(c) of the Income Tax Act,1961 (hereinafter referred to as the Act ) for the A.Y. 2002-03 was framed by ACIT, Anand on 09.02.2011. The assessee has raised following grounds :- 1. The order passed by the Hon ble CIT(A), Baroda is bad in law, contrary to legal pronouncements and same be quashed. 2. The Hon ble CIT(A), Bar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, but could not succeed as ld. CIT(A) confirmed the penalty imposed u/s.271(1)(c) of the Act by observing as under: 10. The above entire facts show that the basic document i.e. agreement itself was not genuine in the case of appellant on the basis of which it has claimed that the services have been rendered by M/s. Arihant Metal Corporation. On the basis of above facts, it can be safely presumed that the agreement was not existing during the year under consideration and it was fabricated subsequently i.e. on 08.07.2002 with attempt to give effect to such agreement from 24-11-2001. In view of this it cannot be said that any services were actually rendered by M/s. Arihant Metal Corporation to the appellant during the year under consideration as the documentary evidence as produced by the appellant in respect of its claim of being services rendered itself is false. These facts clearly establish that the appellant has furnished inaccurate particulars of income in respect of its above claim of commission expenses of ₹ 3,00,000/- and for which it is liable for penalty u/s 271(1)(c) of the IT Act. I, therefore, confirm the penalty of ₹ 1,07,100/- as levied by the AO u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ween the assessee company and M/s. Arihant Metal Corporation. For this technical mistake, disallowance of commission of ₹ 3lacs has been done by the Assessing Officer and confirmed by the CIT(A). 5.2 Ld. A.R. further submitted that out of total commission expenses of ₹ 64,77,790/-, the only disallowance of commission expenses is of ₹ 3lacs and the remaining commission expenses of ₹ 61,77,790/- has been duly accepted and allowed by the Assessing Officer. As such, he requested that looking to the over all business of the assessee company, quantum of sales turnover, total income declared, there seems no reason to conceal income of a meager amount of ₹ 3lacs by claiming excess expenditure. On other hand, ld. D.R. firmly supported the orders of lower authorities. 6. We have heard the rival contentions, gone through the facts and circumstances of the case and perused the material on record. The only issue involved is in relation to imposition of penalty u/s.271(1)(c) of the IT Act, for furnishing of inaccurate particulars in the shape of wrong claim of commission ITA No. 1582/Ahd/ 12 A.Y. 02-03 (Power Bui ld Ltd. v s . ACIT) Page 5 expenses with intent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on commission payment is that the agreement has been entered on stamp paper dated 8th July, 2012 and the agreement has been made effective from 24th November, 2001 and the allegation by the Assessing Officer is that assessee has claimed expenses commission of ₹ 3lacs by planning the commission expenditure after the close of financial year. 6.3 This issue of disallowance of ₹ 3lacs of commission payment came before the co-ordinate Bench during course of appeal against the order of CIT(A) relating to quantum proceedings wherein co-ordinate Bench did not strike of the claim of commission paid by assessee and rather restored this issue to the file of Assessing Officer by observing as under: 7. We have heard the parties and after considering the material on record, we restore the matter to the file of AO to give an opportunity to the assessee to furnish evidence of rendering services by M/s Arihant Metal Corporation. We notice that AO initially disallowed the claim on the ground that agreement for commission was entered post-sales. Whereas the ld. CIT(A) confirmed the disallowance on the ground that fact of rendering services is not correct. Since aspect of renderin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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