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TMI Blog2016 (1) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, Srinivas Vyas, Proprietor of M/s.Pushpak Sales Corporation and Manohar Vyas, Proprietor of M/s.Srinivasa Enterprises. 2.2) The Assessing Officer had concluded in the assessment that no services had been rendered, by the agent, for the payment of the commission. Such a finding was based on the survey conducted in the case of D.D.Vyas. The additions made in the assessment years had been upheld by the Income Tax Appellate Tribunal, in I.T.A.Nos.1236, to 1239/Mds/2006, dated 15.6.2007. On being satisfied that the assessee firm had concealed the particulars of its income and had furnished inaccurate particulars of such income, by claiming false expenditure, the Assessing Officer had levied penalty, under Section 271(1) (c) of the Income Tax Act, 1961. 2.3) Aggrieved by the said order, the assessee had preferred appeals before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) had held that the commission payments made to D.D.Vyas and his sons cannot be treated as false or inaccurate particulars and accordingly, the appeals had been allowed. 2.4) Aggrieved by the order passed by the Commissioner of Income Tax (Appeals), the Revenue had filed appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad erred in holding that it is not the case of the Revenue that the payments claimed by the assessee were found to be bogus and that the assessee had not concealed particulars of income or furnished inaccurate particulars of income, as laid down in Section 271(1)(c) of the Income Tax Act, 1961. 6. It had also been submitted that the Tribunal had failed to note that the judgment of the Delhi High Court, in C.I.T. Vs. Zoom Communication P Ltd. (327 ITR 510), would apply to the facts of the present case. The learned counsel had further submitted that the quantum appeals filed by the assessee had become final. He had further submitted that it had been found that the sub agents of D.D.Vyas and his Sons were incapable of being commission agents, as they had no knowledge of the business. 7. It had also been stated that the cheques deposited in the name of the commission agents had been withdrawn, immediately, thereafter. It had also been stated that, in spite of sufficient particulars having been given, the assessee had not furnished sufficient materials to show the bona fide nature of the transactions carried on by the commission agents. No books of accounts had been maintained to prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal) No.246 of 2007, dated 5.3.2014, COMMISSIONER OF INCOME TAX Vs. CHOLAMANDALAM INVESTMENT & FINANCE CO. LTD., the Division Bench of this Court had held that, in order to invoke the penalty proceedings, under Section 271(1)(c), the Revenue should prove that the claim made was not sustainable in law and the assessee had made a concealment of the particulars of income. 10.4 In Tax Case (Appeal) No.504 of 2009, dated 12.11.2013, COMMISSIONER OF INCOME TAX Vs. GEM GRANITES, the Division Bench of this Court had held that, the Explanation to Section 271(1) raises a presumption of concealment, when a difference is noticed by the Assessing Officer between the reported and the assessed income. The burden is on the assessee to show otherwise, by cogent and reliable evidence and when the initial onus placed by the explanation has been discharged by the assessee, the onus shifts on the revenue to show that the amount in question constituted their income and not otherwise. 11. In view of the submissions made by the learned counsels appearing on behalf of the appellant, as well as the respondent in the present appeals and on a perusal of the records available and in view of the decisions c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im of deduction will not automatically attract a penalty, under Section 271(1) (c) of the Act. 15. It had also been held that mere failure of an assessee to explain satisfactorily the amounts shown as expenditure would not lead to imposition of the penalty, unless there are some materials to prove that the claim was false, as held by Income Tax Appellate Tribunal in the case of SUPER METAL INDUSTRIES Vs. DCIT 317 ITR (AT) 161 (Mumbai). 16. The allegation made by the department that the subagents were tea stall owners and soap sellers, who had been introduced by D.D.Vyas and his sons, for the purpose of opening of bank accounts, cannot be put against the assessee. The assessee cannot be held to be liable for the sub agents, if any, nominated by the Commission agents, who had received the payments of commission. The department had failed to discharge the onus of proving that the assessee had made false claims, wilfully, or had furnished inaccurate particulars, while claiming deductions on the payment of commission. 17. We find that the Tribunal had given proper reasons for dismissing the appeals, confirming the order passed by the Commissioner of Income Tax (Appeals). The Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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