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TMI Blog2012 (3) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... November, 2009 for assessment year 2006-07 in Appeal No. CIT(A)- XV/DCIT/Cir.9/50/09-10, challenging the deletion of penalty of ₹ 1,97,55,306/- levied by the AO u/s 271(1) (c) of the IT Act. 2. Briefly, the facts of the case as emerged from the order of the learned CIT(A) are that penalty of ₹ 1,97,55,306/ has been imposed by the AO with respect to the additions of (i) ₹ 5,85,87,521/- made on account of disallowance u/s. 40(a) (ia) of the IT Act and ₹ 1,03,222/- made on account of disallowance out of telephone/office/site staff welfare expenses. The matter reached before the learned CIT(A). The learned CIT(A), after considering the rival submissions directed the AO to delete the penalty with respect to addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal in its order dated 22-02-2011 in the case of M/s. Saraswati Construction Co. (supra) in Para 5 Page 6 has held as under: 5. In the present case before us, the facts are undisputed that the assessee had deducted TDS from gross contact payment to catering contractor but the same was not deposited into govt. exchequer before expiry of time prescribed under sub-section 1 of section 2000 of the Act in view of section 40(a) (ia) of the Act. We find that this is not allowable as deduction while computing the income chargeable under the head profit gains of business or profession for the year. We find from the orders of the lower authorities that there is no allegation that the payment of catering expenses on which TDS is deducted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te basis does not attract penalty. The learned CIT(A) on proper appreciation of facts has rightly deleted the penalty made by the AO on both the above issues. The learned DR also has not produced any material on record to controvert the findings of the learned CIT(A). 4.2 The same issue has also been decided in favour of the assessee by the ITAT Ahmedabad B Bench vide order dated 13-03-2012 in ITA No.1041/Ahd/2010 for AY 2006-07 in the case of M/s. Lucky Star International by dismissing the departmental. The findings of the Tribunal in Para 6 to 8 are reproduced as under: 6. We have heard the learned both the parties, perused the orders of the authorities below and considered the materials on record. During the course of hearing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ITA No.3820/Del/2010 dated January,7, 2011 (PB- 1) wherein it has been held as under: Income Tax Sections 40(a) (ia), 271 (1) (c) Whether penalty is leviable in a case where the substantial returned income proves the bonafide of assessee vis- vis disallowance of 40(a) (ia). Assessee Company filed its return of income on 22 nd December 2003 declaring an income of ₹ 6.32 Crores. An assessment was passed u/s 143(3) on 30 th March 2006 whereby total income of the assessee has been determined at ₹ 11.53Crores. During the course of assessment proceeding Ld. AO found that the assessee had made the provisions in respect of certain foreign payments and claimed these provisions without deducting corresponding TDS. AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (PB 9 to 11) wherein also identical issue has been decided by the Tribunal in favour of the assessee and against the Revenue vide Para 5 of its order by holding as under: At the time of hearing on 16.6.2011, none appeared on behalf of the assessee. We heard the Departmental Representative. In this case, penalty is levied for disallowance of expenditure u/s 40(a) (ia) of the Income Tax Act. Non deduction of TDS by the assessee was resulted in disallowance of expenditure u/s 40(a) (ia), that itself cannot be construed as furnishing inaccurate particulars of income or concealment of income. The assessee has failed to deduct TDS which resulted in disallowance of expenditure. In our opinion, the mistake committed by the assessee was compen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove discussions and the decisions cited by the assessee, we find force in the submissions of the assessee. We are of the view that the learned CIT(A) on proper appreciation of the facts of the case, considering the submissions of the assessee and the citations referred to by the assessee before him, has rightly deleted the penalty and we find no justification to interfere in the order of the learned CIT(A) deleting the penalty in the matter in the absence of any material produced by the learned DR to controvert the same. We confirm his findings. There is no merit in the ground of appeal of the Revenue. The same is accordingly dismissed. 8. In the result, the appeal of the revenue is dismissed. 4.3 Considering the facts of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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