2016 (4) TMI 573

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..... ow that all the entries of Mr. Chetan P. Shah including the entries pertaining to the assessee are fictitious. Further, the assessee has submitted his explanation that the assessee is not in possession of the relevant documents due to passage of time and this has not been found to be false by any of the authorities below. The penalty under section 271(1)(c) of the I.T. Act is leviable where the assessee does not file his return of income or does not file explanation to the show cause notice for levy of penalty or where the explanation is found to be not bonafide. None of these circumstances exist in the case before us. In view of the same, we are of the opinion that the penalty under section 271(1)(c) of the Act, is not leviable in the case .....

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..... the services of Mr. Chetan P. Shah has booked bogus expenditure to an extent of ₹ 17,63,784. In view of the same, a notice under section 148 of the Act was issued to the assessee on 30.03.2010. The assessee filed a letter dated 20.05.2010 stating that the return of income already filed on 03.11.2003 may be treated as the return filed in response to the notice under section 148 of the I.T. Act and also sought the reasons for reopening. On receipt of reasons for reopening of the assessment, assessee submitted that he cannot produce any evidence in respect of the expenditure of ₹ 17,63,784 claimed in the P L A/c since no documentary evidence is in the possession of the company in respect of their claim. Therefore, the assessee ex .....

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..... t retained the relevant documents as the period of six years were already completed and the addition was agreed to only due to his failure to produce necessary evidence and not because there was any positive evidence on record in the possession of the A.O. to demonstrate that these were fictitious expenditure claimed by the assessee. He has submitted that undisputedly the amount was paid by way of DDs and that the Revenue has not brought any evidence to show that the amount has been repaid to the assessee in any other form. Thus, according to him, the penalty is not leviable. 4. The Ld. D.R., on the other hand, supported the orders of the authorities below. 5. Having regard to the rival contentions and the material on record, it is se .....

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