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TMI Blog2017 (4) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... , CA For The Department : S h. FR Meena, Sr. DR ORDER PER H.S. SIDHU, JM Assessee has filed the appeal against the Order dated 05.12.2013 passed by the Ld. Commissioner of Income Tax (Appeals)-XVII, Delhi pertaining to assessment year 2007-08 on the following grounds:- 1. The order passed by the Hon'ble CIT(A) is bad in law, wrong on facts and against the principles of natural justice. 2. (a) The Hon'ble CIT(A) has erred in confirming the penalty of ₹ 1374742/- levied u/s 271(1)(c) of the Income Tax Act and has failed to appreciate that the company has not concealed its income or furnished inaccurate particulars thereof and as such the penalty u/s 271 (1)(c) has been wrongly imposed and the penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts in brief are that the assessment was completed vide order passed u/s. 143(3) of the I.T. Act, 1961 on 18.12.2009 at a total income of ₹ 1,96,93,883/- as against the returned income of ₹ 1,56,09,683/- and addition of ₹ 40,59,064/- on account of disallowance of expenses of Advt Publicity and ₹ 25,136/- on account of disallowance u/s. 40(a)(ia) of interest paid to GET Capital TFS Ltd. Thereafter, the AO levied the penalty u/s. 271(1)(c) of the I.T. Act, 1961 vide order dated 28.3.2012 @100% amounting to ₹ 13,74,742/-. 3. Aggrieved with the penalty order, the assessee preferred an appeal before the Ld. CIT(A), who vide his impugned order 05.12.2013 dismissed the Appeal of the Assessee. 4. At the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st on assets on hire purchase on the ground that no TDS has been deducted on the aforesaid interest. Ground No. 2(a) of the assessee:- 3. Apropos above ground, we have heard arguments of both the sides and carefully perused the materials placed on the record of the Tribunal. The ld. Counsel for the assessee has drawn our attention to page 1 2 of the assessment order and contended that the A.O made disallowance and addition of ₹ 40,59,064/- for wall paintings and Pepsi logo paid to M/s Vision Images only on the basis that notice issued to this entity received with the remarks Left . The Ld. Counsel also pointed out that the CIT(A) dismissed claim of the assessee by taking a hyper technical approaches and without p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m should be allowed and addition may finding by deleted. To support above contentions the Ld. Counsel has placed reliance on the following orders of the Tribunal Hon ble Gujrat High Court:- a. Forte Point Construction P. Ltd 7 ITR 205 [2011] ITAT, Delhi b. ITO Vs. Hardrock Electric Engg Co. ITA No. 4955/Mum/2008, ITAT Mumbai c. CIT Vs. BMS Projects (P) Ltd 44 Taxmann.com 206 [2014] Gujarat High Court d. Amitabh Bachchan Corpn. Ltd VS. DCIT 56 Taxmann.com 77 [2015] [Mum-Tri] ITAT, Mumbai 5. Replying to the above, the Ld. Departmental Representative (DR) strongly supported the action of the A.O and contended that the CIT(A) after proper appreciation of facts upheld the order of the A.O on this issue which req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without bringing on any cogent evidence or allegation to show that the assessee shifted funds in the garb of fake bills by using Mr. Rajendra Kumar as conduit for making false claim. It is also not case of the CIT(A) that Mr. Rajendra Kumar and his payee firm is not in the business of advertisement and publicity and these bills are bogus and the assessee received the impugned amount of payment make from Mr. Rajendra Kumar and thus it is not allowable. We may point out that the lack of financial resources for conduct of business and major income or low income by the payee cannot be a basis for making disallowance as to basis of doubt only. The payee is a tax payer and if he left the earlier place of business then he may be called from new a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es on the issue of disallowance of ₹ 25,136/- representing the amount of interest paid by the assessee to M/s GE Capital TFL (H on hire purchase. 9. On careful consideration of the same we are of the considered opinion that as per CBDT, vide Instruction NO. 1425/CBDT dated 16/11/87 the amount of payment of interest are hire purchases cannot be characterized as interest payable and this provisions of Section 194A of the Act are not attracted in such transactions. Accordingly, we accept contentions of the Ld. Counsel of the assessee and there from, Ground No. 3 of the assessee is also allowed. 6.1 Keeping in view of the facts and circumstances of the case, we find that the additions on which the penalty in dispute was levied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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