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TMI Blog2018 (3) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... t of disallowance of part of travelling expenses. - Decided in favour of assessee. - ITA No.5168/Mum/2015 And 5169/Mum/2015 - - - Dated:- 19-3-2018 - SHRI R.C.SHARMA, AM For The Assessee : Shri. Y.P.Trivedi Ms. Usha Dalal For The Revenue : Shri V. Vidyadhar ORDER PER R.C.SHARMA (A.M): These are the appeals filed by assessee against the order of CIT(A)-16, Mumbai dated 14/08/2015 for A.Y.1997-98 and 2003-04, in the matter of imposition of penalty u/s.271(1)(c) of the IT Act. 2. At the outset, learned AR placed on record, the quantum order of the Tribunal for the A.Y.1997-98 wherein addition on the basis of which penalty so imposed had been deleted by the Tribunal itself vide order dated 25/08/2016. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material has been off ered for taxation, then no additions be made in respect of the said value of ₹ 33,25,027/-. The action of the Ld. CIT(A) in deleting the remaining additions is upheld. 4. As the addition itself on which penalty has been imposed u/s.271(1)(c) vide order dated 28/03/2013, the penalty so levied has no legs to stand. 5. In view of the above discussion, we delete the penalty so imposed u/s.271(1)(c) with respect to addition of ₹ 33,25,027/-. 6. In the assessment year 2003-04, penalty was levied for partly disallowing foreign travelling expenses alleged to be incurred on account of personal enjoyment. 7. It was argued by learned AR that similar travelling expenses were incurred in earlier and subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of more than 23 models of different complexity and sales quantity. The assessee had also provided statement of export sales for financial year 2002-03 in respect of each of the models. The principle customers of the assessee from whom the orders are generated include Hewlett Packard, Cisco Systems, Foundry Networks, Brocade Communications and Riverstone Networks. We also observe that these customers are public companies located in USA and renowned companies in their fields. The business of the assessee and its turnover depends on orders generated from these customers and to secure business from these customers, extensive direct contact on a regular basis is necessary. We found that the immediate customer of the assessee - QCS, is located ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure incurred by it was for the purpose of business and also held that the expenditure is incurred for personal purpose also. The AO mentioned that the tours of the appellant are for an abnormally long period and such long tours can only be for medical reasons or for holiday trips. Accordingly, AO disallowed the part of the part of travelling expenditure and also levied penalty u/s.271(1)(c). However, the addition so made by the AO was confirmed by the CIT(A) and also by Tribunal, but merely confirming part of disallowance does not automatically leads to levy of penalty u/s.271(1)(c). As per our considered view, the penalty proceedings and quantum proceedings are independent of each other and therefore levy of penalty is not mandatory in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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