9911796707
TMI Blog2019 (1) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... eld by the Hon’ble Apex Court in Reliance Petroproducts (P.) Ltd.(supra) will not automatically led to levy of penalty u/s. 271(1)(c). Furthermore, the view that section 43B is not attracted on service tax collected has been upheld by the Hon'ble Delhi High Court decision in the case of CIT vs. Noble & Hewitt (I) P. Ltd. [2007 (9) TMI 238 - DELHI HIGH COURT]. Hence, the penalty u/s. 271(1)(c) on this addition is also not sustainable. Due to absence of satisfaction and identification of the specific charge for levy of penalty, the penalty in this case deserves to be deleted on this account also. - Decided in favour of assessee. - ITA No. 277/Pan./2017 - - - Dated:- 3-1-2019 - Shri Shamim Yahya, AM And Shri Ram Lal Negi, JM For the Appellant : Shri Y. V. Raviraj For the Respondent : Shri Shrinivas Nayak ORDER PER SHAMIM YAHYA, A. M.: This is an appeal by the Revenue against the order of the learned Commissioner of Income Tax (Appeals) Panaji, dated 21.08.2017, wherein penalty u/s. 271(1)(c) of the Income Tax Act, 1961 ( the Act' for short) has been deleted for the assessment years 2009-10. 2. The grounds of appeal read as under: 1. The orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings, the company concealed particulars of income thereby attracting provisions of section 271(1)(c) of the Act. Hence, penalty proceedings initiated separately. 4. Thereafter, the assessing officer (A.O. for short) observed that after verification, the assessment is completed. Thereafter, the A.O. made the following additions: Total income returned 2,41,14,437 Addition as discussed above: 1 Undisclosed income 105 Acres Sagaraitirth / Temb 2,83,100 2 Undisclosed income Morave Hindle Village, Sindudurg (correctly it is disallowed u/s.43B on account of service tax) 1,75,386 3 Donations Disallowed 2,50,000 4 Difference of undisclosed income Rajendra Dewoo Naik 2,999 Total additions made 7,11,485 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the impugned notices issued on 28.12.2011 for assessment years 2007-08, 2008-09 and 2009-10 suffer from non-application of mind. Hence, the said notices issued for initiation of penalty proceedings u/s. 274 r.w s. 271 of the Act for levy of penalty u/s. 271(1)(c) of the Act for the said 3 A.Ys. are defective and issued without application of mind and hence, are invalid. Consequently, the orders levying penalty u/s. 271(1)(c) of the Act for the 3 assessment years 2007-08, 2008-09 and 2009-10 are invalid and liable to be cancelled. Accordingly, additional ground no.3 raised by the appellant for all the three assessment years 2007-08, 2008-09 and 2009-10 are allowed. 9. Against the above order, the Revenue is in appeal before us. 10. We have heard both the counsel and perused the records. We find that the addition in this case has two components: Income returned by the assessee ₹ 2,41,14,437/- Addition made by the A.O. ₹ 7,11,485/- Total ₹ 2,48,25,922/- 11. As regards the levy of penalty on the returned income of ₹ 2,41,14,437/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure- by way of sponsorship to religious and social gatherings in local areas in order to canvas the business. The assessee had incurred the above expenditure for religious gathering which is directly linked to the business of the assessee and is allowable u/s. 37(1) of the IT. Act, 1961. The amount pertains to the advertisement of the company, but the same has been wrongly classified as donations in the books of assessee. The payment is made by way of cross cheque and the same was towards the propagation of the companies activities in the function to be organized by the respective persons at their religious gatherings. The expenditure was incurred wholly and exclusively for the purpose of business of the assessee as the assessee has to promote the business in the local area in order to get new business deals. Hence, the expenditure incurred of ₹ 2,50,000/- was towards the business and has wrongly been disallowed by the AO. 14. Hence, the ld. CIT(A) was not satisfied and he held as under: 5.1 I have gone through the submissions of the appellant. The amounts spent by the appellant in favour of Shri Dev B. and Shri Vithoba Gopal Bagkar cannot be considered ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
