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TMI Blog2019 (5) TMI 1270X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. In the case of CIT (A) Vs. Reliance Petro Products Pvt. Ltd. . [ 2010 (3) TMI 80 - SUPREME COURT] has held that merely because the assessee has claimed the expenditure which claim was not acceptable or was not accepted by the revenue that by itself could not attract the penalty u/s 271(1)(c) - merely because the assessee in the instant case, has accepted the disallowance during the course of assessment proceedings that by itself will not preclude the assessee from taking an alternate argument before the Tribunal during penalty proceedings. Since full particulars are available before the A.O during the course of assessment proceedings, therefore, penalty u/s 271(1)(c) in my opinion is not attracted on motor car expenses and depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name of the Company, the A.O asked the assessee to explain as to why these expenses should not be disallowed. The assessee agreed for the above disallowance for which the A.O made the addition of ₹ 2,51,941/. Similarly, out of total business promotion expenses of ₹ 10,23,919/-, the A.O disallowed an amount of ₹ 1,02,392/- on ad-hoc basis @ 10% of such expenses on the ground that the assessee failed to justify with documentary evidence regarding the claim of such expenses for the purpose of business. 4. The assessee did not challenge the above additions. The A.O initiated penalty proceedings u/s 271(1)(c) of the Income Tax Act. Rejecting the various explanations given by the assessee, the A.O levied penalty of ₹ 82, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and upheld the penalty levied by the A.O u/s 271(1)(c) of the I.T Act. 7. Aggrieved of such order of the CIT (A), the assessee is in appeal before the Tribunal. 8. I have considered the rival arguments made by both the sides and perused the material available on record. It is an admitted fact that the assessee during the course of assessment proceedings has agreed for the addition of the motor car expenses, depreciation and interest on such loan totaling to ₹ 2,51,941/-. Further, the A.O has made another addition of ₹ 1,02,392/- on account of ad-hoc disallowance of business promotion expenses being 10% of the total expenditure for which the assessee is not in appeal. I find assessee during the course of assessment p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the A.O during the course of assessment proceedings, therefore, penalty u/s 271(1)(c) in my opinion is not attracted on motor car expenses and depreciation of ₹ 2,51,941/-. 9. So far as the other addition is concerned, i.e. disallowance of ad-hoc expenses of ₹ 1,02,392 out of the business promotion expenditure, I find, the same is on ad-hoc basis. It has been held in various decisions that penalty u/s 271(1)(c) of the I.T Act is not sustainable on ad-hoc disallowance of expenses. In view of the above discussion, I am of the considered opinion that it is not a fit case for levy of penalty u/s 271(1) (c) of the I.T Act. The grounds raised by the assessee are accordingly allowed. 10. In the result, the appeal filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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