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TMI Blog2019 (6) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... because said claim of the assessee was disallowed u/s.40(a)(ia) as assessee failed to deduct TDS thereon. Undisclosed sales as reflected in Form 26AS - in the case of Berger Paints ltd., said income was accounted for in financial year 2003-04 and in the case of Hindustan Unilever Ltd., the amount was written off as discount and tax was deducted on such amount erroneously. Therefore, in our view, the assessee has explained the above difference in the receipts as per the details submitted before the authorities below and the details noted in 26AS. It is well settled law that quantum and penalty proceedings are independent and distinct proceedings. Even if the addition is agreed by the assessee and if the assessee is able to explain th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was addition on account of non-deduction of tax under section 40(a)(ia) and such addition was procedural in nature. 2. On the facts of the case, the AO erred in levying and ld CIT(A) in confirming on a sum of ₹ 7,64,520/- on account of undisclosed sales on the basis of Form 26AS. 3. Briefly stated the facts of the case are that the assessee is in the business of ad films and release of same in media. The Assessing Officer completed the assessment u/s.143(3) of the I.T.Act, inter alia, making various additions/disallowances. On appeal, the CIT(A) partly allowed the appeal of the assessee by upholding the additions made under section 40(a)(ia) of the Act of ₹ 16,97,627/- and on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tax was paid in the year 2012-13 and was claimed as expenses in that year. With regard to addition on account of undisclosed sales as reflected in Form 26AS, ld A.R. submitted that in the case of M/s. Berger Paints Ltd.,., said amount was accounted for in financial year 2003-04 and in case of M/s. Hindustan Unilever Ltd., on such amount erroneously. Ld A.R. also submitted that the penalty proceedings are separate from the assessment proceedings and all additions are not liable for penalty. Ld A.R. also referred the following decisions for the proposition that if there is disallowance u/s.40(a)(ia), no penalty u/s.271(1)(c) can be levied. 1 Atul Shamji Bharani HUF ITA No. 6380/MUM/2013 Dt 12.04.2017 (Mumbai A Bench) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the department. Therefore, it cannot be said that assessee has claimed expenses which are false or not genuine. The assessee has furnished all the relevant facts concerning the claim made by it in the return filed. The AO has levied penalty in respect of said amount merely because said claim of the assessee was disallowed u/s.40(a)(ia) of the Act as assessee failed to deduct TDS thereon. 10. Similarly, as regards to penalty made on account of undisclosed sales as reflected in Form 26AS, it is the contention of the assessee that in the case of Berger Paints ltd., said income was accounted for in financial year 2003-04 and in the case of Hindustan Unilever Ltd., the amount was written off as discount a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal after examining the entire material on record that the CIT(A) had rightly cancelled the penalty against the assessee. It was further recorded that the assessee made a bonafide claim of deduction of the expenditure and even though it was not acceptable to the revenue would not lead to the conclusion that the assessee had concealed the particulars of income or filed inaccurate particulars of income. 12. As regards to the penalty made u/s.271(1)(c) for the unaccounted sales reflected in Form 26AS, we find that in the case of Berger Paints ltd., said income was accounted for in financial year 2003-04 and in the case of Hindustan Unilever Ltd., the amount was written off as discount and tax was dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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