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TMI Blog2021 (7) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... een laid down by the Tribunal time and again in plethora of cases. Consequently, we do not have enough reason or do not find any infirmity in the order of the learned CIT(A) deleting the penalty under section 271(1)(c) of the Act imposed by the AO. Accordingly, the order of the learned CIT(A) is hereby upheld. The grounds raised by the Revenue are dismissed. - ITA no.3827/Mum./2019 - - - Dated:- 12-7-2021 - Shri Saktijit Dey, Judicial Member And Shri S. Rifaur Rahman, Accountant Member For the Assessee : None For the Revenue : Shri T.S. Khalsa ORDER PER S. RIFAUR RAHMAN, A.M. The captioned appeal has been filed by the Revenue challenging the impugned order dated 15th March 2019, passed by the learned Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the disallowance of direct expenses after the assessee failed to file the complete details with supportive documentary evidence. The assessee, being aggrieved by the orders passed by the Assessing Officer, went in appeal before the first appellate authority wherein the assessee contested the quantum disallowance made by the Assessing Officer. The learned CIT(A) confirmed the disallowance of ₹ 16,06,00,655, on account of disallowance of direct expenses. Since the disallowance so confirmed by the learned CIT(A), consequently, the Assessing Officer imposed penalty of ₹ 24,81,280, under section 271(1)(c) of the Act. 4. The assessee once again being aggrieved with the penalty order under section 271(1)(c) of the Act issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an addition being made to income of the taxpayer, for the reason that whether it is a civil liability or a criminal liability, penalty under s. 271(1)(c) can only come into play when the conditions laid down under that section are satisfied. In view of the elaborate discussions in the preceding paras. by no stretch of logic or rationale it could be said that imposition of penalty under S. 271(l)(c) has a cause and effect relationship with addition being made to the returned income per se. An addition being made to income does, because of impact of Expin.1 effectively raise a presumption against the assessee but that is an entirely rebuttable presumption and the scheme of rebuttal is provided in the Explanation itself. 6.3.4 Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not produce the confirmations from laborers the entire expenditure of ₹ 16.06 Cr cannot be treated as expenditure not incurred and wholly arid exclusively for the purpose of business when it is not in dispute of assessee carrying out the project work. Thus, it is seen that it is only due to the absence of the verification of bills and vouchers the correctness of that expenditure could not be verified, however, the appellant was in possession of vital evidence to prima facie substantiate the direct expenses to some extent. The appellant has offered an explanation, which could not be termed as not bona fide and the same was coupled with documentary evidence, however the same remained inconclusive 6.3.6 Thus, it can only be conclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer. 7. Having considered the submissions of the learned Departmental Representative and on a perusal of the material on record, we find that the Assessing Officer determined total income at ₹ 16,65,73,530, after making disallowance of ₹ 16,06,00,655. During the quantum proceedings, the learned CIT(A) confirmed the aforesaid quantum disallowance on account of direct expenses at ₹ 16,06,00,655. Aggrieved, the assessee carried the issue of quantum addition before the second appellate authority wherein the Tribunal vide order dated 30th June 2017, passed in assessee s appeal being ITA no.6566/Mum./ 2016, restricted the disallowance on account of direct expenses to 5% of ₹ 16,06,00,655, [i.e., ₹ 80,30,032 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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