9911796707
TMI Blog1977 (11) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... ,96,048 which was subsequently reduced in appeal to Rs. 2,52,062. The total income was computed after disallowing Rs. 53,035 claimed by the assessee as sales promotion expenses. On enquiries by the ITO it was found that these expenses were not supported by any receipts of the payees. Only internal vouchers signed by the assessee's sales Representative were available. Holding that "the assessee had failed to discharge its onus of proving that this expenditure was properly made", the ITO disallowed the claim and initiated proceedings for levy of penalty for concealment of income. These proceedings were referred to the IAC, Kanpur. 3. In response to the notice issued by the IAC, the assessee claimed that it had not concealed any income. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not possible to obtain receipts from those persons and the assessee could only have internal vouchers prepared by its sales Representative. Similar payments had been made in the preceding year also. The claim for payment was disallowed in that year for the same reasons but the penalty proceedings initiated in that year were dropped by the IAC. It was, therefore, unfair to levy penalty for concealment in this year. The assessee's claim had been disbelieved by the ITO but there was no evidence to show that it was false. The payment of such commission was customary in this line of business. Shri Jain supported his contention by referring to the P&L a/c Dinkar Chemicals, Kanpur and the Standard Chemical Co. (P) Ltd., both of which showed p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty order should be confirmed. 5. Ignoring the return filed by the assessee of 26th July, 1968 which has been held to be a invalid return, the return filed by the assessee showed income of Rs. 87,839 after set-off of past losses of Rs. 1,50,952. If this deduction on account of past losses is ignored the return filed by the assessee showed income of Rs. 2,38,791 for this year. The assessment has been completed on an income of Rs. 2,52,026 explanation to s. 271(1) is therefore, not applicable nor has thus been referred to by the IAC. The decision in the case of Swatantra Confectionery Works (1974) UPTC 485 which was also referred to by Shri Hasan has, therefore, no application. The justifiability of the levy of this penalty has therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same and a different treatment as not warranted. The sales of the assessee had increased substantially and its claim that this increase was as a result of these expenses cannot be entirely rejected. Such payments are not unknown in business. These payments are claimed to have been made to the various employees or persons connected with Rohtas Industries Ltd. and Shri Gopal Paper Mills and, therefore, replies received from these companies denying the receipt of any such commission have re-relevance. Keeping all these facts in view we are unable to hold that the charge of concealment is proved against the assessee. 8. The decision on the case of D.M. Manasvi has no application in view of our above mentioned finding. In that case it had b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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