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2015 (10) TMI 2674 - ITAT DELHIPenalty u/s 271(1)(c) - disallowance of foreign traveling expenses - Held that:- Penalty u/s 271(1)(c) of the Act can be imposed only when the assessee has concealed income or furnished inaccurate particulars of income. Where a deduction is claimed after making a proper disclosure, the mere fact that the disallowance has been made for a part of such deduction, it cannot be construed as a case covered u/s 271(1)(c) of the Act. CIT Vs. Reliance Petroproducts Pvt. Ltd. (2010 (3) TMI 80 - SUPREME COURT) has held that no penalty can be imposed where a proper disclosure is made but the disallowance has been made by the Assessing Officer. In considered opinion, the learned CIT(A) was justified in not upholding penalty on this amount of disallowance. Disallowance u/s 14A r.w.r 8D - Held that:- There cannot be any disallowance u/s 14A if there is no exempt income. As confronted with a situation in which the assessee has not earned any exempt income but the disallowance has been made to the extent of ₹ 13.64 lakh by applying Rule 8D. Despite there being no challenge to or sustenance of the disallowance u/s 14A, it is of considered opinion that under no circumstance, such ill founded disallowance, not having any authority of law to stand on, can be considered for the purposes of imposition of penalty u/s 271(1)(c) of the Act. Therefore, approve the view taken by the learned CIT(A) on this score. Disallowance of credit card expenses - Held that:- This disallowance was made by the Assessing Officer on ad-hoc basis which fact is borne out from the assessment order itself. There is hardly any need to highlight that no penalty can be imposed where the disallowance of expenses has been made on an ad-hoc basis. Therefore, hold that the learned CIT(A) was justified in deleting the penalty on this account as well. Decided against revenue.
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