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2012 (11) TMI 937 - ITAT MUMBAIPenalty u/s 271(1)( c) – diversion/shifting of expenses of sister concern to the assessee - travelling expenses and business promotion expenses – Held that:- Expenditure disallowed represents the expenses debited by the assessee company in its account books with regard to the tours undertaken by the directors of the group companies of the assessee and it is an admitted fact that the disallowed expenses were not incurred by the assessee company for its business purposes - assessee could not explain any valid reason for debiting the expenses incurred by the directors of the other companies for the business purpose of the group companies and which do not relate to the business of the assessee company - assessee has not controverted the facts of payments of the expenses by credit card of the persons, who are not the director of the assessee company - it is a case of diversion/shifting of expenses of sister concern to the assessee with a view to reduce the tax liability. The act of the assessee in claiming the said expenditure shows dis-honest motive and therefore, attracts the penal provisions of sec. 271(1)( c) of the IT Act
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