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2013 (10) TMI 870 - ITAT HYDERABADPenalty u/s 271(1)(c) of the Income Tax Act for disallowance of entire commission payments made in the quantum proceedings by the Assessing Officer – Held that:- Disallowance out of commission payments sustained by the Tribunal is merely by estimation of the excess amount of expenditure which the assessee might have been claimed by the assessee, and further, since such disallowance has been made on the basis of the material furnished by the assessee itself and already available on record, this is not a fit case for imposition of the penalty under S.271(1)(c) of the Act - Further, unless the claim of the assessee was proved to be bogus or that any amount was received back by the assessee, the disallowance of the expenditure by itself, cannot be a reason for levy of penalty. The addition is only on account of difference in estimation of expenditure liable for disallowance made by the Assessing Officer and the Tribunal, and the claim of the assessee itself was not found to be bogus. The Assessing Officer could not prove that there was willful or gross negligence on the part of the assessee, resulting thereby either in concealment of income or furnishing inaccurate particulars of income. As per Allahabad High Court in the case of CIT V/s. K.L. Mangal Sain[1974 (5) TMI 6 - ALLAHABAD High Court], when the Assessing Officer is not able to prove that the assessee was guilty of fraud or gross or willful negligence, penalty cannot be sustained - Considering totality of facts and circumstances of the case on hand, this is not a fit case for levy of penalty – Decided in favor of Assessee.
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