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2015 (10) TMI 2745 - ITAT DELHIPenalty u/s 271(1)(c) - disallowance u/s 40(a)(i) - non-deduction of tax at source from the amount paid to M/s Maersk India Pvt. Ltd. on the basis of a Circular, as per which, the foreign shipping companies and their agents were governed by the provisions of Section 172 and not by Section 194C - Held that:- Imposition and confirmation of penalty u/s 271(1)(c) of the Act which presupposes concealment of income or furnishing of inaccurate particulars of income. Here is a case in which the assessee neither concealed any income nor furnished inaccurate particulars. Deduction on account of M/s Maersk India Pvt.Ltd. was claimed after making due payments. The dispute is only about deduction or non-deduction of tax at source from payments to M/s Maersk India Pvt.Ltd. for which disallowance has been made u/s 40(a)(ia) of the Act. Under no circumstance can such a disallowance be brought within the ambit of Section 271(1)(c) of the Act. The assessee made a proper disclosure about the expense claimed by it as deduction which was neither bogus nor otherwise non-deductible but for the application of Section 40(a)(ia) of the Act. Overturning the impugned order, order for the deletion of the instant penalty. - Decided in favour of assessee.
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