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2024 (3) TMI 303 - AT - Income TaxPenalty u/s 271(1)(c) - disallowances in the quantum assessment order - whether any concealment or furnishing of inaccurate particulars proved? - Disallowance under section 40(a)(ia) on commission expenses - HELD THAT:- We find that the coordinate bench of the Tribunal in assessee’s quantum appeal in Marvel Drugs Pvt. Ltd for the assessment year 2006-07, deleted the aforesaid disallowance. Thus, since the addition has been deleted by the coordinate bench in the quantum proceedings, we find no basis in sustaining the penalty in relation to the aforesaid disallowance. Accordingly, the same is directed to be deleted. Penalty levied in relation to unexplained investment in capital work in progress and in relation to capital expenditure claimed as Revenue expenses - AR submitted that the impugned additions are arising on account of the reconciliation of certain details pertaining to M/s JAES Construction, through whom the assessee claims to have carried out work in progress at its Taloja factory site - As submitted that pursuant to remand by the coordinate bench, the issue is still under consideration before the learned CIT(A) and no order has been passed till date. Accordingly, we deem it appropriate to restore the issue of levy of penalty in respect of the aforesaid additions to the file of the learned CIT(A). Penalty levied in relation to Foreign travelling expenses and commission and brokerage paid to foreign agent - It is an admitted position that in the quantum appeal before the Tribunal, the assessee did not press its ground challenging the aforesaid addition. During the hearing, no material was brought on record to controvert the findings of the AO that the expenditure incurred on foreign tours of the family members is wholly and exclusively for the purpose of the business of the assessee. Accordingly, we find no infirmity in the findings of the learned CIT(A), vide impugned order, in upholding the penalty in relation to the aforesaid addition. Validity of the penalty order due to not striking off one of the limbs while initiating the penalty under section 271(1)(c) - From the perusal of the notice issued u/s 274 r/w section 271 we find that the AO has placed the tick against the option “have concealed the particulars of your income”. Since the assessee was duly put to notice under section 274 about the basis of initiating penalty proceedings under section 271(1)(c) of the Act, we are of the considered view that no prejudice has been caused to the assessee and there is no violation of the principles of natural justice. As a result, ground raised in assessee’s appeal is dismissed.
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