TMI Blog2015 (2) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... ant to notice that the provision itself is discretionary and the assessee is free to furnish the justification for a particular conduct - in the present case, of claiming certain expenditure. That ultimately such expenditure was disallowed on merits could not automatically result in the imposition of a penalty, akin to the AO's approach. Having regard to the materials placed on the record, which were analysed in detail and discussed, this Court is of the opinion that the reasoning and conclusions of the courts below being entirely facts based, do not involve determination of any substantial question of law. The appeal is, therefore, dismissed. - Decided in favour of assessee - ITA No. 1224/2011 - - - Dated:- 28-1-2015 - S. Ravindra Bhat And R. K. Gauba,JJ. For the Appellant : Mr Rohit Madan, Sr. Standing Counsel For the Respondents : Dr Rakesh Gupta Mr Mukul Mathur, Adv. JUDGMENT S. Ravindra Bhat, J. (Open Court) 1. The Revenue is aggrieved by the order of the Income Tax Appellate Tribunal (hereafter referred to as ITAT) dated 11.02.2011 upholding the Appellate Commissioner's direction to delete the penalty imposed upon the assessee, for furnishi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter as well as the confirmation from the payee i.e. STSAL. It also cannot be over looked that STSAL was a MNC at that point of time and this transaction stands confirmed by them. Thus, I find that the appellant has furnished prima facie justifiable explanation which stands supported by various documentary evidences as mentioned in the penalty order as well as in the submissions made by the ld. AR, as incorporated above. All these facts show that it is a case where a prima facie explanation has been given and all relevant facts and other information has been brought on record by the appellant. Thus, although additions may be sustained in quantum proceedings, it is not a fit case for invoking provisions of section 271(1)(c). Similarly, on the issue of payment of technical fees of ₹ 2,65,32,114/- to STSAL, the facts and circumstances are more or less similar. While commission has been claimed to have been paid for availing the services of STSAL for procuring the orders, the reason for paying that technical fees to STSAL is different. It is that STSAL was a MNC, being in the line of manufacturing of products of the same family in which the appellant was trading. As claimed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been made in this very year, and tax has been deducted at source and paid to the credit of the Government. In this year, Simoco was a company belonging to Phillips group, U.K. Thus, at the time of incurring the expenditure and payment thereof, there was no connection between the assessee and the payee. Simoco also furnished details of orders procured and services rendered in response to the notice issued by the AO. However, at the time of furnishing the reply, Simoco had been taken over by the assessee company. Simoco had also been carrying on the business similar to the business of the assessee. Both the payments made to the Simoco were disallowed by the AO. The disallowance has been confirmed even by Hon'ble Delhi High Court. The main reason for disallowance is that the assessee could not produce any correspondence between it and Simoco or Simoco and the buyers in regard to procuring sales orders or rendering services to the buyers. The test of human probabilities has been invoked for making the disallowance. 5.1 The AO has also levied penalty in respect of these disallowances. The penalty has been deleted by the ld. CIT(Appeals). The case of the ld. DR is that no further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced below:- It is of significance to note that the conceptual and contextual difference between section 271(1)(c) and section 276C of the Income-tax Act was lost sight of in Dilip N.Shroff's case [2007] 8 Scale 304 (SC). The Explanations appended to section 271(1)(c) of the Income-tax Act entirely indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing the return. The judgment in Dilip N. Shroff's case [2007] 8 Scale 304 (SC) has not considered the effect and relevance of section 276C of the Income-tax Act. The object behind the enactment of section 271(1)(c) read with the Explanations indicates that the said section has been enacted to provide for a remedy for loss of revenue. The penalty under that provision is a civil liability. Willful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under section 276C of the Income-tax Act. 5. Before us, learned counsel for the Revenue relied upon the decision of the Supreme Court in Commissioner of Income Tax, Delhi v. Atul Mohan Bindal, (2009) 9 SCC 589 and urged that to determine whether ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
