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2014 (9) TMI 935 - AT - Income TaxDisallowance u/s 40(a)(ia) - non-deduction of TDS on freight & cartage - Penalty u/s 271(1)(c) - Held that:- On the additions related to ₹ 87,321/- u/s 68 on account of unconfirmed share capital and unsecured loan, the ld. AR pleaded that confirmations for only a miniscule part of the share capital and unsecured loan could not be submitted merely because the copies of FIRCs from the bank could not be procured due to paucity of time. He also submitted that there was no mens rea on assessee’s part, hence the penalty proceedings deserves to be dropped on these additions. We find that confirmation/evidence with regard to the share capital of ₹ 51,810/- against total share capital of ₹ 24,48,100/- and unsecured loans of ₹ 35,521/- against total loan of ₹ 35,23,925/- could not be filed due to paucity of time to procure the same. In view of these facts, we hold that only on meager amount, the assessee was not able to file the confirmations due to paucity of time. Therefore, in our considered view, no penalty u/s 271(1)(c) of the Act could be levied on such additions made to the income of the assessee, hence we order to delete the same. As regard to disallowance out of freight and cartage expenses for not deducing TDS, we hold that assessee was under statutorily obligation to deduct tax at source as per expressed provision of Section 194C of the Act as these were contractual payments. Assessee had not done so and claimed these expenses which are not deductible as per expressed provisions of Section 40(ia) of the Act. Assessee had claimed ex-facie not deductible expenses. In view of these findings, we hold that assessee is liable to levy penalty for claiming ex-facie not allowing expenses. By holding so, we find no fault in the levy of penalty on these additions.
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