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2016 (3) TMI 866 - AT - Income TaxPenalty levied under section 271(1)(c) - disallowance of expenditure - Held that:- Other than particulars furnished by the assessee in the return of income, the Revenue does not have any other material to substantiate that the assessee has concealed the particulars. It is established law that not all additions would justify penalty as a matter of course. But addition is the basis for penalty. Mere admission does not justify penalty even in the light of the Explanation to section 271(1)(c) of the Act in view of the judgement in the case of CIT vs. Saran Khandsari Sugar Works (1999 (9) TMI 15 - ALLAHABAD High Court). In the instant case, the penalty order passed by the Assessingus we are of the opinion that levy of penalty is not warranted in the present case and accordingly, we delete the penalty levied by the Assessing Officer Officer is purely based on the assessment made under section 143(3) of the Act. Thus incurring expenditures during the course of business by the assessee was not rejected by the Assessing Officer, but the assessee could not file any valid evidence for claiming the expenditure before the Assessing Officer and therefore by disallowing 80% of the claim, the Assessing Officer has allowed 20% of expenditure attributable to earn the business income. Thus we are of the opinion that levy of penalty is not warranted in the present case and accordingly, we delete the penalty levied by the Assessing Officer - Decided in favour of assessee
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