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2016 (5) TMI 1247 - AT - Income TaxPenalty u/s. 271(1)(c) - Held that:- There is no dispute that assessee as well as his employer have been stating that this undisclosed income is in fact an expenditure limit allowed to be incurred to the respective employees. There is no evidence quoted in the shape of incriminating material or otherwise which could prove that assessee’s employer has not booked the corresponding sum as expenditure in its accounts maintained. The assessee’s case is that he has spent the impugned sums for the purpose of the business of his employer. He fails to substantiate the same. This has led to assessment of the impugned sum in his hands as undisclosed income. We reiterate that he already admitted the same as income before the Settlement Commission. The Revenue strongly draws support from this action. There can hardly be any dispute about the settled legal position that quantum and penalty proceedings stand on different footing and each and every addition of undisclosed income does not lead to imposition of penalty. The present case is an instance where assessee has not been able to substantiate his explanation of having spent the impugned expenditure limit for his employer company for the purpose of the business and also the Revenue has failed to refer to the employer’s books so as to negate the same by holding that the very sums have not been claimed as expenditure. We reiterate that this is a penalty case liable to be strictly interpreted. This factual position leads us to a conclusion that the authorities below have wrongly imposed the impugned penalty of ₹ 11,010/- u/s. 271(1)(c) of the Act. The same stands deleted - Decided in favour of assessee.
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