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2017 (2) TMI 28 - AT - Income TaxLevy of penalty u/s 271(1)(c) - disallowance of expenses of foreign Travel expenses and inter city travel expenses - distinction between set of facts “not proved” and facts disproved and facts proved - Held that:- Inquiry must proceed from the stage the alleged disclosure has taken place and not stop at that stage and close the inquiry at the threshold on the abstract principle that mere rejection of explanation does not result into levy of penalty. In the present case also the Revenue has no where proved the allegation of concealment despite explanation offered by the assessee. The AO has made disallowance of foreign travel expenses and local travel expenses merely on the basis of non-business purposes without making any enquiry. The assessee produced complete details i.e. the bills and vouchers relating to expenses incurred on foreign travelling and local travelling and claimed by the assessee for business purposes. The actual position in law is that merely because the assessee’s addition has been confirmed, that cannot automatically bring in levy of penalty for concealment. If the assessee offers an explanation, the Revenue authorities have to consider the acceptability of the explanation and pass necessary orders. In the present case, the Revenue has not rejected the explanation of the assessee and merely levied the penalty on the basis that the expenses are for non-business purposes. In term of the above discussion and facts of the case, we delete the penalty - Decided in favour of assessee
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