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2021 (10) TMI 221 - AT - Income TaxWithdrawal of appeal - summary dismissal of its' appeals inasmuch as these are claimed to have not been withdrawn, i.e., contrary to what stands stated in the impugned orders, and which forms the basis of the said summary dismissal - HELD THAT:- An actual withdrawal, where so, only implies that the assessee has misled this Tribunal. The affidavit dated 19/7/2021 furnished by the assessee during the course of hearing is non-committal and in vague terms. Also, the letter dated 20/6/2012 supra, having been furnished with the office of the ld. CIT(A) after the closure of the hearing and, in fact, the passing of the impugned orders on 26/6/2012, though included therein, cannot, strictly speaking, form part of the paper-book by the assessee. Sure, the Revenue ought to have presented its' case before the Tribunal properly, but not doing so would not mean an abrogation of its' rights or that a misrepresentation by the assessee would be allowed to prevail. Clearly, though, the withdrawal of an appeal on the basis that its' Grounds be considered as part of the other appeal, not withdrawn, is no withdrawal at all. Ad hoc disallowance of the expenditure on Conveyance, Travelling, Boarding & Lodging, Site Expenses, and Telephone - HELD THAT:- Disallowance of the said expenses is purely arbitrary and not preceded by or based on any finding by the AO in their respect. This is found correct, with the ld. Sr. DR failing to rebut the same. There is as such no factual basis for the said disallowances, i.e., other than of the conveyance expenditure, and are therefore directed to be deleted. As regards the disallowance of conveyance expenditure, the AO is clear and definite in his finding in the matter, based on an examination of the material before him, and which has not been rebutted in any manner, i.e., including as to its quantum and, at any stage, including before me. The same is accordingly upheld. The powers of the assessing authority in the matter of assessment are plenary and, two, estimation is integral to assessment. The same is accordingly upheld, and the assessee gets part relief. Initiation of the reassessment proceedings - Disallowance of commission expenditure - HELD THAT:- When Ms. Divya Shah, the stated proprietor of KTC, to whom commission, against services rendered, has been admittedly allowed by the assessee, states that she is not doing any business, it raises serious doubts as to the genuineness of the commission expenditure claimed by the assessee in respect of the said firm inasmuch as the proprietor denies being in business, so that there could be no provision of any services to the assessee, or to any other for that matter. However, when she later denies being the proprietor of KTC through a written reply furnished in the reassessment proceedings, her statement, which led to the reason to believe escapement of income in respect of the expenditure allowed by the assessee to her firm, is lost. Of what value, one may ask, is her statement when she, as it transpires subsequently, is not the proprietor of KTC? Her denying doing any business herself becomes consequential to her stating to be not the proprietor of KTC, also clarifying thus to be not engaged in any other business. The rationale and live nexus between her said statement, i.e., the tangible material and information with the AO, and the reason to believe under-assessment, obtains no longer. That is, there is no reason to believe so. Levy of penalty u/s. 271(1)(c) qua the disallowance of commission expenditure allowed by the assessee to KTC, is rendered consequential in view of the unmaintainability in law of the said disallowance and, in fact, of the assessment. The same is accordingly allowed
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