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2015 (6) TMI 839 - AT - Income TaxPenalty u/s 271(1)(c) - disallowance of alleged fictitious payment of commission to various persons - Held that:- , it cannot be conclusively said that the employees of the assessee-company had arranged such accommodation entry and assessee was in dark up to the time when A.O. cornered the assessee. Rather the assessee was trying to justify by falling uncorroborated confirmations. Even if it is presumed that these employees were involved for such a bogus claim of fictitious payments, then the assessee was very well aware much before the scrutiny proceedings and at that time it should have come with a clean hand before the department. Under these facts and circumstances, we hold that the levy of penalty on the disallowance of ₹ 11 lakh has rightly been confirmed by the CIT(A). However it is noted that the A.O. has levied penalty of more than 200% of the tax sought to be evaded which in our opinion should be restricted to 100%. Accordingly, we hold that penalty should be levied at 100% of the tax sought to be evaded, which comes to ₹ 3,70,260. Thus, the penalty is reduced from ₹ 7,50,000 to ₹ 3,70,260 - Decided partly in favour of assessee.
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