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TMI Blog2012 (10) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... as not justified on facts and under the law in upholding the action of the Assessing Officer in levying penalty u/s. 271(1)(c) of the I.T. Act with reference to disallowance on foreign travel expenses of Rs. 7,31,363/-. Various observations made by the authorities below in their respective order on the above issue are either incorrect or are untenable. Facts stated, submissions made and the evidence produced before the authorities below were not appreciated properly. The case law relied upon by the authorities below in their respective orders were distinguishable on facts and had no application to the facts of appellant's case. ii) That without prejudice to ground no. (i), the penalty as sustained by the Ld. Commissioner of Income Tax (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidence only the bills for purchase of air tickets and foreign currency were submitted. The Assessing Officer mentioned that purchase of foreign currency was not an expenditure. No bills or vouchers for actual travelling expenses were furnished. In view of this the Assessing Officer required the assessee to show cause as to why expenditure on foreign travel should not be disallowed. Assessee responded in this regard that expenditure has been incurred for the purpose of business and Directors met several parties in those countries for betterment of business. Assessing Officer was not satisfied by this reply, he proceeded to disallow 50% of travelling expenses amounting to Rs. 7,31,363/-. 4.1 Upon appeal in quantum proceedings Ld. Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs visited foreign countries which was not fully for business purposes. Assessee's submissions in this regard is note worthy that both the wives, who were also Directors of the company were receiving considerable salary which was accepted year after year. Hence, the visits cannot be said to be for non-business purposes. It has further been noted that disallowance in this regard in the preceding year was only 20% and on that addition penalty was not imposed, even the penalty notice has been issued by the Assessing Officer. In this background, we have to see whether the penalty proceedings u/s. 271(1)(c) is sustainable or not. We find that section 271(1)(c) of the Act postulates imposition of penalty for furnishing of inaccurate particulars a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the statute." 9. We would also like to refer to the Hon'ble Apex Court decision in the case of CIT vs. Reliance Petro Products Ltd. in Civil Appeal No. 2463 of 2010. In this case vide order dated 17.3.2010 it has been held that the law laid down in the Dilip Sheroff case 291 ITR 519 (SC) as to the meaning of word 'concealment' and 'inaccurate' continues to be a good law because what was overruled in the Dharmender Textile case was only that part in Dilip Sheroff case where it was held that mensrea was a essential requirement of penalty u/s 271(1)(c). The Hon'ble Apex Court also observed that if the contention of the revenue is accepted then in case of every return where the claim is not accepted by the Assessing Officer for any reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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