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TMI Blog2013 (7) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in law and on facts in confirming penalty levied by the AO u/s 271(1) (c) of the Act treating the assessee in default for furnishing inaccurate particulars in respect of claim of consultancy charges paid after duly deducting tax at source. Ld. CIT(A) erred in not appreciating the fact that the claim of deduction disallowed in quantum proceedings simply due to non production of payee despite relevant facts on record, does not amount to furnishing inaccurate particulars or concealment of income. The penalty levied being without any justification ought to be quashed." 3. The facts of the case are that the assessee firm filed its return of income for the assessment year 2007-08 declaring total income of Rs.45,26,450/- on 20-10-2007. The c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that since the matter involved is a mere disallowance of expenditure, no penalty is attracted in view of decision of Hon'ble Apex Court in Reliance Petro Products supra. It is however, seen that the same is not correct. Hon'ble Delhi High Court in the case of Zoom Communication Pvt. Ltd. supra, have held that so far as the appellant disclosed before the AO all the material on the basis of which admissibility of an expenditure can be examined, the ratio laid down by Apex Court would apply however if such material is not made available to the A O then the ratio would not apply. In the instant case, the appellant had not disclosed the requisite material before the A O and hence the claim of the appellant, by no stretch of imagination falls in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) of the Act and, therefore, penalty was clearly attracted. 4. We have heard the rival submission and carefully perused the orders of the authorities below. We find that assessee's quantum appeal in ITA No.3121/Ahd/2010 has been decided by the ITAT Ahmedabad Bench vide order dated 21-07-2011 for the assessment year 2007-08 against the assessee and in favour of the revenue by upholding the orders of the revenue. The relevant portion of the said order of the Tribunal is reproduced herein under for reference:- "3. On ground No.1, the assessee challenged the confirming of disallowance of Rs.2,83,942/-. In the assessment order, the AO has stated the assessee has made payment of consultancy charges to Super Consultancy Services. The AO has sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the account and all the payments were subjected to TDS. With regard to TDS, the learned CIT(A) directed the AO to verify the same. However, with regard to allowability of the expenses, the learned CIT(A) noted that simply giving ledger account, copy of PA Number and the payments made through cheques does not prove that the payment is genuine and spent wholly and exclusively for the purpose of business. The assessee has not given any evidence of any services rendered by this party. In the absence of any evidence on record, the learned CIT(A) noted that the assessee failed to prove as to what services have been rendered by these parties for the business purpose of the assessee. Addition was accordingly confirmed. 4. The learned Counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned CIT(A), therefore, rightly noted that by filing these papers would not prove that payment in question is genuine and was spent wholly sand exclusively for the purpose of business of the assessee. The assessee claimed that it procures yearn from various suppliers and the same are supplied to Mafatlal Industries Ltd. Therefore, services of Super Consultancy Services and Super Testing Laboratory were obtained to find out the standard quality of yarn. It would, therefore, prove that the assessee got the yarn tested prior to supply to Mafatlal Industries Ltd. The assessee failed to submit any test report either before the authorities below or before the Tribunal. In the absence of any evidence of testing of yearn by this Consultancy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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