TMI Blog2013 (11) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... he lump sum disallowance was made on estimate basis which cannot be a reason for levy of penalty. The AO could not point out which item of expenditure was not verifiable. Had the AO pinpointed the particular expenditure that is not verifiable then the case will be different. The Assessing Officer without examining the recipients of the payments, it is not appropriate to come to the conclusion that the assessee has concealed any particulars of income or furnished inaccurate particulars of income. The penalty proceedings are quasi criminal proceedings and the consideration that arise in penalty proceedings are different from those arising in the assessment proceedings. Though the finding given in the assessment order is a good finding, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case are that there is only one issue in appeal relating to imposition of penalty u/s. 271(1)(c) of the Income-tax Act, 1961 amounting to Rs. 33,49,763. The assessee-company is in the business of manufacture of pipes for water supply and sewerage. The assessment was completed on 31st March 2006 u/s. 143(3) of the Act by making the following additions: (a) Addition with respect to depreciation claim amounting to Rs. 41,15,000. (b) Addition with respect to unvouched expenditure amounting to Rs. 50,00,000. 5. The Assessing Officer for the A.Y. 2006-07 made an addition of Rs. 50 lakhs towards unvouched expenditure in respect of jointing, labour, supervision charges, site preparation, etc. He also made addition at Rs. 41.15 lakhs by di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f concealment of income and also it cannot be said that the assessee has furnished inaccurate particulars of income. The assessee claimed depreciation on plant and machinery taken on lease from M/s. IVRCL. It is on the basis of lease agreement entered by the assessee on 30th March, 2001 with M/s. IVRCL. It is in consonance with the agreement. However, the Tribunal not agreed with the contention of the assessee's counsel in its appeal in quantum addition. The facts remain that the assessee is having bona-fide belief that it is entitled for depreciation as per the lease agreement and the assets have been duly reflected in the Balance Sheet. The assessee has furnished the entire facts relating to this issue which was not found favourable with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated 30.8.2013 confirmed the deletion of penalty by CIT(A) by holding as follows: "34. Regarding levy of penalty on ad-hoc disallowance of expenses like jointing, labour, supervision charges, site preparation, etc., this was disallowed on the reason that the expenditure was not properly vouched and the disallowance of expenditure is on ad-hoc basis. There is no conclusive proof that the assessee has furnished inaccurate particulars of income or concealed the particulars of income. The assessee was not able to file all vouchers and bills and that led to disallowance and the lump sum disallowance was made on estimate basis which cannot be a reason for levy of penalty. The AO could not point out which item of expenditure was not verifia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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