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TMI Blog2014 (2) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee, we condone the delay in fling the appeal and accordingly admit the appeal for hearing. 4 The solitary issue urged in this appeal relates to penalty of Rs.1,95,064/- levied by the AO u/s 271(1)( c) of the Act, which has been confirmed by the ld CIT(A). 5 The facts that led to levy of penalty u/s 271(1)( c) are discussed in brief. The assessee is a partnership firm engaged in the business of export of stainless steel utensils to Middle East and South African countries. The return of income filed by the assessee for the year under consideration was taken for scrutiny by the AO. It was noticed that the assessee has claimed travelling expenditure of a foreign travel undertaken by one of its partners named Mr Mukesh Mehta and anoth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a partner of the firm, since Shri Jayanti Mehta had got 25 years of vast experience and also he was well aware of the market trend of the products and further he has got good customer contacts. He further submitted that the AO has disallowed the travel expenses only by disbelieving the claim made by the assessee. The Ld A.R further submitted that the AO has worked out the disallowance by making certain estimates, i.e., with regard the dollar currency expenses, the AO has taken the portion attributable to Mr. Jayanti Mehta at 50% on estimated basis. Accordingly, the Ld A.R submitted that the estimated disallowances are not exigible for penalty u/s 271(1)(c) of the Act. The Ld A.R further placed reliance on the decision of the Hon'ble Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tacts. It is evident from the above that the travelling expenses were incurred wholly and exclusively for the business purpose of the appellant firm. Necessary evidence for travelling of Mr. Jayanti Mehta were filed before the AO during the assessment proceedings. 4.2. I have considered the facts of the case and the arguments of the appellant as outlined above and in my considered opinion, there is no substance in the above arguments. It is an admitted fact that Mr. Jayanti Mehta is neither an employee nor in any way connected with the business operations of the appellant firm. Any expenses incurred by the firm are allowable only when it is proved beyond doubt that the same have been incurred exclusively and wholly for the purposes of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounting to Rs.1,95,064/- is hereby confirmed." 9. We notice that the assessee did not furnish any explanation to the satisfaction of the AO during the course of penalty proceedings. Further, the assessee has also failed, both during the course of assessment proceedings as well as in the penalty proceedings to substantiate its claim that the travelling expenses of Mr. Jayanti mehta was incurred for business purposes. The claim of experience, knowledge of business trend, availability of business contacts were found to be mere oral submissions made without bringing any material to substantiate the said claim. Further the benefits that were expected to accrue to the assessee from incurring of travel expenses of Mr. Jayanti Mehta was not brough ..... X X X X Extracts X X X X X X X X Extracts X X X X
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