2015 (5) TMI 185

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..... A), dated 24-12-2012 for the assessment year 2004-05, in the matter of imposition of penalty of Rs. 3,18,500/- u/s.271(1)(c) of the I.T.Act. 2. Rival contentions have been heard and record perused. The AO imposed penalty u/s.271(1)(c) of the Act with respect to the disallowance on account of preliminary expenses written off amounting to Rs. 1,10,000/- and on account of bad debts writing off amoun .....

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..... in which the order of the CIT(A) is received by the Chief Commissioner of Income Tax, whichever is latter. 4. As per ld. AR in this case, the AO has not passed order u/s.271(1)(c) within one year from the end of the financial year in which the order of CIT(A) was received by the Commissioner. Accordingly, the order passed beyond the limitation period, has no legs to stand. 5. On the other hand, .....

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..... ved by Chief Commissioner, we do not find any merit in the contention of ld. AR that order so passed was barred by limitation. Accordingly, the additional ground raised by the assessee is dismissed. 7. Now, coming to the merit of the penalty imposed u/s.271(1)(c), we found that assessee was proportionately claiming preliminary expenses every year. During the year under consideration assessee has .....

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..... arlier years in the course of its business. However, since the advances were not recovered the same was written off as employees have left the job, which is clear from the page No.3 of the assessment order. However, the AO has disallowed assessee's claim of bad debts u/s.36(1)(viii) of the I.T.Act and levied penalty/s.271(1)(c) with reference to such disallowance. Similar issue has been dealt by t .....

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..... sallowance of bad debts written off on account of loan given to its subsidiary. 9. Respectfully following the proposition of law laid down by the Hon'ble Delhi High Court, we do not find any merit for levy of penalty in respect of writing off advances given to the employees which could not be recovered due to the fact that they had left the job 10. In the result, appeal of the assessee is allowe .....

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