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M/s. Condor Footwear (India) Ltd. Versus The DCIT, Circle-1, Surat

2015 (9) TMI 1286 - ITAT AHMEDABAD

Levy of penalty u/s.271(1)(c) - addition on account of adjustment u/s.145A with regard to difference in closing stock and unutilized MODVAT, disallowance of foreign travel expenses amounting to ₹ 1,35,750/- and disallowance to bonus payment to labourers - Held that:- So far as the imposition of penalty for addition made on account of adjustment u/s.145A of the Act and foreign travel expenses are concerned, the Coordinate Bench of this Tribunal has deleted the penalty in assessee's own case .....

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, JJ. For the Appellant : Shri H V Vora , AR For the Respondent : Shri P L Kureel , Sr. DR ORDER Per Shri Kul Bharat, Judicial Member This appeal by the Assessee is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-I, Surat ['CIT(A)' in short] dated 28/09/2011 pertaining to Assessment Year (AY) 2005-06. The Assessee has raised the following grounds of appeal:- 1) The learned CIT(A) grossly erred in confirming levy of penalty of ₹ 2,29,891/- u/s.271(1) (c) of .....

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VAT amounting to ₹ 1,94,760/-, disallowance of foreign travel expenses amounting to ₹ 1,35,750/- and disallowance to bonus payment to labourers amounting to ₹ 2,97,500/-. The AO on these additions also initiated the penalty proceedings u/s.271(1)(c) of the Act and subsequently imposed a penalty of ₹ 2,29,891/- vide order dated 26/03/2010. Against this, the assessee preferred an appeal before the ld.CIT(A), who after considering the submissions of the assessee, dismissed t .....

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of the present case, the authorities below were not justified in imposing the penalty and confirming the same. 3.1. On the contrary, ld.Sr.DR supported the orders of the authorities below and submitted that there is no dispute with regard to the fact that in quantum appeal, the disallowance in respect of foreign travel expenses has been sustained by the Tribunal. 3.2. In rejoinder, the ld.counsel for the assessee submitted that in respect of addition made on account of disallowance of bonus pay .....

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ree items; one item, i.e. the disallowance of foreign travel expenses has been confirmed by the Coordinate Bench in quantum appeal and addition made on account of disallowance of bonus payment to labourer of ₹ 2,97,500/- has been deleted in ITA No.2991/Ahd/2008 for AY 2005- 06 dated 02/11/2012. So far as the imposition of penalty for addition made on account of adjustment u/s.145A of the Act and foreign travel expenses are concerned, the Coordinate Bench of this Tribunal (ITAT "C" .....

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as under: "Accounts-Valuation of stock-Adjustment for excise duty, Modvat credit, etc.-To give effect to s. 145A, if there is a change in the closing stock as on 31st March, 1999, there must necessarily be a corresponding adjustment in the opening stock as on 1st April, 1998, and since no adjustment was made by the assessee in the P&L a/c for the year ending 31st March, 1998, no question of double deduction arises-Tribunal was correct in law in allowing the adjustment of ₹ 54,83, .....

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Hon'ble Apex Court cited by the Ld.AR in the case of Reliance Petro Products Pvt. Ltd. reported in 322 ITR 158 (S.C.), wherein it was held as under:- "A glance at the provisions of section 271(1)(c) of the I.T. Act 1961, suggests that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly the assessee must have furnished inaccurate particulars of his income. The meaning of the word 'particulars' used in section 271(1 .....

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urn must not be accurate, nor exact or correct, not according to the truth or erroneous - A mere making of a claim which is not sustainable in law, be itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars." 9.2 From the facts and circumstance of the case it is apparent that the assessee had not concealed any particulars of income or furnished inaccurate particulars .....

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s of ₹ 3,54,032/-:- During the course of assessment proceedings, the ld. A.O. disallowed an expenses of ₹ 3,54,032/- incurred by the assessee towards foreign tour expenses of Mr. Murli Adnani, who was neither a Director nor an employee of the company. The assessee had clarified that Mr. Murli Adnani was a promoter/shareholder of the company and had sourced many buyers/suppliers for the company. He was helping the company in its business and the company had incurred these travel expen .....

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made by the ld. AO disbelieving the assertion of the assessee. He prayed that in such circumstances, penalty may not be levied because the assessee has not concealed any income or furnished inaccurate particulars. 12. The ld. D.R. supported the orders of the Revenue and prayed that the assessee has incorrectly claimed expenses which were not permissible under the Act and therefore penalty levied on this addition may be sustained. 13. After hearing both the sides and carefully going through the r .....

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