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TMI Blog2015 (12) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Income Tax (Appeals)-XXV has erred in upholding the penalty of Rs. 1,43,376/- levied u/s 271(1)(c) of Income Tax Act. While upholding the penalty the Learned CIT (Appeals) has failed to appreciate that mere disallowance of any expenditure can not be treated as a case of concealment." 3. Brief facts of the case are that the assessee firm had income from purchase and sale of medicines during the relevant assessment year. The quantum assessment in this case was completed on an income of Rs. 18,85,690/- as against the returned income of Rs. 5,23,500/- which was subsequently revised by the assessee enhancing it to Rs. 14,21,690/-. During the course of the original assessment proceedings, the AO came across certain interest bearing unsec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess. 3.2 Aggrieved, the assessee preferred an appeal before the CIT (A) who confirmed the penalty levied u/s 271(1)(c) of the Act as under :- "5. I have given a thoughtful consideration to the submissions made by the appellant, the facts on record and all the material aspects having a bearing on the penalty order dated 12/03/2013. As regards the first ground of appeal, it is of general nature, hence no comments. As regards the other ground of appeal that the assessee did not furnish any false return, the lengthy submission furnished by the assessee during the course of appellate proceedings was carefully gone through by me. The case laws cited by the assessee were perused. The facts of all the cases relied on by the assessee were not i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position of law i.e. section 36(1)(iii) of the Income Tax Act, 1961 being clear, there was not any occasion for difference of opinion. It is true that the assessees have generally very limited knowledge of the Income Tax Act and it is the tax auditors or the accountants who refine and give the finishing touches to the accounts submitted to them by the former for audit etc. as per the provisions of the Income Tax Act, 1961, but the fact cannot be ignored that the assessees are the masters of the facts/ business affairs in as much as they are the ones who actually conduct the business. Hence, it was the appellant's duty to assist and advise the auditors on this aspect of the business. In the instant case, the claim of interest expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee, cannot be a ground for levy of penalty and accordingly, pleaded to delete the penalty. 6. On the other hand, ld. DR relied on the orders of the authorities below. 7. We have heard both the parties and have perused the records. We find that the assessee has borrowed capital for the purpose of business and has paid interest to the lenders from whom money has been borrowed. The assessing authority rejected part of the claim of interest for the reason that the assessee had not charged any interest from certain parties when the assessee was paying interest on loans raised by them. We find that the quantum appeal of the assessee has been dismissed by the ld. CIT (A). However, the assessee/appellant did not prefer to file an ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that the claim made by the assessee is not a false claim. At best, it can be termed as a wrong claim, though the genuineness of the expenditure has not been suspected by the AO. So when the expenditure made by the assessee which was claimed as an allowable expenditure when disallowed by the AO cannot be termed as concealment or providing inaccurate particulars. Even if assessee firm engages assistance of tax consultants and then for the mistake of tax consultants, the assessee cannot be penalized. In the light of the above facts, we find that the instant case does not merit penalty to be levied against it. Therefore, we are inclined to delete the penalty levied against the assessee. 8. In the result, the appeal of the assessee is all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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