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Silver Shield Energy Private Limited Versus Income Tax Officer 2 (3) -2, Mumbai

2016 (2) TMI 345 - ITAT MUMBAI

Penalty under section 271(1)(c) - addition of foreign travel expenses - Held that:- There is no finding by the authorities below that the details furnished by the assessee were found to be incorrect or erroneous or false. In these factual circumstances, there would be no question of imposing penalty u/s. 271(1)(c) of the Act. A mere claim made in the return of income which is not acceptable by itself, will not amount to furnishing of inaccurate particulars or concealment of income. In this view .....

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r The Appellant : Smt. Tasneem Varawala For The Respondent : Shri Vivek Ojha ORDER PER JASON P. BOAZ, A.M: This appeal by the assessee is directed against the order of the CIT(Appeals)-6, Mumbai dated 22/11/2011 confirming the levy of penalty of ₹ 1,18,573/- under section 271(1)(c) of the Income Tax Act, 1961 (in short the Act ) for assessment year 2007-08. 2. The facts of the case, briefly, are as under:- 2.1 The assessee, a company engaged in the business of design and supply of lighting .....

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kok. In this regard the assessee furnished explanations on the foreign trips undertaken alongwith details of air travel and amounts expended for boarding and lodging. The explanations furnished by the assessee were rejected by the Assessing Officer. As the assessee was not able to furnish evidences with regard to an amount of ₹ 2,71,400/- spent on boarding and lodging and the Assessing Officer was of the view that the assessee had failed to prove that the expenditure claimed was incurred w .....

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ore both the CIT(A)-6 and subsequently before the Tribunal. Both the assessee s appeals were dismissed by orders dated 06/04/2010 of the Ld. CIT(A) and by the Tribunal s order in ITA No.5734/Mum/2010 dated 18/05/2012. 2.2 In the meanwhile, the Assessing Officer took up penalty proceedings under section 271(1)(c) of the Act in respect of the disallowance of foreign travel expenses amounting to ₹ 3,52,271/- for assessment year 2007-08. After considering the explanation put forth by the asses .....

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mounting to ₹ 2,71,400/- from Kanji Forex P. Ltd. And (ii) that the assessee failed to establish that the expenditure incurred on foreign travel was for the purposes of the assessee s business. 3.1 Aggrieved by the order of the CIT(A)-6, Mumbai confirming the levy of penalty of ₹ 1,18,573/- u/s.271(1)(c) of the Act vide order dated 22/11/2011 for assessment year 2007-08, the assessee has raised the following grounds:- On the facts and in the circumstances of the case, the Ld. Commiss .....

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itted that in the course of assessment proceedings, the assessee furnished the detailed explanation and breakup of the foreign business trips undertaken by the two Directors Shri Satish Kapoor and Shri Saroj Shroff alongwith details of air tickets, dates of travel; business meetings held with different parties etc. It was submitted that the fact that the aforesaid expenditure was incurred on foreign travel was never doubted, even by the Addl. CIT, Range 2(3), who on the application u/s. 144A of .....

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the entire expenditure of ₹ 3,52,271/- including ₹ 76,571/- spent on air tickets and Visa charges. 3.2.2. According to the Ld. Representative for the assessee, similar expenses on foreign travel were incurred by the assessee year on year and the fact that these were incurred for business purposes was never doubted. It is submitted that in immediately preceding assessment year 2005-06, disallowance of the same was made only to the extent where documentary evidences to support expendit .....

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ssee s profit and loss account accompanying the return of income for assessment year 2007-08. In this regard it is contended that a mere making of a claim that is not sustainable in law, by itself, would not amount to concealment of income or furnishing of inaccurate particulars and, therefore, would not justify the levy of penalty under section 271(1)(c) of the Act. In support of the assessee s averments that the penalty levied u/s. 271(1)(c) of the Act is not sustainable, the Ld. Representativ .....

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ns and perused and carefully considered the material on record. The facts that emanate from the record are that the assessee company is engaged in the business of design and supply of lighting products. In the year under consideration it incurred foreign travel expenditure of ₹ 3,52,271/-. On examination thereof it was found that the foreign trips were undertaken by two Directors of the assessee company i.e. Shri Satish Kapoor and Shri Saroj Shroff to Bangkok; one from 11/10/2006 to 15/10/ .....

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thorities below have never doubted that the said expenditure claimed on foreign travel was not incurred. The case of the Assessing Officer was that since the assessee failed to produce evidence to establish that the foreign travel expenditure claimed was incurred wholly and exclusively for the purpose of the assessee s business; the same were not allowable. 3.4.3 Admittedly, the details and explanations in respect of the foreign travel incurred were duly furnished by the assessee and the expendi .....

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ts accompanying its return of income for assessment year 2006-07. In these circumstances it is neither the case of the Assessing Officer that the details furnished by the assessee were inaccurate, erroneous or false nor that the explanations and details furnished by the assessee was not bonafide or that all facts relating to the same and the computation of its income were not disclosed by it. The details furnished by the assessee pertaining to the issue of foreign travel expenses in its accounts .....

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