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TMI Blog2016 (3) TMI 866X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground raised in the appeal of the assessee is with regard to confirmation of penalty levied under section 271(1)(c) of the Act. 2. Brief facts of the case are that the assessee is an Individual and Director of M/s. Clement Ventures Pvt. Ltd. engaged in the business providing consultancy. The assessee filed his income declaring total income of Rs..41,21,450/-. The return filed by the assessee was processed under section 143(1) of the act and subsequently selected for scrutiny. The Assessing Officer completed the assessment order under section 143(3) of the act on 11.12.2009 determining the income at Rs..94,80,777/-. During the scrutiny, the Assessing Officer has found that the expenditure claimed by the assessee under various heads viz., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 5. Per contra, by supporting the orders of authorities below, the ld. DR by relying on the decision in the case of ACIT v. Harvey Heart Hospitals Ltd. [2013] 32 taxmann.com 348 (Chennai) and Sanghvi Swiss Refills (P.) Ltd. v. ACIT [2012] 28 taxmann.com 208 (Bom.), prayed that the orders of authorities should be confirmed. 6. We have heard both sides, perused the materials on record and gone through the orders of authorities below. The assessee, being Director of M/s. Clement Ventures Pvt. Ltd., stated to have been received consultancy charges of Rs..94,39,777/-. Against the above receipts, the assessee claimed expenditure under various heads to the tune of Rs..65,92,205/-. However, the assessee has not produced any evidence during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment would not automatically entitle the Revenue to impose penalty in view of the ratio laid down by the Hon'ble Supreme Court in the case of Madhusudhanan K.P. vs. CIT(2001) 251 ITR 99 (SC). The law says that assessments and penalty proceedings are different and that penalty does not become exigible, merely because the addition had become final, is well settled as per the judgement in the case of CIT vs. Mata Prasad (2005) 278 ITR 354 (All.). 8. Mere claiming deduction per se would not invite penalty in view of the legal preposition laid down by the Hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts (P) Ltd. [2010] 322 ITR 158. Without incurring any expenditure, no business income would have earned by the assessee and in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowing 80% of the claim, the Assessing Officer has allowed 20% of expenditure attributable to earn the business income. 11. Further, the case law relied on by the ld. DR in the case of Sanghvi Swiss Refills (P) Ltd. (supra) has no application to the facts of the present case, because in that case, there was search operation and during the course of search, several incriminating documents, loose papers, etc. were seized. To buy peace, the assessee offered Rs..25 lakhs as additional income. Moreover, the assessee has filed inaccurate particulars with regard to the amount of Rs. 10.81 lakhs paid by the assessee to its sister concern M/s. Primco Private Limited as service charges (reimbursement of salary and wages), inter alia, on verifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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