TMI Blog2016 (3) TMI 866X X X X Extracts X X X X X X X X Extracts X X X X ..... AHABAD High Court). In the instant case, the penalty order passed by the Assessingus we are of the opinion that levy of penalty is not warranted in the present case and accordingly, we delete the penalty levied by the Assessing Officer Officer is purely based on the assessment made under section 143(3) of the Act. Thus incurring expenditures during the course of business by the assessee was not rejected by the Assessing Officer, but the assessee could not file any valid evidence for claiming the expenditure before the Assessing Officer and therefore by disallowing 80% of the claim, the Assessing Officer has allowed 20% of expenditure attributable to earn the business income. Thus we are of the opinion that levy of penalty is not warran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses, travelling and conveyance, staff welfare, miscellaneous expenses, etc. are not supported by any proper evidences and estimated 20% of such expenditure as allowable expenditure. The Assessing Officer also made disallowance of depreciation @ 20% as attributable to personal use of car and interest on car loan. Thereby, the Assessing Officer made a total disallowance of ₹.52,73,764/-. Since the assessee has not produced any proper evidence in support of the expenditure claimed by him, the Assessing Officer has opined that the assessee has concealed the taxable income by furnishing inaccurate particulars of income. Accordingly, the Assessing Officer has initiated penalty proceedings and levied penalty of ₹.16,00,000/- under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment proceedings and therefore, the Assessing Officer, by allowing 20% of the said expenditure, disallowed 80% of the expenditure which comes to ₹.52,73,764/-. The Assessing Officer also disallowed depreciation @ 20% as attributable to personal use of car and interest on car loan and thereby the Assessing Officer enhanced the assessed income to ₹.94,80,777/-. Against the additions made by the Assessing Officer, the assessee has not preferred any appeal before the appellate authority. Since the assessee failed to furnish the supporting evidence for the expenditure stated to have been incurred and claimed in the return, the Assessing Officer was of the opinion that the assessee, by furnishing inaccurate particulars, suppressed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of this the Assessing Officer has not out-rightly rejected the books of accounts, but, allowed 20% of expenditure claimed by the assessee. 9. Other than particulars furnished by the assessee in the return of income, the Revenue does not have any other material to substantiate that the assessee has concealed the particulars. It is established law that not all additions would justify penalty as a matter of course. But addition is the basis for penalty. Mere admission does not justify penalty even in the light of the Explanation to section 271(1)(c) of the Act in view of the judgement in the case of CIT vs. Saran Khandsari Sugar Works (2000) 246 ITR 216 (All.). In the instant case, the penalty order passed by the Assessing Officer is pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia, on verification of income tax records reveal that M/s. Primco Private Limited has filed a Nil income. Against the particulars filed by the assessee, which, was clearly proved by the Department as false, penalty was exigible and the Hon ble High Court confirmed the imposition of penalty. In the instant case, the assessee could not file concrete evidence for his claim of expenditure, but it was not ruled out that there was no expenditure would have been incurred by the assessee during the course of his business, and therefore, the Assessing Officer allowed 20% of expenditure claimed by the assessee. 12. In view of the above facts and circumstances of the case and decisions relied on, we are of the opinion that levy of penalty is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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